COVID-19 Funding Presents an ‘Enforcement Perfect Storm’ for Home Health Providers, Others

The federal government saw $2.2 billion in civil fraud recoveries in 2020. Roughly 82% of those settlements and judgments — about $1.8 billion — were from matters related to the health care sector.

That’s according to a recent report from Nashville, Tennessee-based law firm Bass, Berry & Sims. The report examined significant health care fraud developments in 2020, including those related to the home health industry.

Overall, the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) announced 166 criminal and 414 civil actions against individuals and entities involved in health care fraud-related offenses in 2020, according to the report.


During this time period, there were several regulatory developments.

Perhaps most relevant to home health providers were changes to the Stark Law from the Centers for Medicare & Medicaid Services (CMS). Formally known as the Physician Self-Referral Law, the Stark Law was originally meant to prevent physicians from profiting from directing their patients to certain business partners.

Last year saw a handful of noteworthy home health cases and settlements, according to Bass, Berry & Sims.


In November, the former owners of a home-based care provider based in Florida agreed to pay $5.8 million to resolve allegations that the agency paid kickbacks for fraudulent medical directorships, as well as bonuses to family members of referring physicians. The settlement — not an admission of guilt by the company — is tied to allegations from 2009 to 2011.

In May, a physician agreed to pay $450,000 to resolve allegations that — in exchange for certifying patients for services without any knowledge of the patients’ conditions — he received kickbacks from a home health company.

In relation to the False Claims Act — the federal government’s primary civil enforcement tool against entities that defraud federal health care programs — Act for Health Inc. allegedly hired home health workers who were not properly licensed.

This year is also starting out with aggressive fraud-related actions from government watchdogs against home health professionals.

On Monday, two Boston-based women were arrested and indicted on charges in connection to a $100 million home health money laundering scheme.

On Wednesday, a Harlingen, Texas-based home health CEO was sentenced to 15 years in prison because of his involvement in the submission of over $150 million in fraudulent bills and the payment of unlawful kickbacks.

As home health providers continue to navigate the public health emergency, they should also be prepared for the federal government to turn its attention to the billions of dollars that were distributed as part of COVID-19 relief efforts.

In March, Congress passed the $2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act.

In December, Congress supplemented the initial funding with the Consolidated Appropriations Act. This included an additional $900 billion for COVID-19 relief, including another $3 billion allocated to the Provider Relief Fund.

The government will likely ramp up COVID-19 funding fraud efforts in 2021.

“COVID-19 funding presents an enforcement perfect storm; namely, the provision of fast cash in significant amounts to a highly regulated industry, along with poor and evolving government guidance, and assured retrospective scrutiny by the government,” Bass, Berry & Sims noted in the report. “Government scrutiny likely will parallel the enforcement efforts that followed stimulus funding in response to the 2008 financial crisis.”

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