How to Improve Home Health Agency Legal Compliance and Consequences for Breaching the Law


Rishi R. Khatri, Esq.


According to a 2014 investigative report submitted by the Health and Human Services Office of the Office of Inspector General (OIG)[1], it found a variety of compliance problem patterns for U.S. home health agencies. For instance, it found that that only 32% of home health claims submitted under the Medicare program and that required face-to-face encounters actually did not include the correct documentation. This represents $2 billion in home health services.  While this may sound striking, this type of issue and similar non-compliance are not uncommon in a variety of health systems. Other compliance issues identified in that report are:

The date of the encounter was not provided.

The date of the encounter was not within a required timeframe.

Failure to have the signature of the certifying physician.

The documentation lacked an appropriate title.

The date when the physician signed the document was not provided.

The OIG also determined that the narrative portion of many of the documents provided were not sufficient to support the claims submitted. That is, narratives did not meet guidance issued by the Centers for Medicare/Medicaid Services (CMS) or even specifically include phrases and language that CMS identified as inappropriate for the narratives.

Failure to Comply with Medicare and Medicaid Standards and Fraud

While mainly the consequences for failure to comply with Medicare and Medicaid standards or defrauding Centers of Medicaid/Medicare are fines, regulatory agencies also will indict owners under fraud charges.

For instance, on May 2014, the owner of a Union County, NJ-based in home health aide agency has been indicted on charges she billed Medicaid and the U.S. Department of Veterans Affairs more than $144,000 for services the company never performed. A 30-count indictment charges Laurie Provost with 24 counts of health care claims fraud and one count each of theft by deception, Medicaid fraud and forgery and two counts of falsifying or tampering with records from an alleged scam that spanned nearly two years

Another example of failure of compliance that has led to a company being fined was when Victoria Falls, an Andover, KS senior-living center, allegedly abused patients this year (2014). The Kansas Department for Aging and Disability Services has fined the agency $155,800 in response to allegations of patient abuse. As a result of the investigation, the Centers for Medicare and Medicaid Services imposed a penalty of $8,200 per day for each day from March 26 through April 13 and $1,000 per day after that until the facility is back in compliance.

In October 2012, the Medicare Fraud Strike Force arrested 91 individuals, including doctors, nurses, and other licensed medical professionals, for participating in a $429.2 million Medicare fraud in false billing, $230 million was for home health care fraud, $100 million in mental health care fraud, $49 million in ambulance fraud, and the rest of the money in other kinds of fraud.

How to Keep An Agency Compliant with the Law

Because home health agencies rely on physicians to complete the forms accurately and timely, and those agencies are held accountable if physicians fail to do so, strategies like creating standard forms and implementing specific check boxes to ensure the required information is conveyed would be very useful.

Moreover, there are preventative measures to keep a home health agency, and really any other health care businesses, compliant with the law. Namely, use compliance as a factor in performance appraisals, establish a compliance officer and committee, have regular compliance training and education, make sure the lines of communication for compliance complaints/reports are open, discipline non-compliance, and have regular auditing and compliance reports.

However, if usage of the aforementioned compliance ‘maintenance’ or non-compliance prevention still leads to violations, then immediate response and correction of any breach is necessary. The organization must launch an internal investigation to determine severity of a breach. Based on its findings, it will take decisive actions to correct any problems that it identifies. These steps may even include referral to criminal and/or civil enforcement authorities, a corrective actions plan, a report to a relevant government agency, and return of any overpayments.

The internal investigation typically begins with interviews with affected or involved individuals and reviews of documents. If the breach is severe, bringing in outside legal counsel, professional auditors, or healthcare experts to assist would be advisable.

Further Resources

"OIG Compliance Program, Guidance for Home Health Agencies,” Federal Registrar, Vol. 63, No.152, August 7, 1998

“Home Health Care Services,” Chapter 8, Report to the Congress: Medicare Payment Policy, MEDPAC, March 2012

National Association for Home Care & Hospice,