Last month, Dr. Mehmet Oz, Administrator of the Centers for Medicare & Medicaid Services (CMS), accompanied by other CMS officials, visited with home health and hospice providers and related industry associations to discuss ways to strengthen program integrity enforcement. CMS was reacting to calls from industry stakeholders and members of Congress to get a handle on fraud in the home health and hospice industries.
Oz reportedly inquired about kickback arrangements in the industry and discussed with stakeholders ways that CMS can better target fraudulent practices without burdening high-quality nonprofit providers. In addition, late last year, the Medicare Payment Advisory Commission (MedPAC) recommended a 7% cut to home health reimbursement rates and identified “program integrity concerns” in the home health industry, especially within Los Angeles County, which is viewed as a hot spot for fraud.1
The problem in Los Angeles specifically, which according to MedPAC accounted for 8.7% of total Medicare fee for service home health spending in 2024 while comprising only 2.2% of fee for service enrollment, has also prompted concern in Congress. In a letter dated January 9, addressed to the Inspector General of the U.S. Department of Health & Human Services, six Republican House members raised the alarm about home health fraud and urged stronger oversight. The letter, signed by Representatives Brett Guthrie, Jason Smith, John Joyce, M.D., David Schweikert, H. Morgan Griffith and Vern Buchanan, expressed the representatives’ concerns “regarding evidence that strongly suggests large-scale Medicare fraud involving home health agencies (HHAs) and hospice agencies in Los Angeles County, California.” While focused primarily on Los Angeles, the letter also referred more broadly to home health and hospice agencies as “prime targets for fraud.” The letter asserted that “[f]raudulent actors in the system not only waste scarce federal resources, but they also jeopardize patient care and tarnish the reputation of good actors” and that “[m]ost concerning, fraudsters often embroil seniors in their illegal schemes, leading to inappropriate or nonexistent care for patients who need it the most.”
The upshot of all this is that home health providers everywhere, not just in Los Angeles County, should expect increased regulatory scrutiny from the federal government. Providers would be well-served in reviewing their billing protocols and third-party arrangements to ensure that their business operations do not draw unwanted attention from the Feds. Compliance counsel can assist in this effort while ensuring that the entire review process is protected under attorney-client privilege.
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