In December 2024, Attorney General of Pennsylvania Michelle Henry announced that a
suburban Philadelphia-based home care agency, its owner and 18 other people were charged in a scheme that allegedly defrauded the state Medicaid program out of millions of dollars.
The allegations were that over a three-year period, ComfortZone Home Health Care, LLC, received reimbursed Medicaid funds to provide Personal Assistance Services (PAS) to eligible recipients.
Medicaid defines PAS as care and support “provided to eligible beneficiaries to help them stay in their own homes and communities rather than live in institutional settings, such as nursing homes.” However, as alleged, the owner, Stephanie Mobley and her co-conspirators simply submitted claims to the state for services that were never provided, then lied and covered it up.
Home Health: Independence and Mobility
As the average life expectancy continues to increase, so too does the need for care for the elderly and disabled. Many do not want to, or cannot afford to, live in a nursing home or assisted living facility unless absolutely necessary. Home health is a throw-back to the old “house calls” that doctors made up until the middle part of the 20th century.
Home health is also important from a cost perspective, since home health services are generally a less expensive alternative to hospitalization or skilled nursing facilities.
Medicare will cover many services if a patient requires part-time or intermittent skilled nursing or is "homebound," that is, having “significant difficulty leaving [their] home” and can cover a range of issues, including mobility, medical condition, frailness or otherwise is inadvisable or difficult. For home health, the care comes to the patient in the place they are most comfortable.
Unfortunately, it can also be ripe for fraud. Fraudulent activity in home health often mirrors the schemes that take place in a hospital or clinical settings. One major issue is that there is often no one supervising the home health workers to ensure that the care is adequate, necessary and to standard—or if it ever occurs. In fact, the
2023 Fiscal Year Report for the state Medicaid Fraud Control Units showed that home health agencies were overwhelmingly the subjects of enforcement: 43 individuals were convicted of criminal charges, resulting in recoveries of more than $34.6 million and an additional 26 civil settlements totaling $15.6 million.
Recent Home Health Fraud Cases
In 2022,
Carter Healthcare LLC, an Oklahoma-based home health provider, and its affiliates, along with their top executives, agreed to pay $7.175 million to resolve False Claims Act allegations of Medicare fraud. According to the press release, the company allegedly billed the Medicare program knowingly and improperly for home health care to patients in Florida without regard to medical necessity and overbilled for therapy by upcoding patients’ diagnoses. The two men who controlled the company also agreed to a Corporate Integrity Agreement and a five-year exclusion from participating in federal health care programs.
Following an earlier mistrial,
a Massachusetts woman was convicted in July 2024 of health care fraud. From January 2013 to January 2017, the woman was a part owner and operator of Arbor Homecare Services LLC and conspired to use Arbor to defraud MassHealth of at least $100 million. She failed to train staff, billed for home health services that were never provided or were not medically necessary and services that were not authorized. The company, at the behest of the woman and her co-conspirators, paid kickbacks for patient referrals, entered sham employment relationships with patients’ family members to provide services that were not medically necessary and routinely billed for fictitious patient home visits.
A Virginia woman who owned a business to provide Medicaid-funded home health and mental health care services
pleaded guilty in August 2024 to one count of health care fraud and six counts of making false statements. The U.S. Attorney’s Office press release noted that she and her company “forged signatures of an [registered nurse] and fraudulently billed and received more than $50,000 from [the state]. Synergy billed and received from [the state] an additional $480,000 for patients for whom there was no documentation that any assessment had ever been done or while they were in the hospital or at other care settings.” Additionally, she inflated the time for billing for mental health services, making it appear that patients received more counseling than they actually had.
Bringing Them In: Patient Seekers
Another significant factor is the use of “patient marketers” or “beneficiary recruiters,” who seek potential home health participants to refer to providers.
Patricia Omorogbe, a Registered Nurse, and her husband owned several home health agencies in the Midwest. Between 2009 and 2018, the pair secretly paid bribes and kickbacks to patient marketers in exchange for referrals of Medicare beneficiaries to the companies. They used sham contracts and even engaged in an elaborate cash generation scheme to conceal payments to the marketers. The husband would write checks to himself and his employees, converting them to cash that was used to pay kickbacks.
Patricia Omorogbe also caused fraudulent claims to be submitted to Medicare for home health services, claiming to perform medical assessments of patients on dates when she was out of the country. She also admitted that her companies would routinely admit, discharge and re-certify certain patients as needing home health care, regardless of whether they actually needed it or not. Patricia and her husband pleaded guilty; she received two years in prison, and he received 18 months. They had to re-pay $6.7 million.
Following his indictment in 2015, a
Michigan home health care company owner fled to Canada and then flew to Pakistan, where he spent nearly eight years before returning to the U.S. to face the charges. Following his guilty plea, in November 2024, he received three years and five months in prison for a health care fraud conspiracy that resulted in almost $7.9 million in false and fraudulent claims for home health care services paid by Medicare. He and others offered kickbacks, bribes and inducements to beneficiary recruiters in exchange for Medicare beneficiary information. Using the patient’s information, they billed Medicare for services that either did not occur or were medically unnecessary.
Red Flags of Fraud in Home Health Care
Home health frauds represent significant challenges for auditors and CFEs. Identifying these schemes can be difficult, simply due to the lack of presence of an office or care facility other than the residence. Former Inspector General of the U.S. Department of Health and Human Services Richard P. Kusserow, notes that home health care schemes are easy to exploit and hard to prove; they manipulate an especially vulnerable population who may be scared to report wrongdoing or negligence. He writes that “lack of training standards, uneven oversight of services provided, and failure to implement prepayment controls to prevent improper or fraudulent payments” often contribute to the problems and challenges of this type of fraud. Kusserow also offers some indicators to look for in home health schemes.
Senior Medicare Patrol, a patient advocacy and fraud prevention organization supported by the Department of Health and Human Services, includes the following home health red flags:
- Enrolled in home health services by a doctor or other person the patient does not know.
- Offered things such as “free” groceries or a “free” ride from a home health agency in exchange for their Medicare number (or to switch to a different home health agency).
- Being charged a copayment or “fee” for home health services.
- Being asked to sign forms verifying that home health services were provided even though the patient did not receive any medical services.
- Offering cash or gifts in exchange for participating as a “caregiver” when none is needed.
Additionally, a federal prosecutor who has worked many of these cases gave a presentation that is worth reviewing if you encounter these types of cases; another briefing from the New York City Department of Human Resources Administration describes some of the issues and indicators found in recent inspector general audits of home health and personal care.
The federal government estimates that 69% of the population will need some form of caregiving, whether in assisted living or skilled nursing facilities, or at home. 65% will likely need home care for about two years, according to the study—that is a population that could be very appealing to fraudsters.
