Home Health Fraud Red Flags: FinCEN's $17.5 Billion Report Shows What Your Bank Is Watching
Home health agencies were named as the suspected fraudulent provider in nearly 32% of the health care fraud reports banks filed with the Treasury Department — more than any other provider type, and four times hospice's 8%. That is the central finding of FinCEN's Health Care Fraud: Trends in Bank Secrecy Act Data, released September 9, 2026, which analyzed 5,702 suspicious activity filings covering about $17.5 billion in suspect transactions. It lands a month after the Justice Department named home health and hospice schemes an enforcement priority, and while a national enrollment moratorium is still in force. The takeaway for a legitimate agency is not alarm. It is that your bank account is now a compliance document, and the patterns banks flag are ones a clean set of books avoids.
Key Takeaways
FinCEN reviewed 5,702 Bank Secrecy Act reports filed March 1, 2025 – February 28, 2026, flagging about $17.5 billion in suspicious activity (completed and attempted).
Home health care was the most frequently identified suspected fraudulent provider type: more than 21% of all reports and nearly 32% once Puerto Rico Medicaid-eligibility reports are excluded.
Hospice care was second at 8%, followed by behavioral health/addiction treatment (7%), medical equipment (5%), and adult or child daycare (3%).
Most suspect home health businesses were registered at residential homes, and at least 43% of the non-Puerto Rico reports involved companies at residential addresses.
The median suspicious amount received per report was $611,667; 22% of reports named a Medicare Administrative Contractor as the payment source.
Fewer than 5% of reports involved seemingly legitimate providers; FinCEN says that segment may be underrepresented because it has fewer obvious banking red flags.
DOJ's National Fraud Enforcement Division named home health and hospice schemes among its priorities in an August 13, 2026 memorandum.
CMS reports it has suspended payments to more than 800 hospices and home health agencies in Los Angeles County ($1.4 billion in prior-year Medicare spending) and revoked more than 300 California agencies in 2026.
What FinCEN Actually Measured
FinCEN is the Treasury bureau that receives suspicious activity reports (SARs) from banks, credit unions, and other financial institutions. This report is not an audit of claims. It is a read of what 471 financial institutions saw in their customers' accounts and chose to report.
The dataset at a glance
Metric | Value | Source |
|---|---|---|
Reports analyzed | 5,702 | FinCEN FTA, Sept 2026 |
Suspicious activity reported | ≈ $17.5 billion | FinCEN FTA |
Average / median per report | ≈ $3.3 million / ≈ $600,000 | FinCEN FTA |
Filed by depository institutions | ≈ 89% of reports | FinCEN FTA |
Reports naming Medicare and/or Medicaid | 2,190 (≈ 38%) | FinCEN FTA |
Reports naming a MAC | 1,247 (≈ 22%) | FinCEN FTA |
Provider types flagged
Provider type | Share of reports* | Source |
|---|---|---|
Home health care | 32% | FinCEN FTA, Figure 5 |
Hospice care | 8% | FinCEN FTA, Figure 5 |
Mental/behavioral health; addiction treatment | 7% | FinCEN FTA, Figure 5 |
Medical equipment (incl. DME) | 5% | FinCEN FTA, Figure 5 |
Adult and child daycare | 3% | FinCEN FTA, Figure 5 |
*Excludes reports describing possible Medicaid eligibility fraud in Puerto Rico. Including them, home health is just over 21% of the full dataset; FinCEN's executive summary rounds this to 20%.
The Banking Patterns That Draw a Report
FinCEN describes most flagged entities as providers that "did not appear to offer any medical services." Their banking behavior is what gave them away — and several of those behaviors can show up innocently in a small, disorganized agency.
Red flags FinCEN describes
Pattern | What FinCEN saw | The clean-books version |
|---|---|---|
Residential or non-medical address | Most suspect HHAs registered at homes | Operating address matches PECOS, licensure, and bank records |
Rapid pass-through | Medicare/Medicaid deposits quickly sent to unrelated businesses | Payments to vendors supported by contracts and invoices |
Personal and luxury spending | Proceeds used for personal expenses | Owner compensation run through payroll or documented draws |
Commingling | Health care receipts mixed with other income | One operating account per entity, reconciled monthly |
Cash, P2P, international transfers | Cash withdrawals, P2P apps, some funds abroad | Payments by traceable methods with a business purpose |
Examples from the report
FinCEN cites roughly $4 million from insurers, including MACs, paid to a California home health business in an office building that also took in funds from non-medical companies and moved money to lenders and a construction company. In another case, about $1.4 million in state payments to a Maryland home health business registered at a residence went to credit cards, living expenses, and a plastic surgeon. A third, an Indiana home health business at a residential address, received state health plan payments alongside cash deposits and P2P transfers. On the hospice side, filers reported potentially fraudulent hospices in northern Los Angeles County sending proceeds to catering companies, bakeries, and construction firms owned by the same network.
