Medicare home Health Under Siege: Fraud in California Threatens Access to Care for Seniors Nationwide
For millions of Americans, the Medicare Home Health Benefit represents a lifeline – a pathway to recovering safely in the comfort of their own homes, avoiding costly hospital readmissions and nursing home placements. But this vital program is facing a crisis, not from inherent flaws in its design, but from rampant fraud concentrated in specific regions, and a flawed payment system that punishes honest providers and jeopardizes access to care for vulnerable seniors across the country. As a representative of upstate New York, I’ve witnessed firsthand the devastating consequences of this systemic issue, and I’m calling for immediate and decisive action from the Centers for Medicare & Medicaid Services (CMS).
The Problem: Fraudulent Billing Distorts National Reimbursement Rates
The current Medicare reimbursement model for home health services relies heavily on national data. This seemingly objective approach has a critical flaw: itS easily manipulated by bad actors. Inflated billing practices in certain areas, particularly within Los Angeles County, are driving down reimbursement rates nationwide. This means that law-abiding home health agencies operating in states with reasonable costs, like upstate New York, are being forced to operate on razor-thin margins, or even at a loss, simply because of fraudulent activity elsewhere.
This isn’t a theoretical problem. The situation is actively dismantling the home health infrastructure in areas that need it most.Agencies are closing, caregivers are leaving the field, and, most tragically, seniors are being denied the skilled care they require to remain safely at home.
A Hub of Fraud: Los Angeles County and Organized Schemes
The scale of the fraud is staggering. Parts of Los Angeles County, previously represented by current Health and Human Services Secretary Xavier Becerra, have become a notorious hub for Medicare fraud. investigations by the Department of Justice, HHS, and even Immigration and Customs Enforcement (ICE) have uncovered complex schemes involving shell companies, “ghost patients” (individuals billed for services they never received), and complex international money-laundering operations.
The data paints a disturbing picture. One physician, connected to hundreds of home health agencies, billed Medicare nearly $600 million between 2021 and 2024, with $210 million coming in 2024 alone. An remarkable 95% of these payments were concentrated in Los angeles County. Furthermore, this physician’s Medicare patient count tripled in just three years, yet the agencies involved reported no revenue from Medicare Advantage plans – a clear indication of proactive patient recruitment for billing purposes, rather than legitimate post-hospital care.
The brazenness of these operations is shocking. Entire city blocks are now populated with hundreds of “paper” agencies, registered to the same addresses, often utilizing free email accounts like Gmail and Yahoo in official filings. One address in Van Nuys currently hosts over 500 home health agencies and 200 hospices, many of which have been flagged by law enforcement for months.These are blatant red flags that should have been identified and addressed by federal regulators long ago. Rather, they were seemingly ignored, allowing organized networks to siphon hundreds of millions of taxpayer dollars.
The Consequences: Eroding Access to Care and Increasing Costs
CMS is currently planning further cuts to home health payments. A proposed 6.4% reduction in 2026, on top of nearly 9% in cuts already implemented since 2023, will be devastating, particularly for small and rural agencies. These cuts will effectively force many agencies to close their doors, further restricting access to care.
The consequences are already being felt. Since 2020, two million fewer Medicare beneficiaries are receiving home health services. Nationally, nearly one in four home health agencies have closed. In my district, home health utilization has plummeted by 39%, leaving nearly 26,000 seniors unable to access the care prescribed by their doctors. Alarmingly, nearly half of all patients referred for home health services last year were unable to receive them.
This lack of access isn’t just inconvenient; it’s dangerous. CMS’s own data demonstrates that patients denied home health care are 36% more likely to be readmitted to the hospital, 16% more likely to require emergency room visits, and a staggering 43% more likely to die.
A Moral Imperative: Protecting Seniors and Taxpayers
The seniors and veterans in my district, and across the nation, have spent their lives contributing to Medicare, trusting that it will be there for them when they need it most. Every fraudulent claim paid is a direct theft from them,and from future generations who will rely on the program’s solvency.
Immediate Action is Required
CMS has the authority – and the duty – to act now. I recently sent a letter to CMS urging them to take the following steps:
