$600 Million Doctor Bill Stuns Medicare

Person holding credit card near laptop displaying Fraud.

A suspected Medicare home-health fraud surge in Los Angeles is now colliding with federal rate-setting in a way that could punish honest providers nationwide.

Story Snapshot

Federal reporting and industry analysis flag Los Angeles County as an outsized outlier in home-health billing and agency growth, raising fraud concerns.
A single physician cited in reporting billed Medicare roughly $600 million from 2021–2024, including about $210 million in 2024—higher than the viral $120 million claim.
CMS is proposing significant payment reductions for 2026 using PDGM-era utilization assumptions that stakeholders say may be distorted by suspicious LA-area claims.
Home-health agencies have been closing across the country, and access pressure is rising—especially in rural counties—while Washington debates whether payments are “adequate.”

Los Angeles fraud allegations meet a national payment formula

Los Angeles County has become a focal point in the Medicare home-health debate because multiple analyses describe a sharp, localized spike in home-health agencies and billing patterns that look abnormal compared with the rest of the country. Reporting tied to a congressional outreach effort highlighted one physician’s massive Medicare billing totals and urged a closer look at how those claims flow into the data Washington uses to justify nationwide payment cuts.

That distinction matters because viral claims floating online—such as LA County representing 18% of all U.S. home-health billing—are not fully verified in the provided research. What is documented is the scale of a single provider’s Medicare billings and the broader LA-area anomaly. When rate formulas treat localized fraud as “national behavior,” policymakers risk cutting legitimate care while the bad actors keep exploiting weak oversight.

What the documented numbers actually show

The most specific fraud-related figure in the research comes from a report describing an unnamed Los Angeles physician who billed Medicare nearly $600 million from 2021 through 2024, including about $210 million in 2024. That 2024 figure contradicts the popular “$120 million in one year” framing and underlines a recurring problem in fast-moving online narratives: the underlying issue can be real while key numbers get distorted.

MedPAC’s analysis adds important context by pointing to Los Angeles County as an unusual driver of agency counts. In 2023, the national number of home-health agencies rose about 3.4%, but the increase was attributed entirely to growth in Los Angeles County; excluding LA, the national count declined. That does not prove fraud by itself, but it supports the argument that LA’s pattern is not representative of national operations.

How PDGM and “behavioral adjustments” turned anomalies into policy

CMS shifted Medicare home health to the Patient-Driven Groupings Model (PDGM) in 2020, changing payment units and triggering ongoing “behavioral adjustment” debates about whether providers changed coding and utilization in ways that increased spending. Industry comments argue that CMS is relying on PDGM-era claims data that may include “highly suspicious” LA-area billing, which could inflate estimates of overpayment and justify deeper nationwide reductions.

For 2025, CMS finalized a net 0.5% payment update for home health—an increase that still included offsets tied to PDGM assumptions. For 2026, CMS proposed significantly larger reductions, including a permanent adjustment described as -4.06% and an additional temporary adjustment of about -5%. Supporters of the cuts argue the agency must preserve budget neutrality; opponents argue the baseline is contaminated by outlier markets.

Access pressures as agencies close and communities thin out

Behind the payment fight sits a real-world access question. Industry and trade reporting cited in the research describes more than 1,000 home-health agency closures since 2019 and warns that many counties have lost at least one provider. The same materials describe fewer Medicare fee-for-service users receiving home health and fewer visits over time, even as policymakers insist most ZIP codes still have some nominal coverage.

MedPAC’s view complicates the picture by arguing that utilization changes can stem from enrollment shifts and fewer hospitalizations rather than systematic overbilling. Even if that is true nationally, the LA spike still matters because it can skew averages. From a conservative perspective focused on competent governance, the basic test should be straightforward: isolate suspected fraud aggressively, then set national policy based on clean data—rather than using a blunt-rate weapon that hits compliant providers first.

Congress pushes for scrutiny while CMS moves toward 2026

A member of Congress called on CMS to investigate the LA-area fraud allegations and reconsider the proposed 2026 rule, framing the issue as both waste prevention and patient-access protection. That pressure arrives as CMS continues the rulemaking process and as home-health operators warn that further reimbursement compression will push more agencies to reduce services or exit, especially in harder-to-serve rural communities.

Eyes on California: 18% of Total US Home Health Care Billing Is Coming Out of LA County – One Doctor Billed Govt. for $120 Million IN ONE YEAR! (VIDEO) https://t.co/2g4o94ETJc #gatewaypundit via @gatewaypundit

— John Steich (@Vetteman42) February 2, 2026

What remains unclear from the provided research is whether CMS will explicitly exclude suspicious LA-area claims from the data used to justify permanent adjustments, as has been done in other Medicare contexts. Until that question is answered, the public debate will stay stuck in a frustrating place: taxpayers hear “fraud,” honest providers hear “cuts,” and seniors and families are left wondering whether care at home will still be available when they need it.