Home Health Fraud: A never-ending law enforcement priority
Home Health Fraud Is a Top Federal Enforcement Priority in 2025 and 2026
The Department of Justice has made its priorities clear. Home health care fraud is at the center of the largest and most aggressive federal healthcare fraud enforcement effort in American history.
In June 2025, DOJ announced the results of its 2025 National Health Care Fraud Takedown. The operation resulted in criminal charges against 324 defendants across 50 federal districts. The intended losses exceeded $14.6 billion. That figure more than doubled the previous record of $6 billion set in 2020.
Home health agencies were among the most prominent targets. Looking ahead to 2026 and beyond, federal enforcement is poised to intensify further. DOJ has launched new data analytics capabilities, cross-agency task forces, and AI-powered detection systems designed to identify fraudulent billing patterns before claims are even paid.
For anyone involved in the home health industry, from agency owners and certifying physicians to billing staff and compliance officers, understanding the current enforcement landscape is essential.
What Is Home Health Fraud
Home health care is a Medicare and Medicaid benefit that provides skilled nursing services, physical therapy, occupational therapy, speech therapy, home health aide services, and medical social work to patients in their homes. It is designed to provide medical services to patients who are homebound. The benefit exists so that eligible patients can receive medically necessary care without being admitted to a hospital or skilled nursing facility. It is governed primarily by Sections 1814(a) and 1835(a) of the Social Security Act, along with the implementing regulations at 42 C.F.R. Part 409, Subpart E and 42 C.F.R. Part 484.
Home health fraud occurs when individuals or entities knowingly exploit this benefit to obtain payments from federal healthcare programs for services that were not rendered, were not medically necessary, or were procured through illegal means such as kickbacks and bribes. It is not limited to agency owners. Physicians who sign false certifications, nurses who fabricate visit records, patient recruiters who solicit beneficiaries for cash payments, and billing staff who knowingly and willfully submit false claims can all face criminal prosecution.
The federal government estimates that approximately 69 percent of the population will need some form of caregiving during their lives. This creates a large and growing pool of Medicare and Medicaid beneficiaries receiving home health services. It also creates a large and growing target for fraud. The combination of vulnerable patients, decentralized service delivery in private homes, and complex documentation requirements makes the home health sector uniquely susceptible to abuse. Federal investigators and prosecutors have recognized this vulnerability. Home health fraud is now one of the most heavily prosecuted categories of healthcare fraud in the United States.
The Federal Statutes That Drive Home Health Fraud Prosecutions
Home health fraud investigations typically involve several overlapping federal statutes. Each carries significant criminal and civil penalties.
Key Documents in a Home Health Fraud Case
Every home health fraud investigation centers on a specific set of documents. These records form the evidentiary backbone of both the government's case and the provider's defense. Federal investigators scrutinize each of these documents for signs of falsification, inconsistency, and fabrication.
The Plan of Care (CMS Form 485)
The Plan of Care, commonly referred to as the Plan 485, is the foundational document for any episode of home health services. Under 42 C.F.R. § 409.43, a physician or allowed practitioner must establish and periodically review a plan of care for each patient receiving home health services. The 485 identifies the patient's diagnoses, the types of services ordered, the frequency and duration of visits, the patient's functional limitations, and the medications prescribed. Any false information in a 485 will be scrutinized and focused on by law enforcement.
The 485 must be signed by the certifying physician. It is a condition of payment. If the Plan of Care does not support the services billed, every claim submitted during that episode is potentially a false claim. Federal investigators routinely compare the contents of the 485 to the underlying clinical documentation for any falsified information. When the 485 reflects a level of acuity or a set of services that the visit notes do not support, investigators treat the discrepancy as evidence of fraud.
The Physician Certification and Face-to-Face Encounter
Under 42 C.F.R. § 424.22, a physician or allowed practitioner must certify that the patient meets each eligibility requirement for the Medicare home health benefit. The certification must confirm that the patient is confined to the home (homebound), requires skilled nursing or therapy services on an intermittent basis, is under the care of a physician who has established a plan of care, and has had a face-to-face encounter with a physician or allowed practitioner.
The face-to-face encounter must occur within 90 days before or 30 days after the start of the home health episode. The certifying physician must document that the encounter was related to the patient's primary reason for needing home health services and must explain why the clinical findings support that the patient is homebound and in need of skilled care.
