America doesn’t have to start at Square 1 to fight Medicare fraud

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Last month, the Centers for Medicare and Medicaid Services announced a six-month moratorium on new Medicare enrollment for new home health and hospice agencies, its latest move to combat fraud in federal health programs. The government is right to focus on fraud, waste and abuse. But its oversight efforts should be targeted, data-driven and aligned with demonstrated risk.

The good news is that policymakers don’t have to guess where to focus. The federal government’s own data offer a useful starting point, and agency-based home care provides a transparent model worth studying.

More than three-quarters of improper payments in Medicaid are attributable to documentation deficiencies — missing or incomplete records — rather than intentional fraud. This is a meaningful distinction: The first is a compliance and education problem. The other is an enforcement problem. Treating them identically produces regulatory approaches poorly matched to both.

The data also show that risk isn’t uniformly distributed across provider types. Improper payment rates and fraud concentrations are highest in settings with complex billing structures, high per-beneficiary costs, and limited real-time oversight.

Home- and community-based services, including agency-based home care, involve comparatively lower per-beneficiary expenditures and simpler billing arrangements. In fact, the home care agency model offers a highly accountable and auditable care delivery structure.

When a home care agency employs caregivers as W-2 workers, rather than independent contractors, it creates payroll records, tax documentation and wage reporting that can be independently audited. The agency is responsible for hiring, training, scheduling and supervising those caregivers. Care plans are developed and monitored. Visit notes are maintained. Billing records can be cross-referenced against authorized service hours and documented care delivery.

Layered on top of this is electronic visit verification, required under the 21st Century Cures Act. This captures who delivered care, when, where and for how long. It’s among the most direct and effective fraud-prevention tools in the Medicaid program because it creates an immediate, verifiable record of service delivery that cannot be fabricated after the fact.

Altogether, these features produce a transparent and auditable framework that serves the administration’s program integrity goals. Policymakers should build on the accountability infrastructure already embedded within the agency-based home care model. In many states, the home care industry has also supported licensure frameworks that establish clear standards, strengthen consumer protections, and reinforce provider accountability.

Several targeted approaches would strengthen program integrity while preserving the access that Americans depend on, building directly on existing tools.

The most immediate opportunity is enforcement of the electronic verification. Seven states haven’t yet fully implemented electronic verification in home care delivery. Before creating new oversight requirements, Medicare and Medicaid should ensure that this existing, proven tool is operating everywhere it’s required. Promoting improved consistency and interoperability across state platforms would further strengthen oversight capabilities without imposing new requirements on compliant providers.

Another priority is improved data sharing between federal and state agencies. Many home care providers participate in multiple programs simultaneously, including Medicaid fee-for-service, Medicaid managed care, and Veterans Affairs community care programs. Better alignment of data across these systems would allow anomalies to surface more readily, and reduce the duplicative audits that now burden providers without producing equivalent oversight benefits.

Additionally, Medicare and Medicaid should use existing claims data to focus program integrity resources on genuine outliers: agencies whose billing patterns, utilization rates, or geographic footprint fall outside established norms.

Finally, proactive provider education on documentation standards would address improper payments more effectively than enforcement after the fact. Clear, accessible guidance reduces documentation errors at the source.

The home care industry believes program integrity scrutiny should be proportionate to risk, grounded in the government’s own evidence, and targeted at the settings and operators where fraud concentrates.

The Centers for Medicare and Medicaid Services has described its goal as shifting from “pay-and-chase” enforcement to real-time detection and prevention. Fortunately, the agency-based home care model is already built for exactly that approach. The tools and data exist. What is needed now is the commitment to use them, rather than reaching for blunt instruments that penalize compliant providers and new market entrants who’ve done nothing wrong.

The data point the way. The infrastructure is in place. The opportunity now exists to build on existing accountability systems and focus enforcement resources where the evidence shows the greatest risk exists.

Jason R. Lee is CEO of the Home Care Association of America, the nation’s leading trade association representing 5,000 home care agencies across all 50 states.

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home health care

Medicaid Fraud

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