OIG Exposes Antipsychotic Drug Misuse in Nursing Homes

WASHINGTON, D.C. — The U.S. Department of Health and Human Services Office of Inspector General released two damning reports on March 19, 2026, accusing nursing homes across the country of systematically misusing antipsychotic medications as chemical restraints and fraudulently assigning schizophrenia diagnoses to residents to conceal that drug use and artificially inflate their quality ratings on the federal Care Compare website.

The investigation, which examined focused CMS inspections of 40 nursing facilities nationwide between 2018 and 2021, paints a disturbing picture of an industry-wide pattern in which powerful psychiatric medications are administered to dementia patients not for therapeutic purposes but to make residents easier to manage, according to the OIG reports (OEI-02-23-00200 and OEI-02-23-00201).

Residents Sedated for Harmless Behaviors

Among the most troubling findings, as reported by The Daily Record, were specific cases in which vulnerable residents were drugged for exhibiting entirely non-threatening behaviors. At a Pennsylvania facility, staff administered antipsychotics to a woman over 100 years old simply because she enjoyed caring for baby dolls. In Virginia, a male resident was sedated because he preferred to stay in bed rather than sit in a wheelchair, while a female resident at another Virginia facility was medicated after becoming upset when staff failed to respond promptly to her call light.

Federal regulations require that nursing homes attempt non-pharmacological interventions before resorting to antipsychotic medications, and most antipsychotics lack FDA approval for use in dementia patients due to significantly elevated risks of falls, strokes, and death, according to the OIG findings. The reports indicate that in many cases, facilities made no effort to explore alternative approaches before turning to medication.

The practice of using antipsychotics as chemical restraints is compounded by what the OIG describes as a deliberate scheme to hide the extent of the problem. According to the reports, nursing homes have been systematically adding false schizophrenia diagnoses to residents' records. Because CMS quality measures exclude patients with schizophrenia from antipsychotic use calculations, these fabricated diagnoses allow facilities to appear compliant with federal standards while continuing to sedate residents.

A Longstanding Pattern of Abuse

The new OIG findings echo earlier investigations that documented the same troubling practices, as reported by STAT News reporter Tara Bannow. A similar OIG report in 2022 and a 2020 Congressional investigation both identified the pattern of antipsychotic misuse and diagnostic manipulation, suggesting that years of warnings have failed to produce meaningful change.

Data from the Center for Medicare Advocacy underscores the scope of the problem. According to the organization's analysis, approximately 249,135 residents — representing 23 percent of all long-stay nursing home residents — had Medicare Part D claims for antipsychotic medications in 2018. Of those, more than 12,000 were not reported in the Minimum Data Set assessments that CMS uses to track drug use. Among the roughly 98,000 residents listed as having schizophrenia, more than 29,000 — approximately 30 percent — showed no evidence of a legitimate schizophrenia diagnosis in their Medicare claims history. Of those 29,000 residents, 71 percent had active antipsychotic prescriptions, according to the Center for Medicare Advocacy.

A 2017 study found that schizophrenia diagnoses in nursing homes nearly doubled after CMS launched its National Partnership to Improve Dementia Care in 2012, with California's schizophrenia diagnosis rate climbing from 9 percent in 2011 to 18 percent — a pattern consistent with gaming the quality metric rather than reflecting genuine clinical trends, according to the Center for Medicare Advocacy.

Industry Response

The reports have drawn sharply divided reactions from industry stakeholders. LeadingAge Vice President Jodi Eyigor called the documented practices "inexcusable," according to Skilled Nursing News. The John A. Hartford Foundation's president, Rani Snyder, urged improvements in staffing levels and dementia care training as essential steps toward reducing reliance on chemical restraints, as reported by Skilled Nursing News.

Holly Harmon, Senior Vice President at the American Health Care Association and National Center for Assisted Living, defended the role of shared clinical decision-making in prescribing antipsychotics, according to Skilled Nursing News.

The American Society of Consultant Pharmacists issued a statement on March 20, 2026, supporting CMS quality measure reform in response to the OIG findings. ASCP noted that the current antipsychotic quality measure is 14 years old and urged CMS to adopt updated measures that account for documented clinical rationale, efficacy, and safety, according to a statement published by PharmiWeb. The organization also called on Quality Improvement Organizations to expand targeted educational programs for pharmacists, medical directors, and care teams.

Recommended Enforcement Actions

The OIG has called on CMS to take several concrete enforcement steps, including imposing stronger civil monetary penalties against facilities that misuse antipsychotic medications, referring prescribing clinicians to state licensing boards for potential disciplinary action, accelerating escalation to serious sanctions such as denying Medicare payment for new admissions at offending facilities, and posting OIG findings publicly on the Care Compare website so families can make informed decisions, according to McKnight's Long-Term Care News.

CMS Inspection History

The OIG's findings raise broader questions about the reliability of the CMS star rating system that millions of families depend on when choosing a nursing home. When facilities can artificially inflate their quality scores by adding false psychiatric diagnoses to residents' medical records, the entire rating framework is compromised. The 40 facilities examined in this investigation were already designated as Special Focus Facilities — homes with histories of serious quality issues that receive enhanced oversight. According to the OIG reports, even this heightened scrutiny failed to prevent the misuse of antipsychotic medications and the manipulation of diagnostic records. The gap between reported antipsychotic use rates and actual prescription data documented by the Center for Medicare Advocacy suggests the problem extends well beyond the 40 facilities the OIG examined.

Ownership & Operations

The OIG reports did not single out specific ownership groups or chains, but the breadth of the investigation — spanning facilities in multiple states including Pennsylvania and Virginia — suggests the practices cut across different ownership structures. The involvement of 40 facilities in the sample and the systemic nature of the diagnostic manipulation documented by the OIG indicate that the problem is not limited to isolated bad actors but reflects broader industry incentives tied to the CMS quality reporting system.

Resources for Families

Families who suspect a loved one may be receiving unnecessary antipsychotic medications or who have concerns about the quality of care at a nursing facility should contact their state's Long-Term Care Ombudsman program. The National Long-Term Care Ombudsman Resource Center can be reached at 1-800-677-1116 or online at [ltcombudsman.org](https://ltcombudsman.org).

Residents and family members have the right to request a full accounting of all medications being administered, including the clinical justification for each prescription. Federal law requires that antipsychotic medications be used only when clinically indicated and that facilities document attempts at non-pharmacological interventions first. Families can also file complaints directly with their state survey agency or with CMS through the Care Compare website. Reviewing a facility's inspection history on Care Compare, while imperfect as the OIG reports demonstrate, remains an important step in evaluating a nursing home's track record.