This requirement is a frequent point of failure in fraud investigations. When physicians sign certifications without conducting genuine evaluations, or when they certify patients as homebound based solely on paperwork prepared by the home health agency rather than independent clinical assessment, the certification becomes a false statement for purposes of healthcare fraud under Section 1347 and false statements under Section 1035. Agencies that pay physicians for certifications on a per-patient or volume-based compensation structure risk creating kickback liability on top of false certification charges.
The OASIS Assessment
The Outcome and Assessment Information Set, known as OASIS, is the standardized patient assessment instrument required by CMS for all Medicare home health patients. Under 42 C.F.R. § 484.55, the home health agency must complete a comprehensive OASIS assessment at the time of admission, at each recertification (every 60 days), upon any significant change in the patient's condition, at transfer, and at discharge.
The OASIS assessment collects detailed data on the patient's clinical status, functional abilities, and service needs. It includes specific items that measure the patient's ability to perform activities of daily living such as bathing, dressing, toileting, transferring, and ambulation. It captures the patient's cognitive function, pain levels, wound status, medication management capacity, and risk for hospitalization.
The OASIS data directly determines Medicare reimbursement. CMS uses OASIS responses to calculate the patient's case-mix weight under the Home Health Prospective Payment System. Higher acuity scores produce higher reimbursement. This financial incentive creates a direct motivation to inflate OASIS responses, and federal investigators know it.
In U.S. ex rel. Wagner v. Care Plus Home Health Care, Inc., a federal court held that allegations of falsified OASIS data and medical records were sufficient to state a claim under the False Claims Act, even where broader allegations about serving ineligible patients did not meet pleading standards on their own.
Federal enforcement actions have specifically targeted registered nurses and licensed medical professionals for falsifying OASIS information and causing false claims to federal programs. Investigators compare OASIS functional scores against visit notes, therapy documentation, and patient interviews. When an OASIS assessment reports that a patient cannot ambulate without assistance but a visit note from the same week describes the patient walking independently, the inconsistency becomes evidence of intentional manipulation.
Skilled Nursing Visit Notes and Therapy Documentation
Each home health visit must be documented in a clinical note. Skilled nursing visit notes record the patient's vital signs, clinical observations, interventions performed, patient response to treatment, and any changes in condition. Therapy notes document the specific treatments provided, the patient's functional progress, and the continued medical necessity for therapy services.
These notes are the ground-level evidence in any fraud case. They are what investigators use to determine whether visits actually occurred, whether the services described were actually provided, and whether the patient's condition justified the level of care billed. Visit notes that are identical across multiple patients, that contain copy-and-paste language with no patient-specific detail, or that reflect visits on dates when GPS data or other records show the clinician was elsewhere are hallmarks of fraud. Investigators refer to these as "cookie cutter" notes, and they are damaging evidence against a medical professional.
Federal investigators also use visit notes to assess whether services were medically necessary. If a nurse's notes consistently document a stable patient with no skilled nursing needs, but the agency continues to bill for skilled nursing visits, the documentation itself becomes the government's evidence that the services were unnecessary.
How Investigators Detect Document Falsification
Federal agents use several methods to identify fabricated or falsified home health documentation. They conduct patient interviews to compare what the patient experienced against what the records reflect. They review electronic metadata to determine when documents were created or modified and by whom. They analyze GPS and cell phone location data to verify whether clinicians were physically present at the patient's home on the dates reflected in the visit notes. They compare documentation across patients to identify templated or recycled language that suggests fabrication. They cross-reference OASIS functional scores with physician office notes, hospital records, and therapy progress notes to identify inconsistencies.
The DOJ's Health Care Fraud Data Fusion Center amplifies these techniques with algorithmic analysis. Agencies with statistically improbable billing patterns, such as unusually high therapy utilization or a disproportionate number of patients scoring at the highest acuity levels on OASIS assessments, are flagged for investigation before any whistleblower complaint is filed.
The Homebound Requirement: Definition, Application, and Grey Areas
The homebound requirement is one of the most consequential and contested elements of home health eligibility. It is also one of the most common grounds for fraud allegations, coverage denials, and federal investigations.
The Statutory and Regulatory Definition
To qualify for Medicare home health services, a patient must be certified as "confined to the home." The definition is set forth in Sections 1814(a) and 1835(a) of the Social Security Act and further explained in the Medicare Benefit Policy Manual, Chapter 7, Section 30.1.1.
