by James C. Sherlock

In the first article in this series, the author revealed the names of the medical directors of each of Virginia’s nursing homes and the hours of medical director time for each facility as reported in the second quarter of 2025.

Almost half of Virginia’s nursing homes reported zero hours from their medical directors. The author assumed they billed Medicare, Medicare Advantage, and Medicaid directly for those services. So, he checked Medicare records to get a general sense.

One physician’s records were particularly curious. This article will not reveal his name. It is really not about him. It is about the government’s woeful lack of capability to analyze and detect fraud in the nearly infinite amount of Medicare data it collects.

In CY 2018, he billed primarily for nursing home services and received about a quarter of the Medicare fees he received in 2022.

He changed his practice. He billed for very few nursing home services in 2022. All but $7,000 of his Medicare payments in that year came instead from home health-related services. It proved to be a profitable career move. Medicare paid almost $900,000 in 2022 for billing under his personal National Provider Identifier (NPI). That did not include an estimated $500,000+ more from Medicare Advantage and an unknown amount from Medicaid. Then there is private insurance.

Home health? Who knew?

Broadly speaking, the Medicare home health program is an alternative to a skilled nursing facility for those who do not need custodial care. A physician must certify to Medicare the need for home health and re-certify it periodically.  It can be a better experience for many than a nursing home. But there is a lot of money sloshing around, and it needs to be watched.

Home health agency (HHA) personnel visit beneficiaries’ homes to provide:

• skilled nursing care;
• physical, occupational, and speech therapy;
• social work; and
• home health aide services.

Telehealth services, such as remote patient monitoring and virtual visits, are covered.

HHAs are paid a base rate for their geographic area and an adjustment based on the patient’s needs. They are not reimbursed for providing physician services. But, as we will see, doctors have broad roles in that system, for which they are paid under the Medicare physician fee schedules.

A curated spreadsheet shows the specifics of this particular doctor’s Medicare reimbursements in 2022.

According to the calculations shown, Medicare paid him $889,517 for 67,122 services. That is not a misprint – 67,122 services. Included were service fees for 1,286 hospital beds and 2,137 wheelchairs.  He certified 882 patients for Medicare-covered home health services and re-certified 456.

Those figures represent only traditional Medicare fee-for-service. They do not include Medicare Advantage or Medicaid services or the associated fees.

In Virginia, 1.26 million residents were enrolled in Medicare in 2022.  Of those, 38% were enrolled in a Medicare Advantage plan. So, if this physician, hypothetically, had been paid by Medicare Advantage insurers for a proportional number of identical services at the same rates as Medicare, he would have been paid another $545,187. And another 788 hospital beds and 1,309 wheelchairs would have rolled out of the durable medical equipment stores.

Taxpayers would like a little more clarity from the government on whether all of that is OK.

Another question. This physician was also the medical director of multiple nursing homes that reported no medical director on their payroll. He billed Medicare for only 69 nursing home services – about 45 hours – all for individual patients in 2022. Who performed the medical director’s job?

Bottom line

The federal agency responsible for investigating and addressing Medicare fraud is the Department of Health and Human Services (HHS). HHS has its own investigators and can bring in the FBI if needed. But instances like this should be flagged by CMS’s computer analytics. They are not. HHS will have to clean massive errors in their databases, then leverage AI to crawl them.  

In 2024, the federal government spent $1.1 trillion on Medicare and $618 billion more on Medicaid.  

So perhaps HHS will move with some urgency to plug the leaks.