With the recent rise in medical services provided outside of a doctor’s office, there has been a surge of FCA enforcement actions against home health agencies (HHAs). HHAs are public or private agencies or organizations that are primarily engaged in providing skilled nursing services and other therapeutic services to patients in their residence. The last several years have seen an increase in the provision of these services, with 11,869 Medicare certified HHAs and more than five million beneficiaries served in the United States in 2018. This increase may be the result of the growth of the United States’ elderly population, as older persons are projected to outnumber children for the first time in US history by 2030. Thus, along with the rise in the elderly population and home healthcare comes increased oversight of HHAs.
OIG Pushes for More Oversight and Funding
OIG recently addressed the rapid growth in HHAs by issuing a report discussing, in part, the specific issues arising out of HHAs and seeking additional funding to investigate HHA cases. In late July 2019, the OIG released a report entitled “Solutions to Reduce Fraud, Waste, and Abuse in HHS Programs: OIG’s Top Recommendations.” Within the report, the OIG made several recommendations relating to home health and hospice services, including implementation of the statutory mandate requiring surety bonds for HHAs that enroll in Medicare. According to the report, the implementation of surety bonds for HHAs would have led to the recovery of at least $39 million in uncollected overpayments between 2007 and 2011. Additionally, with respect to hospice providers, the OIG recommended that the Centers for Medicare and Medicaid Services seek statutory authority to establish additional remedies in order to address poor performance.
Further, in March 2019, the OIG sought an additional $10 million in its 2020 budget in order to deal with fraud in home- and community-based services. The OIG specifically requested funding in order to expand capabilities to surveil home health, hospice, personal care and other home-based services, and reserved at least $4.5 million of the budget for “boots on the ground” in order to open more investigations. The budget request notes that the increased funding is necessary in order to combat what OIG sees as growing fraud in the home health industry, estimating that in 2017 there were $808 million in improper payments to home health providers. The 2020 budget request seeks three times more funding than last year, with a budget increase of only $3 million sought between 2018 and 2019, and serves as an acknowledgment by the OIG that HHAs will be under increased scrutiny.
According to the OIG, between 2013 and 2017, HHA investigations resulted in more than 450 criminal and civil actions and generated $1.3 billion in expected receivables. The OIG additionally estimates that Medicare paid $3.2 billion in improper reimbursements for home health services in 2018. Further, the OIG noted that in 2016 it identified more than 500 HHAs and 4,500 physicians with suspicious practices potentially giving rise to FCA actions.
Given the trends already seen in 2019, it appears that HHA enforcement actions have meaningfully increased. Since the beginning of 2019, there have been at least 22 DOJ announcements concerning HHAs involving almost $200 million in alleged fraud total. Individuals involved in these cases have been sentenced to a total of more than 1,000 months in prison (with sentences ranging from 24 to 188 months) and approximately $74 million in restitution. On January 28, 2019, alone, DOJ announced five separate HHA actions amounting to more than $21 million in fraud.
In addition to increased HHA oversight and investigations, DOJ also appears determined to impose longer sentences and higher monetary restitution than in prior years. In one of the toughest sentences of 2019 thus far, the former director of nursing and administration of two Houston home health companies was sentenced to 10 years in prison and a restitution order of more than $20 million based on allegedly false certifications and falsified patient records. Further, the director allegedly paid patient recruiters to locate Medicare beneficiaries and paid doctors to certify false plans of care. This sentence represents a trend in harsher sentencing, with more than half of the prison terms given in 2019 exceeding five years and several restitution awards exceeding $8 million. 
Recruiters and Hospice Care
In addition to concentrating on HHAs, DOJ also appears to have increased its focus on recruiters and hospice providers. Since the beginning of 2019, at least eight patient recruiters have been convicted or pleaded guilty to fraud schemes involving HHAs. Often these recruiters are charged in conjunction with home health company owners and administrators for both the payment and receipt of kickbacks. In these matters, recruiters are often alleged to have referred patients for home health who are not eligible under Medicare, do not need home health services, or were never actually provided services. In May 2019, DOJ announced the sentencing of a Houston recruiter to 188 months in prison and a restitution payment of $12.9 million in connection with a $20 million scheme in which the recruiter paid kickbacks and bribes to both physicians and patients in exchange for the paperwork necessary for five separate HHAs to bill Medicare. This sentence represents the largest recruiting-related sentence and the longest prison term awarded relating to HHA actions thus far this year.