The regulatory framework establishes a two-criteria test. The patient must satisfy at least one condition under Criteria One and must also satisfy both conditions under Criteria Two.
| Criteria | Requirement |
|---|---|
| Criteria One | Because of illness or injury, the patient must need the aid of supportive devices (crutches, canes, wheelchairs, walkers), require the use of special transportation, or require the assistance of another person in order to leave the home. Alternatively, the patient must have a condition such that leaving the home is medically contraindicated. |
| Criteria Two | There must exist a normal inability to leave home. Leaving home must require a considerable and taxing effort. |
The definition explicitly states that a patient does not have to be bedridden to be considered homebound. A patient may leave home for medical treatment, including dialysis, chemotherapy, radiation therapy, and attendance at licensed adult day care programs, without losing homebound status. Absences for religious services are also permitted. Other absences are allowed if they are infrequent or of relatively short duration. CMS guidance identifies occasional trips to the barber, a walk around the block, or attendance at a family reunion, funeral, or graduation as examples of permissible absences.
Where the Grey Area Exists
Despite the two-criteria framework, the homebound definition contains significant areas of subjective clinical judgment. This is where both legitimate disputes and fraud allegations arise.
The phrase "considerable and taxing effort" is inherently subjective. What constitutes a taxing effort for one patient may not for another. A patient recovering from hip replacement surgery may find it exhausting to walk to a car but may still be physically capable of doing so with a walker. A patient with advanced COPD may be able to leave the home on a good day but become severely short of breath on most days. A patient with dementia may be physically mobile but cognitively unable to safely navigate outside the home. Each of these patients may legitimately qualify as homebound, but each presents a judgment call that a federal investigator or auditor could second-guess.
The "infrequent absences" standard adds another layer of ambiguity. CMS guidance directs that homebound status should be evaluated over a period of time rather than on any single day. A patient who leaves the home more often during a short period when visiting relatives are available to assist may still be homebound when viewed across the full episode of care. But if an investigator reviews only a narrow window of activity, those absences may appear to contradict homebound status.
There is also a tension between clinical reality and documentation. A patient may genuinely meet the homebound criteria, but if the clinician documenting the OASIS assessment and visit notes does not clearly articulate the specific reasons the patient is homebound, the record may not support the certification. Inadequate documentation of homebound status is one of the most common findings in Medicare audits of home health claims. It does not always mean fraud. But it does mean denied claims, overpayment demands, and potential referral to law enforcement.
Homebound Status in Fraud Investigations
In fraud cases, the government often alleges that patients were enrolled in home health services despite not being homebound. Investigators interview patients and neighbors. They review social media accounts for evidence of regular outside activity. They obtain surveillance footage. They examine pharmacy pickup records, grocery store loyalty card data, and church attendance records.
When the evidence shows that a patient was regularly leaving the home without difficulty during the same period that the home health agency was certifying the patient as homebound, the certifying physician and the agency face potential liability under both the False Claims Act and the healthcare fraud statute. The fact that some of those absences might fall within the "infrequent and short duration" exception under CMS guidance does not necessarily protect against prosecution. Federal prosecutors may argue that the overall pattern of activity is inconsistent with the statutory definition.
Thorough, contemporaneous, patient-specific documentation of the clinical basis for homebound status is the single most important protective measure available to home health providers.
Common Home Health Fraud Schemes Under Federal Investigation
Federal prosecutors and investigators have identified several recurring fraud patterns in the home health sector.
Billing for Services Never Rendered
The most straightforward scheme involves submitting claims for home health visits that never occurred. Some agencies fabricate entire patient visit records. Others bill for skilled nursing visits when only aide-level services were provided, or when no one visited the patient at all. In a recent Massachusetts prosecution, a home health agency operator was sentenced to 12 years in federal prison for a scheme that defrauded MassHealth of over $100 million through fabricated billing records.
Patient Recruitment and Kickback Schemes
Federal investigators have consistently targeted kickback arrangements between home health agencies and patient recruiters. These schemes typically involve recruiters who approach Medicare beneficiaries at community centers, churches, and health fairs. The recruiters collect beneficiary information and sell it to home health agencies in exchange for per-patient payments. Every such payment is a potential violation of the Anti-Kickback Statute.
