What we're reading. What it means for your agency.
CMS rule changes, OASIS-E2 transition issues, OIG enforcement, EVV state updates,
and Carelytic product news — translated into operational implications for home health
agency leadership.
On August 4, the DOJ Fraud Division charged 19 defendants in Philadelphia for Medicaid home health aide schemes — including billing more than 24 hours a day on 1,100 separate occasions — and expanded the Northeast Health Care Fraud Strike Force to Pennsylvania.
On August 4, the DOJ Fraud Division charged 19 defendants in Philadelphia for Medicaid home health aide billing fraud — one aide claimed to serve seven clients simultaneously and billed over 24 hours a day on 1,100 occasions, totaling 64,000 hours that could not physically exist. The action also expanded the Northeast Health Care Fraud Strike Force to Pennsylvania, adding permanent investigative infrastructure to a region now explicitly flagged for Medicaid home care enforcement.
On July 21, CMS deferred $646 million in California IHSS and $199 million in Minnesota Medicaid home-based services under 42 CFR §430.40(b) — a pre-payment hold that requires no criminal finding and is not limited to two states.
On July 21, HHS and CMS deferred $867.5 million in California Medicaid payments — $646 million of it specifically from the in-home supportive services program — and $199 million in Minnesota home care payments. The stated goal: 'stop fraud before the check clears,' using 42 CFR §430.40(b), a pre-payment deferral authority that applies in every state and requires no prior criminal finding.
CMS-1844-P proposes making all Medicare revocations retroactive to the date of noncompliance — an estimated $82M/year clawback expansion — plus a new ground to pull enrollment for agencies in dense markets. Comment deadline: August 31.
The CY2027 Home Health PPS proposed rule (CMS-1844-P) got most of its press for the 2.4% payment update. The enrollment provisions are the harder operational story: CMS proposes retroactive clawbacks for all revocation grounds (currently only some), a new 'geographic density' revocation ground, and a misdemeanor-conviction basis for pulling enrollment tied to any owner or managing employee. Comment deadline: August 31.
After MedPAC's 7% cut recommendation and CY2026's 1.3% reduction, the CY2027 proposed rule goes the other direction — $420M aggregate increase, 20 LUPA threshold moves, continuing −3% PDGM recoupment. Comment window closes August 31.
CMS published the CY2027 Home Health PPS proposed rule (CMS-1844-P) on July 1 — a net 2.4% aggregate increase (~$420M) compared to CY2026. The −3.0% temporary PDGM recoupment continues for a third year; no new permanent adjustment is proposed. LUPA thresholds change on 20 case-mix groups. Comment period closes August 31, 2026.
DOJ's June 23 action — 455 defendants, $6.5B in alleged false claims, 1,079 CMS provider suspensions — uses a Data Fusion Center combining claims data with financial transactions. Billing anomalies are now caught by data systems before they reach an auditor.
On June 23, the Justice Department announced the 2026 National Health Care Fraud Takedown: 455 defendants charged, $6.5 billion in alleged false claims, all 50 state Medicaid Fraud Control Units participating — the largest Medicaid enforcement action in Takedown history. Home health is explicitly named as a high-risk sector. CMS simultaneously suspended 1,079 providers and revoked billing privileges for 1,403 others. Ohio, using new data analytics tools, had already suspended 49 home health providers on June 4.
CMS-2454-IFC sets an 80-hours/month community engagement requirement for Medicaid expansion adults starting January 1, 2027. Most home health patients are untouched. State plan personal care patients may not be. Comment deadline: July 31.
CMS published the Medicaid Community Engagement Requirement interim final rule (CMS-2454-IFC) on June 1, setting a January 1, 2027 deadline for 43 states to implement 80-hours-per-month work requirements for Medicaid expansion adults. Most Medicare home health patients are unaffected — but agencies with Medicaid personal care lines face patient census risk. The 'medically frail' exemption is narrower than most expected, and the comment window closes July 31.
DHS is reviewing April–June 2026 data right now — agencies below 50% face notices in July, below 80% face notices in October. Your Q2 window closes in 16 days.
On July 1, Minnesota DHS raises the EVV compliance bar from 50% to 80% for all Medicaid-funded home health and personal care visits. DHS is currently reviewing April–June 2026 data — corrective-action notices for below-50% agencies arrive in July, and below-80% notices follow in October. Agencies have 16 days before the Q2 window closes.
Ruby Scott, owner of Delta Home Health Care LLC in Farmington Hills, was convicted on five health care fraud counts and four Anti-Kickback counts — mapping both the referral-payment and physician-certification failures CMS says its intensified investigation program is built to find.
On May 14, a federal jury convicted Michigan HHA owner Ruby Scott for paying a Detroit hospital discharge nurse $100 per referral — $130,000 total via CashApp, PayPal, check, and cash — then fabricating physician certifications using real doctors who had never met the patients. With 450 DOJ health fraud actions since April 1, the case maps exactly what CMS says its intensified investigations are designed to find in enrolled agencies.