Finally, although hospice providers are not always considered HHAs, there is often an intersection between the two, with the OIG frequently discussing home health and hospice together because of the similar nature of the services provided and the nature of the alleged fraud. With the recent surge in HHA prosecutions and investigations, there has been a similar increase in hospice-related FCA actions.
Since 2018, DOJ has settled several large FCA cases relating to hospice care, including the prominent example of Chemed Corporation, the owner of the largest for-profit hospice services company in the United States. Chemed, Vitas Hospice Services and Vitas Healthcare settled with DOJ in 2017 for $75 million arising out of allegations that the company knowingly submitted hospice claims for patients who were not terminally ill. With the increased scrutiny of HHAs, hospice providers should likewise expect more oversight and investigations in the years ahead.
Nonetheless, hospice providers can take some solace based on the recent dismissal of FCA claims against HCR ManorCare, Inc., and its subsidiaries. On June 26, 2019, the Northern District of Ohio dismissed the FCA claims brought by a former consultant turned relator who alleged that the defendant billed for patients that did not qualify for hospice care and failed to return overpayments. The Northern District dismissed the case with prejudice on the basis that the Rule 9(b) pleading requirements had not been met and the relator failed to plead her claims with particularity.
PRACTICE NOTE: Moving forward, providers practicing in the home health and hospice industry should expect to see more oversight activity, and should stay abreast of compliance issues relating to patient eligibility, use of recruiters, and submission of claims to Medicare and other government programs.
 See Centers for Medicare & Medicaid Services, Home Health Providers (July 25, 2019), https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/CertificationandComplianc/HHAs.html.
 See Centers for Medicare & Medicaid Services, Home Health Quality Reporting Program (June 6, 2019), https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/index.html (stating that “5,125,575 beneficiaries were served through 7,228,721 episodes of care.”).
 Tracy L. Mitzner et al., Older Adults’ Needs for Home Health Care and the Potential for Human Factors Interventions, Proc. of the Hum. Factors & Ergonomics Soc’y Ann. Meeting, 718-722 (Oct. 1, 2009), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4270052/.
 See US Census Bureau, Older People Projected to Outnumber Children for First Time in U.S. History (Mar. 13, 2018), https://www.census.gov/newsroom/press-releases/2018/cb18-41-population-projections.html.
 See US Dep’t of Health & Human Servs. Office of Inspector General, Solutions to Reduce Fraud, Waste, and Abuse in HHS Programs: OIG’s Top Recommendations (July 2019), https://oig.hhs.gov/reports-and-publications/compendium/files/compendium2019.pdf.
 Dep’t of Health & Human Servs. Office of the Inspector General, Justification of Estimates for Appropriations Committees Fiscal Year 2020 (2019), at 40-41, https://oig.hhs.gov/reports-and-publications/archives/budget/files/2020budget.pdf.
 US Dept. of Health & Human Servs. Office of Inspector General, Solutions to Reduce Fraud, Waste, and Abuse in HHS Programs: OIG’s Top Recommendations (July 2019), https://oig.hhs.gov/reports-and-publications/compendium/files/compendium2019.pdf).
 See US Dep’t of Health & Human Servs. Office of Inspector General, HHS OIG Data Brief: Nationwide Analysis of Common Characteristics in OIG Home Health Fraud Cases (June 2016), https://oig.hhs.gov/oei/reports/oei-05-16-00031.pdf.
 See, e.g., Press Release, US Dep’t of Justice, Co-Owners of Chicago-Area Home Health Agency Plead Guilty to Kickbacks Conspiracy Charges (May 31, 2019), https://www.justice.gov/opa/pr/co-owners-chicago-area-home-health-agency-plead-guilty-kickbacks-conspiracy-charges; and Press Release, US Dep’t of Justice, United States Files False Claims Act Complaint Against Home Health Agency and Two of Its Owners (May 24, 2019), https://www.justice.gov/opa/pr/united-states-files-false-claims-act-complaint-against-home-health-agency-and-two-its-owners; and Press Release, US Dep’t of Justice, Michigan Doctor Pleads Guilty to Role in $2.5 Million Medicare Fraud Scheme (May 20, 2019), https://www.justice.gov/opa/pr/michigan-doctor-pleads-guilty-role-25-mil….
