Collins Introduces Bill to Prevent Medicare Fraud in Home Health Billing

Home health billing companies and revenue cycle leaders in home health settings are navigating a rapidly tightening enforcement environment in 2026 – one shaped by a nationwide CMS enrollment moratorium, over $70 million in suspended payments, and now a new Senate bill that would give federal regulators significantly expanded authority over agency enrollment, oversight, and fraud prevention.

Medicare fraud is an ongoing challenge in home health care and the Medicare Home Health Payment Integrity and Protection Act of 2026, proposed by Senator Susan Collins, represents one of the most substantive congressional responses to that challenge in recent years [1]. We’ve put together an overview of the bill for revenue cycle leaders in home health settings, including comments and reactions from industry leaders.  

CMS launched a six-month, nationwide moratorium on new Medicare enrollment for home health agencies (HHAs) and hospices effective May 13, 2026, citing systemic fraud patterns in both categories as the basis for the temporary halt [2]. The moratorium covers all new enrollment applications and certain ownership change requests. This is a deliberate response to the documented pattern of bad actors transferring operational control to evade detection. Providers should know that current enrollments remain unaffected so they can continue billing and delivering services normally.

CMS Administrator Dr. Mehmet Oz stated: “We've seen systemic and deeply troubling fraud in the hospice and home health space, with bad actors exploiting some of our most vulnerable Medicare patients and stealing money from the American taxpayer. Today we're shutting the door on fraud – preventing new bad actors from entering Medicare while we aggressively identify, investigate, and remove those already exploiting them.”

The moratorium builds on earlier enforcement activity. CMS suspended payments to approximately 800 hospices and HHAs suspected of fraud in Los Angeles alone. These providers were responsible for $1.4 billion in Medicare spending in the prior year, with $70 million in suspended funds to date. For revenue cycle leaders, the tightening scrutiny environment puts documentation standards, billing accuracy, and home health coding integrity under direct program integrity review and increases the value of working with experienced home health billing companies.

Senator Susan Collins introduced the Medicare Home Health Payment Integrity and Protection Act (S. 5250) on August 5, 2026, to give CMS expanded authority over home health agency enrollment, oversight, and fraud prevention. The bill addresses a specific and documented market distortion: while the number of traditional Medicare beneficiaries receiving home health services declined from roughly 3.3 million in 2019 to 2.7 million in 2024, home health agency concentration in Los Angeles County expanded sharply in the opposite direction. Los Angeles County holds about two percent of Medicare fee-for-service beneficiaries nationwide but generates nine percent of national Medicare fee-for-service home health expenditures. Both the Medicare Payment Advisory Commission and the California State Auditor have flagged that concentration as a substantial fraud and abuse concern.

This geographic issue translates to consequences beyond Los Angeles. Fraudulent billing patterns contaminate the underlying data Medicare uses to set home health payment rates, compressing reimbursements for home health billing companies that operate legitimately in other markets. Rural agencies, which are already absorbing workforce shortages and elevated care delivery costs, carry less financial cushion against those distortions than larger urban systems.

The bill targets fraud prevention across several operational layers. Key provisions include [3]:

• Identifying verification before enrollment
• Requiring proof of liability insurance for high-risk agencies
• Mandating more frequent surveys of newly enrolled home health agencies, agencies that reactivate their billing privileges, and agencies that undergo ownership changes
• Resetting home health agency payment rates to adjust for fraud
• Increased penalties for not reporting quality data

Pre-claim review requirements (already active in Florida, Illinois, Oklahoma, Ohio, North Carolina, and Texas) would expand under the legislation, making home health coding accuracy and documentation completeness prerequisites to payment rather than factors reviewed after submission. Home health billing companies will have national-level insights into these changes.

Industry response has centered on the bill's dual focus: payment reform and targeted fraud oversight. Jennifer Sheets, CEO of the National Alliance for Care at Home, called the legislation a correction of longstanding reimbursement flaws while building toward a benefit structure suited to current care delivery realities. The Alliance endorsed both the payment reform provisions and the program integrity measures as protective of legitimate providers rather than broadly restrictive.

LeadingAge president and CEO Katie Smith Sloan highlighted the payment reset provision. “Senator Collins, a longtime champion of Medicare home health, appreciates the shortcomings of current Medicare home health payment approaches, as this bill demonstrates. We are particularly encouraged by its recognition that the standard prospective payment amount requires recalibration. We appreciate Senator Collins’ leadership in presenting a much-needed reset of the Medicare home health payment to promote its stability and ensure access. In addition, we also share the desire to address fraud in the home health setting. LeadingAge has long expressed concern about the disproportionate increase in home health providers in Los Angeles County. This bill’s oversight provisions are reasonable, appropriately targeted policies that would help maintain the benefit’s integrity. Those, along with the important proposed payment changes, will help to ensure support for legitimate providers - including our nonprofit and mission-driven members. We look forward to working with Senator Collins to advance this legislation.” [1]

VNS Health pointed to the access dimension directly: hundreds of thousands of Medicare beneficiaries currently can't access skilled home health care. For revenue cycle leaders supporting agencies serving complex patient populations, reimbursement stability and fraud-driven payment distortions show up directly in cash flow, denial rates, and billing for home health services margins - areas of complexity that home health billing companies can be helpful in addressing.

Home health coding accuracy and documentation integrity sit at the intersection of every enforcement priority the Collins bill addresses. Providers that hold their revenue cycle to a denial prevention standard (including pre-bill validation, systematic denial pattern tracking, and home health coding built for audit-ready documentation) carry a measurably lower fraud risk profile under the expanded scrutiny that the bill supports. Denial rates and rework costs that accumulate through reactive billing processes attract the kind of scrutiny that compliance-oriented home health billing companies are specialized in preventing.

3Gen Consulting specializes in helping home health providers navigate exactly these complexities and industry changes. Contact 3Gen's home health billing specialists to discuss how to strengthen your home health coding processes, adapt to this legislation, and protect your bottom line.