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AG investigates 12 home health agencies as home health costs rise

Marylou Sudders, secretary of the Executive Office of Health and Human Services. The Boston Globe/Globe Staff

State officials, hit with a surge in spending on home health care services, have asked Attorney General Maura Healey to investigate providers that they suspect of submitting fraudulent bills.

Governor Charlie Baker’s Executive Office of Health and Human Services referred a dozen agencies to the attorney general’s Medicaid Fraud Division after reviewing internal data and fielding consumer complaints that pointed to possible fraud. Officials did not name the agencies.

“Our office is taking a hard look at the home health industry and is investigating the companies referred to us by MassHealth,” Cyndi Roy Gonzalez, a spokeswoman for the attorney general, said in a statement. “Our focus is on rooting out the companies who are taking advantage of people at the taxpayers’ expense and ensuring that legitimate companies can continue to provide the necessary home supports people need.”


State officials did not detail what kind of wrongdoing they suspect, but Medicaid fraud includes activities such as billing for medical services that are never provided or are unnecessary.

The state’s costs for providing home health services have been soaring. MassHealth, the state Medicaid program that is funded by taxpayers and provides insurance to poor and low-income residents, is on track to spend more than $755 million on home health services in the fiscal year ending June 30. That would be an 82 percent increase from just two years earlier.

State officials said they are taking steps to control rising spending, such as requiring prior authorization before paying for home health services, which include nursing care, aides, and physical and occupational therapy. They are also auditing home health agencies and have temporarily stopped doing business with new providers.

Health and Human Secretary Marylou Sudders said the changes were made “to maintain the integrity of the MassHealth program [and] to manage skyrocketing spending in home health.”


More than 80 percent of the spending growth since 2013 has been driven by 62 companies that started doing business with the state during that time, according to state officials. Massachusetts works with 195 home health providers overall.

The state apparently isn’t waiting for Healey’s office to take action. Compassionate Homecare Inc. of Worcester filed a lawsuit on Jan. 22 alleging that MassHealth has been withholding more than $3.2 million in payments, putting the company in critical financial condition. MassHealth stopped making payments while alleging the company committed fraud, but it has not detailed the fraud allegations, according to the complaint.

James Fuccione, legislative and public affairs director for the Home Care Alliance of Massachusetts, said his organization, which represents home health care agencies, welcomes more oversight of companies that are new to the market and driving up costs.

But the alliance is concerned that other steps state officials are taking, such as requiring prior authorization for services, could be burdensome for home health companies and may prevent some patients from getting needed medical care.

“It’s going to be an extra cost on agencies,” Fuccione said. “We are concerned that with a rate of reimbursement that’s below the cost of care already, this is going to lead to access issues. Our nurses may not want to perform these services anymore if agencies can’t pay them enough.”

Al Norman, executive director of Mass Home Care, a network of nonprofit agencies that manage patient care, said the state should also investigate whether certain doctors are involved in fraud by “rubber-stamping” their approval of services that patients don’t need.


“If there is anyone who is gaming the system, we need to try to reduce and eliminate this kind of activity,” Norman said. “It’s wasting tax dollars to do that, and it’s not really helping [patients].”

Dr. Dennis M. Dimitri, president of the Massachusetts Medical Society, said he was unaware of any such incidents involving doctors. “I believe most physicians recognize that their first responsibility is to provide essential care for their patients and exercise prudent judgment in approving medically necessary patient care plans,” he said in a statement.

Home health care spending is a significant part of the MassHealth budget, which the governor’s state budget proposal puts at $15.4 billion next fiscal year. MassHealth represents the single biggest piece of state spending and covers nearly 1.9 million poor and low-income people.

Priyanka Dayal McCluskey
can be reached at priyanka.mccluskey@globe.com. Follow her on Twitter @priyanka_dayal.