North Home Health Care and South Home Health Care billed $3.8M to Minnesota Medicaid — including for patients who were hospitalized or deceased. The DOJ Fraud Division has taken 450 enforcement actions since April 1 and expanded its Midwest Strike Force to Minnesota the same week.
On May 21, the DOJ charged 15 defendants in a $90M Minnesota Medicaid fraud takedown. Two entities named 'home health care' billed the Medicaid Housing Stabilization Services program for patients who were hospitalized or dead. The Midwest Strike Force expanded to Minnesota the same week — and 15 new Medicaid fraud prosecutors are being hired nationally.
A 6-month nationwide moratorium blocks initial HHA Medicare enrollment and certain ownership changes. The accompanying enforcement package adds pre-claim review in FL, IL, OK, OH, NC, and TX — affecting existing agencies starting now.
CMS imposed a 6-month nationwide moratorium on new Medicare home health enrollment effective May 13, 2026, citing significant fraud risk under 42 CFR § 424.570. The package also expands pre- and post-claim review to six states and adds fingerprint-based background checks for HHA enrollment screening — changes that affect agencies already enrolled.
MedPAC's March 2026 report cited 2024 FFS margins of 21.2% to justify a $1–2B annual reduction. CMS publishes the CY2027 proposed rule around June or July — agencies that haven't modeled the scenario are planning on the wrong floor.
MedPAC's March 2026 Report to Congress recommends a 7% Medicare home health payment cut for CY2027, citing 2024 FFS margins of 21.2%. CMS's CY2027 proposed rule will follow in roughly six weeks. Agencies that haven't run the 7% scenario against their case mix are building 2027 budgets on the wrong baseline.
Under 42 CFR 405.371, a 'credible allegation of fraud' is enough for CMS to halt Medicare payments immediately. The April 2026 LA enforcement wave shows how fast that cash-flow stop can arrive.
In April 2026, a White House–led interagency task force triggered Medicare payment suspensions for 23 home health agencies and 447 hospices in the Los Angeles area — an estimated $600 million in alleged fraud — with no criminal charges required. The mechanism: 42 CFR 405.371, the credible-allegation-of-fraud suspension authority. Funds stop flowing the day the letter arrives.
After May 11, every Medicare 270 eligibility request without an active HETS attestation gets rejected. Here's what your intake team needs to do in the next week.
CMS confirmed in its January urgent notification that the HETS Trading Partner attestation requirement is a hard cutover on May 11, 2026. No transition period. No retries. Agencies that haven't filed an attestation for every NPI lose real-time Medicare eligibility on day one.
The November 2025 final rule landed softer than the proposed 6.4% cut — but PDGM weights are recalibrated and 43 case-mix groups have new LUPA thresholds. Your visit-utilization plan from CY2025 doesn't carry forward.
CMS finalized a net 1.3% payment cut for CY2026 (~$220M down from the proposed 6.4%). The bigger operational story is buried in the recalibration: case-mix weights move using CY2024 data, and LUPA thresholds shift on 43 of the 432 case-mix groups.
Three of five HHCAHPS measures dropped. OASIS measure weight bumped to 40% with three new measures. And Medicare Spending Per Beneficiary–Post Acute Care joins the TPS as a claims-based measure. Your performance-year work just changed shape.
The expanded HHVBP model rewrote the Total Performance Score for CY2026. OASIS measures now carry 40% of TPS (with three new items). Three HHCAHPS measures dropped. And MSPB-PAC introduces accountability for downstream Medicare spending through 90 days post-treatment.
After a federal audit found ~13% of MA denials should have been approved per Medicare rules, CMS tightened response timelines and reclassified mid-care decisions as appealable organization determinations. Your authorization team has new ammo.
Medicare Advantage prior-auth must now respond within 72 hours for urgent and 7 days for standard requests. Mid-care MA decisions are now formally classified as 'organization determinations' — meaning they're directly appealable through the Medicare appeals process.
The January 2026 Kaiser Permanente settlement, $556M for Medicare Advantage risk-adjustment upcoding, makes one thing explicit: the OIG considers AI tools that 'nudge clinicians toward higher-margin codes' a fraud risk vector. Here's what that means for any HHA using AI coding assistance.
Kaiser Permanente's $556M settlement on January 14 didn't just resolve a False Claims Act case — it cemented Amedisys ($150M, 2024) as part of a pattern. The DOJ-HHS 2026 Working Group has now formally listed AI-assisted coding as a fraud enforcement priority.
BAYADA paid $17 million to resolve DOJ allegations that purchasing two agencies from an Arizona retirement-home operator constituted illegal remuneration for referrals. Mid-market agencies considering tuck-in acquisitions need fair-market-value opinions on every deal.
The DOJ's $17M BAYADA settlement uses a kickback theory that should change how any HHA structures acquisition deals: overpaying for an agency owned by a referral source can itself constitute a kickback, regardless of how the deal is documented.
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