In a March 2025 Massachusetts indictment, a clinical laboratory, two home health agencies, and a physician were charged in a mutual kickback scheme involving over $7.8 million in false claims. The physician allegedly authorized home health services without ever seeing or treating the patients.
Physician Certification Fraud
Medicare requires a physician to certify that a patient is homebound and in need of skilled nursing or therapy services. Some physicians sign certifications without performing required face-to-face evaluations. Others accept payments tied to the volume of certifications they sign. Both practices expose the physician and the agency to criminal liability, especially under Section 1035.
Unnecessary Services and Upcoding
Some agencies admit patients who do not meet the criteria for home health services. Others extend episodes of care well beyond medical necessity. Still others upcode the severity of patient diagnoses to justify higher reimbursement rates. The Association of Certified Fraud Examiners has reported that home health agencies routinely admit, discharge, and re-certify patients regardless of actual medical need.
Use of Sham Employment Relationships
A growing area of concern involves agencies that create sham employment relationships with patients' family members. Family members are placed on the agency's payroll as home health aides. The agency then bills Medicare or Medicaid for services that the family would have provided anyway, or for services that are never actually delivered.
The DOJ's New Enforcement Infrastructure
The 2025 Takedown was not a one-time event. It signaled a structural shift in how the federal government detects and prosecutes healthcare fraud.
The Health Care Fraud Data Fusion Center
In connection with the 2025 Takedown, DOJ announced the creation of a Health Care Fraud Data Fusion Center. This multi-agency operation combines data specialists from DOJ's Health Care Fraud Unit, HHS-OIG, the FBI, and other federal agencies. The Fusion Center leverages cloud computing, artificial intelligence, and advanced analytics to detect anomalous billing patterns in real time.
The Fusion Center implements Executive Order 14243, which directs federal agencies to eliminate information silos in the detection of waste, fraud, and abuse.
Operation Gold Rush
The power of these analytics tools was demonstrated by Operation Gold Rush, a component of the 2025 Takedown. The DOJ's Data Analytics Team detected anomalous billing that exposed a transnational criminal organization using straw owners to purchase dozens of medical supply companies. The organization submitted $10.6 billion in fraudulent claims to Medicare. Proactive analytics prevented Medicare from paying all but approximately $41 million of the $4.45 billion scheduled for payment.
The DOJ-HHS False Claims Act Working Group
In July 2025, DOJ and HHS relaunched a joint False Claims Act Working Group focused on streamlining civil healthcare fraud enforcement. The Working Group targets kickback arrangements, durable medical equipment fraud, manipulation of electronic health records, and barriers to patient access. DOJ has indicated it intends to initiate more FCA cases on its own rather than relying solely on whistleblower complaints.
What to Expect in 2026 and Beyond
Multiple enforcement trends point to sustained and expanding federal attention on the home health sector.
| Trend | What It Means |
|---|---|
| AI-Powered Pre-Payment Review | CMS is implementing systems designed to flag and block fraudulent claims before payment is made. Home health agencies with irregular billing patterns will face faster scrutiny. |
| Dual-Track Civil and Criminal Enforcement | The 2025 Takedown included civil charges against 20 defendants and civil settlements with 106 defendants. This combined approach is expected to become standard. |
| EHR-Driven Billing Scrutiny | Federal enforcers are increasingly focused on whether electronic health record systems contain automated prompts or defaults that drive claims for unnecessary services. |
| Expanded Strike Force Operations | In September 2025, DOJ expanded its Health Care Fraud Strike Force into the District of Massachusetts, joining existing operations across the country. |
| State Medicaid Fraud Control Units | Twelve State Attorneys General participated in the 2025 Takedown. State-level investigations are expected to increase as federal priorities filter down to state enforcement agencies. |
What to Do if You Receive a Subpoena, CID, or Agent Contact
Frequently Asked Questions
Facing a Federal Home Health Fraud Investigation?
As a former Assistant Chief at DOJ's Fraud Section and founding partner at Armstrong & Bradylyons PLLC, Scott Armstrong defends healthcare executives and physicians around the country in cases involving healthcare fraud and violations of the anti-kickback statutes, including home-health investigations and cases. Attorneys at Armstrong & Bradylyons PLLC have over 25 years of combined DOJ experience and participated in 25 federal jury trials, including 17 in healthcare fraud cases involving over $2.8 billion in alleged false claims.
