Six republican U.S. House of Representatives congressmen have penned a letter to the U.S. Department of Health & Human Services (HHS) Office of Inspector General (OIG) urging stronger oversight amid rising fraud concerns in California.
The letter was inked on Tuesday by Reps. Brett Guthrie (R-Ky.), Dr. John Joyce (R-Pa.), Morgan Griffith (R-Va.), Jason Smith (R-Mo.), David Schweikert (R-Ariz.) and Vern Buchanan (R-Fla.).
The lawmakers are members of the House Energy and Commerce and Ways and Means Committees. They requested in the letter a briefing with HHS OIG Inspector General T. March Bell to better understand the scope of hospice fraud escalating in Los Angeles County, California, along with the enforcement actions to address these program integrity issues.
“We write to express our concerns regarding evidence that strongly suggests large-scale Medicare fraud involving home health agencies (HHAs) and hospice agencies in Los Angeles County, California,” the congress members said in the letter. “The illegal actions by a few impact patient care and public trust across the entire sector. Fraudulent actors in the system not only waste scarce federal resources, but they also jeopardize patient care and tarnish the reputation of good actors. Most concerning, fraudsters often embroil seniors in their illegal schemes, leading to inappropriate or nonexistent care for patients who need it the most.”
Hospices and home health programs have become “prime target” areas for fraudulent operators, according to the legislators. Instances of fraud have cost taxpayers billions and have resulted in compromised quality care, they wrote in the letter.
California is among four states flagged as hospice fraud hotbeds in recent years, joined by Arizona, California and Texas. The U.S. Centers for Medicare & Medicaid Services (CMS) has also recently added Georgia and Ohio as areas seeing heightened instances of fraud, waste and abuse among newly licensed hospices.
Swaths of new operators have entered these states and received federal funds through illegitimate business practices. In one instance, 15 new hospices received Medicare certification, all operating from the same two-story building in Los Angeles, despite a moratorium on new licenses in the state.
Nearly one-third (31%) of the nation’s hospices were based in Los Angeles County, according to 2022 data from the California State Auditor’s report.
Continued oversight is crucial to ensure hospice program integrity, the congressional lawmakers stated.
Medicare fee-for-service hospice programs made an estimated $1.3 billion in improper payments during the 2023 report period, which included billing claims submitted from July 1, 2021 through June 30, 2022, according to data that CMS previously shared with Hospice News.
“We applaud the ongoing work being conducted by HHS-OIG in cracking down on the fraud that has occurred, and we look forward to addressing the larger-scale scheme that is draining public resources from Americans who need these services the most,” they said in the letter. “While it is unknown how much of the $1.2 billion in improper payments is fraud, CMS placed HHAs as an area of high risk for Medicare fraud.”
Hospices support increased oversight
The letter cited two Hospice News reports examining the impact and scope of fraud in the hospice space. One report highlighted how fraudulent operators have misspent millions in Medicare dollars in recent years. The other report examined hospices’ calls for increased accreditation organization oversight that could help curb fraudulent activity.
Precise data on the amount of hospice payments made to fraudulent operators is unavailable.
Audits and investigations conducted during Fiscal Year 2023 by HHS OIG recovered roughly $3.44 billion in misspent Medicare, Medicaid and other Health and Human Services funds. However, this total is not necessarily tied to instances of fraud, waste or abuse in the hospice space in particular. It also only includes dollars recovered rather than those spent.
The regulatory watchdog’s hospice-related enforcement actions in 2024 included roughly $143.81 million in alleged fraudulent activity. The suspected hospice fraud amount reported in 2023 came to an estimated $198.1 million.
Hospices and advocacy groups in California have applauded the House’s efforts to bring greater attention to program integrity concerns.
Examining the large scale of hospice and home health Medicare fraud occurring in Los Angeles County can help to illuminate the harmful impacts on patients, families and legitimate providers, according to Sheila Clark, CEO and president of the California Hospice and Palliative Care Association (CHAPCA).
CHAPCA called for strengthened regulatory oversight and enforcement, as well as improved enrollment and accreditation safeguards to ensure patient protection.
“When scammers exploit hospice and home health, patients and families are the ones who suffer,” Clark told Hospice News in an emailed statement. “CHAPCA strongly supports the work of Congress and CMS Administrator Dr. Mehmet Oz to aggressively root out fraud and take strong action to shut down scammers and protect families who rely on hospice and skilled home health.”
Greater enforcement action to address the scale and root causes of fraud occurring in Los Angeles County will be pivotal to setting the stage of oversight at national levels, said a spokesperson from the home health and hospice provider AccentCare.
Dallas-headquartered AccentCare is backed by the private equity firm Advent International. The company provides hospice, home health, palliative and personal care across 32 states and in the District of Columbia, including in Arizona, California and Texas.
Regulators need more accurate data and better processes to determine the actual instances of fraud occurring, according to the spokesperson. The rapid expansion of new operators accounts for a disproportionate share of providers nationwide, which can result in skewed payment data that adversely affects future reimbursement, AccentCare indicated.
“Strong oversight and enforcement are key to protecting patients, saving taxpayer dollars and maintaining access to quality care,” an AccentCare spokesperson told Hospice News in an emailed statement. “AccentCare appreciates the leadership of the House Energy and Commerce and Ways and Means Committees in addressing fraud that harms patients and legitimate providers. Decisions should be based on accurate data so that legitimate providers nationwide are not penalized for fraud committed by others.”