Why This Lands on Legitimate Agencies
FinCEN's own caveat matters: suspicious activity reporting "should not be considered a complete representation" of any fraud type, and a report can include legal activity. Being the subject of a SAR is not an accusation. But three things make it relevant to every home health owner.
Your bank is running its own analytics
Two depository institutions filed 29% of all reports in the dataset, and one filed about 1,100 on its own. Large banks screen for health care receipts that move oddly. An agency that pays a related company, moves cash between entities, or pays the owner irregularly out of the operating account can look, in the data, like the pattern FinCEN describes.
The government is connecting datasets
CMS's enrollment moratorium fact sheet describes coordinated payment suspensions, site visits, fingerprint-based background checks, and revocations. DOJ's August memo commits the new Fraud Division to data-driven targeting. FinCEN's report is a third dataset pointing at the same provider type.
The cost report is the other half of the picture
Related-party payments that look odd in a bank feed must be supported on Worksheet A-8-1 of your cost report at cost. If the bank statement shows a transfer to an owner-affiliated management company, the cost report should show exactly what that company provided and what it cost. We build that support as part of every Medicare cost report filing.
A Banking Hygiene Checklist for Home Health and Hospice
None of this is about avoiding reports. Structuring deposits or transfers to stay under reporting thresholds is itself a federal crime. It is about making sure your legitimate activity reads as legitimate.
One entity, one operating account. No personal expenses, no other businesses.
Match addresses everywhere — PECOS, state license, bank KYC file, and the door where staff actually work.
Pay owners through payroll or documented distributions, on a schedule, approved in writing.
Paper every related-party arrangement with a written agreement and cost support before the first payment.
Avoid cash and P2P apps for business payments; use ACH or check with an invoice.
Reconcile monthly and keep the reconciliation, not just the bank statement.
Respond fully and quickly when your bank asks about a transaction — a documented answer is the best outcome.
If your books are not reconciled monthly or your entities share accounts, fix that before year end. It is the core of our bookkeeping services for home health and hospice agencies.
The Bottom Line
Banks flagged home health more than any other provider type, and hospice ranked second. Most flagged entities were not real providers, but the patterns that exposed them — residential addresses, pass-through payments, commingled accounts, irregular owner draws — also show up in real agencies with sloppy books. Separate the accounts, match the addresses, document the related parties, and reconcile every month. To review your banking and related-party setup before someone else does, schedule a free consultation.
Sources
FinCEN, Financial Trend Analysis — Health Care Fraud: Trends in Bank Secrecy Act Data, September 2026 — https://www.fincen.gov/system/files/2026-09/FTA-Health-Care-Fraud.pdf
FinCEN, "FinCEN Issues Financial Trend Analysis on Health Care Fraud," Sept 9, 2026 — https://www.fincen.gov/news/news-releases/fincen-issues-financial-trend-analysis-health-care-fraud
U.S. Department of Justice, "Assistant Attorney General Colin M. McDonald Issues Memorandum on the National Fraud Enforcement Division's Enforcement Priorities," Aug 13, 2026 — https://www.justice.gov/opa/pr/assistant-attorney-general-colin-m-mcdonald-issues-memorandum-national-fraud-enforcement
CMS, Medicare Enrollment Moratoria Fast Facts — https://www.cms.gov/files/document/medicare-enrollment-moratoria.pdf
CMS, Provider Enrollment Moratoria (page last modified Aug 27, 2026) — https://www.cms.gov/medicare/enrollment-renewal/providers-suppliers/chain-ownership-system-pecos/provider-enrollment-moratoria
Last updated: September 2026.
Soriaga & Associates, LLC is a CPA firm specializing in home health, hospice, and home care accounting and Medicare cost reports.
Comments