Farisa Khan

Associate Editor

Loyola University Chicago School of Law, JD 2024

Home health agencies (HHAs) provide health care services to assist individuals with a disability, or who are ill, injured, or elderly. It is a cost-effective and convenient method of receiving quality care that is provided from the comfort of the patient’s own home. While HHAs have been around for years, primarily to serve the elderly and avoid hospitalization, the post-pandemic “at-home” era has made it the fastest-growing healthcare industry in the country. However, the high demands and good intentions of instilling home health agencies come with its adverse counterpart- fraud and abuse.

Types of fraud in home health

The most common type of fraud in the home health space is the improper billing for services or visits. The fraud can be as small as a provider visiting a patient three times in a single week but billing for four. In other instances, the agencies bill for a service they never provided, known as upcoding. In 2015, the Centers for Medicare and Medicaid Service (CMS) estimated that more than half of the reimbursements they paid to home health agencies across the country that year were fraudulent or improper. These upcoding schemes are backed by other frauds occurring simultaneously– kickback and forgery. To sign off on unadministered services and visits, HHAs will either forge the signature of the physicians or provide kickbacks in the form of cash or trips to physicians in return for signing off. While these are the most common forms of fraudulent activity, there is an endless list that takes place in HHAs.

Home health care fraud and abuse case studies

In 2021, an Illinois woman was sentenced to 56 months in prison with $6.3 million restitution for operating a home health care company that fraudulently billed Medicare for care that about 90% of the patients did not qualify for. Similarly, in 2020, ten defendants were arrested for billing Medicaid for services they did not render. The fraud scheme was so expansive that it even included patients were willing to play along in return for some money.

Physicians and nurses are also part of these schemes. In 2015, Dr. Arthur Davida was convicted for falsely certifying visits and services for patients that did not need them. Although he did not intentionally aim to defraud the government, he contributed to fraud and improper disbursement of healthcare dollars. In 2022, a home health nurse pleaded guilty for billing over $1.2 million in fake skilled nursing visits. She was also charged with conspiracy to pay and receive kickbacks. More cases can be found through databases created by CMS, DOJ and other organizations combatting home health care fraud.

Why are HHAs susceptible to fraud?

The largest problem leaving HHAs vulnerable to fraud is a lack of government oversight and requirements. In Illinois, the licensing fee to acquire an HHA is $25 with no criminal background check required. Additionally, government licensure inspections only take place once every three years. Medicare’s lack of resources and trust in healthcare providers means that they do not verify the accuracy of the services before making payment. These vulnerabilities are enforced by providers that are motivated by money. For example,, nurses lie about their patients’ conditions to make them seem sicker and require routine checkups; agencies falsely document the work the providers are doing, and the same patients are discharged and then re-admitted. Some fraudulent occurrences happen due to untrained staff and lack of oversight, such as billing for visits that are automatically scheduled without checking if the visits were actually made. The culmination of these lax regulations contributes to the increase in fraud in HHAs.

Fighting home health fraud and abuse

 Currently, a common method of identifying fraud in HHAs is through whistleblowers. As a reward, they receive up to 25% of the payment owed back to the government. There are many federal and state laws in place to prohibit employers from retaliating against their employees that report fraudulent practices.

Physicians play the largest role in countering fraud in home health care spaces. Without their sign-off, upcoding schemes cannot be carried out. Moreover, if physicians refused to accept kickbacks, it would be more difficult to carry out fraudulent activity. However, that is easier said than done. Stricter regulations will need to be enforced, including frequent inspection, conduction criminal background checks, and making the process to obtain a home health care license harder and more selective. Perhaps an incentive process can be put in place for physicians similar to that given to whistleblowers. Until a more effective method can be implemented, the most we can do is tighten regulation, educate physicians, and hold providers accountable more effectively.