A new federal pilot program will allow healthcare companies, including home-based care providers, to self-report and rectify conduct, such as compliance issues.

The U.S. Department of Health and Human Services (HHS) and the Department of Justice (DOJ) Civil Division announced the six-month self-disclosure pilot program on Thursday. The pilot provides more clarity on resolving certain civil billing violations, though concerns about repayment costs and risk exposure for small providers remain, home-based care industry experts told Home Health Care News.

“Companies that identify and report potential violations should have a clear way to correct them, repay the government and continue serving people in federal healthcare programs,” Centers for Medicare & Medicaid Services (CMS) Administrator Dr. Mehmet Oz said in a Thursday statement. “This pilot creates a defined path to accountability while helping CMS focus its enforcement resources on fraud.”

The pilot program, called the Healthcare False Claims Act Self-Disclosure Pilot Program, allows healthcare companies to voluntarily disclose civil violations of the federal False Claims Act.

The False Claims Act states that an entity that knowingly submits or causes to submit false claims to the government is liable for triple the government’s damages as well as an inflation-linked penalty, according to the DOJ.

Through the new pilot program, healthcare companies can resolve their disclosed conduct through a coordinated civil release of liability under the False Claims Act and some HHS administrative authorities.

What it means for home-based care providers

Providers are still absorbing what the day-old initiative means for the next six months.

However, the pilot will clarify how to disclose billing problems uncovered through a home-based care provider’s internal audits, Monica Cutia, HealthView Home Health & Hospice’s vice president of clinical operations, told HHCN in an email.

Los Angeles-based HealthView provides home health, palliative care, hospice, in-home physical therapy and occupational therapy services within Southern California’s Los Angeles, Orange, Riverside and San Bernardino counties.

Cutia told HHCN that the company’s internal audits rarely show fraud. Issues that do arise usually involve a certification signed two days late or a face-to-face note that does not include all the CMS requirements for billing, Cutia said.

“Those are documentation problems with billing consequences, and until now, when we found a pattern, nobody could tell me exactly what would happen if we reported it,” Cutia said.

Cutia added that repayments for billing errors did not hold providers back as much as the Corporate Integrity Agreement (CIA). The CIA is an agreement between entities and the Office of Inspector General that details how the entity may improve compliance measures and prevent fraud as part of a civil settlement.

“A lot of operators fixed the problem, refunded what they believed they owed and hoped that was the end of it. Now there’s a number, a timeline and no CIA,” Cutia said. “That changes the conversation you have with your clinical directors and compliance counsel.”

Therefore, the Healthcare False Claims Act Self-Disclosure Pilot Program benefits providers who are in the middle of the market, she said. This includes providers that are regional, multi-service line, large enough to be a target for fraud enforcement and have the resources to identify internal document issues or other problems, Cutia said.

The program also benefits organizations buying or selling healthcare agencies, since successor liability acts as a multiplier factor for buyers’ financial exposure and buyers can address inherited liability exposure on known terms, Cutia added.

“What I’d tell people not to miss: It’s a six-month window, not a new enforcement posture,” Cutia said. “It’s civil only, and that matters because the exposure that does the most damage in hospice and home health isn’t a late certification — it’s the referral side. Paying for admissions, free staffing or supplies to a facility, medical director contracts that don’t match the work. Those fall under the Anti-Kickback Statute, which is criminal, and this pilot doesn’t touch it.”

The program also benefits home-based care operators that are already conducting internal audits and have the infrastructure to act on findings, Cutia added.

Extending or finalizing the pilot program

The Home Care Association of America (HCAOA), a Washington D.C.-based national association representing more than 5,000 home care agencies, supports the initiative and hoped the government will consider extending the program or making it permanent past its April 22, 2027 end date, if appropriate.

Employees at legitimate, law-abiding providers can sometimes commit acts of misconduct without the organization’s leadership knowing, a spokesperson for the HCAOA told HHCN in an email. In such instances, it is crucial for providers to proactively identify fraudulent or misappropriate payments without the risk of exclusion from federal healthcare programs.

“We appreciate that the HHS and the DOJ self-disclosure pilot will allow well-meaning providers to take affirmative actions to resolve civil False Claims Act liability without facing exclusion, a Corporate Integrity Agreement or CMS enrollment revocation,” the spokesperson said.

However, the HCAOA noted a few causes for concern with the pilot. First, the repayment multiplier can unfairly punish providers, especially those in small, community-based organizations that lack financial reserves to offset penalties.

The HCAOA suggests the HHS and DOJ include possible waivers for the multiplier and to require only repayments of fraudulent transactions when applicable.

“Nonmedical home care is generally a high-volume, low-margin business, leaving little financial flexibility for an enhanced multiplier on repayment,” the spokesperson said. “Providers who affirmatively identify program integrity concerns should not be punished in this manner, particularly if it occurs in isolated incidents and is not a systemic company-wide failure.”

Second, the HCAOA is concerned that the pilot program could encourage unsupported claims of misconduct against home care providers in particular. The initiative appears as the DOJ announces the Fraud Whistleblower Incentive Program, which financially rewards individuals who alert authorities to misbehavior that leads to criminal charges. The DOJ must include protections against submitting unsubstantiated claims, according to the HCAOA.

“Coupled with increasing attention on home care services that often misunderstands the nature of long-term services and supports and frames legitimate care as unnecessary or inappropriate, this program creates undue risk on home care providers,” the HCAOA spokesperson said.