 See id.
 See, e.g., Press Release, US Dep’t of Justice, California Doctor Sentenced to Prison for Role in Medicare Kickback Conspiracy (Jan. 28, 2019), https://www.justice.gov/opa/pr/california-doctor-sentenced-prison-role-medicare-kickback-conspiracy; Press Release, US Dep’t of Justice, Houston Medical Clinic Owner Convicted in $11 Million Medicare Fraud Scheme (Jan. 28, 2019), https://www.justice.gov/opa/pr/houston-medical-clinic-owner-convicted-11-million-medicare-fraud-scheme; Press Release, US Dep’t of Justice, Miami Woman Sentenced to More Than Three Years in Prison for Role in $1.36 Million Medicare Fraud Scheme (Jan. 28, 2019) https://www.justice.gov/opa/pr/miami-woman-sentenced-more-three-years-prison-role-136-million-medicare-fraud-scheme; Press Release, US Dep’t of Justice, Miami Woman Sentenced to Prison for Role in $4.66 Million Medicare Fraud Scheme (Jan. 28, 2019), https://www.justice.gov/opa/pr/miami-woman-sentenced-prison-role-466-million-medicare-fraud-scheme; Press Release, US Dep’t of Justice, Miami Woman Sentenced To Prison For Role In $750,000 Medicare Fraud Scheme (Jan. 28, 2019), https://www.justice.gov/opa/pr/miami-woman-sentenced-prison-role-750000-medicare-fraud-scheme.
 See Press Release, US Dep’t of Justice, Former Administrator of Two Houston Home Health Companies Sentenced to Prison in $20 Million Medicare Fraud Scheme (Apr. 4, 2019), https://www.justice.gov/opa/pr/former-administrator-two-houston-home-health-companies-sentenced-prison-20-million-medicare.
 See Press Release, US Dep’t of Justice, Houston Patient Recruiter Sentenced to 188 Months in Prison for Role in $20 Million Medicare Fraud Scheme(May 29, 2019), https://www.justice.gov/opa/pr/houston-patient-recruiter-sentenced-188-months-prison-role-20-million-medicare-fraud-scheme; Press Release, US Dep’t of Justice, Michigan Home Health Agency Owner Sentenced to Prison for $8.3 Million Medicare Fraud (Apr. 22, 2019), https://www.justice.gov/opa/pr/michigan-home-health-agency-owner-sentenced-prison-83-million-medicare-fraud; Press Release, US Dep’t of Justice, Florida Home Health Services Company Owner and Co-Conspirator Sentenced to Prison for Role in $8.6 Million Health Care Fraud Scheme (Feb. 27, 2019), https://www.justice.gov/opa/pr/florida-home-health-services-company-owner-and-co-conspirator-sentenced-prison-role-86.
 See, e.g., Press Release, US Dep’t of Justice, Patient Recruiter Found Guilty in $1.3 Million Medicare Kickback Scheme (Jul. 30, 2019), https://www.justice.gov/opa/pr/patient-recruiter-found-guilty-13-million-medicare-kickback-scheme.
 Press Release, US Dep’t of Justice, Houston Patient Recruiter Sentenced to 188 Months in Prison for Role in $20 Million Medicare Fraud Scheme (May 29, 2019), https://www.justice.gov/opa/pr/houston-patient-recruiter-sentenced-188-months-prison-role-20-million-medicare-fraud-scheme.
 See Press Release, US Dep’t of Justice, Chemed Corp. and Vitas Hospice Services Agree to Pay $75 Million to Resolve False Claims Act Allegations Relating to Billing for Ineligible Patients and Inflated Levels of Care (Oct. 30. 2017), https://www.justice.gov/opa/pr/chemed-corp-and-vitas-hospice-services-agree-pay-75-million-resolve-false-claims-act.
 See United States v. Heartland Hospice, Inc., No. 3:10-cv-1875, 2019 WL 2611077 (N.D. Ohio Jun. 26, 2019).