Federal settlement addresses Medicare billing and referral practices in home health care.
A recent federal settlement has brought to light ongoing government efforts to address improper billing and referral practices in a home health company. Traditions Health LLC has agreed to pay $34 million to resolve claims that it violated federal law by billing Medicare for services that were not medically necessary and by providing financial benefits to physicians in return for patient referrals. The agreement follows the company’s voluntary disclosure of the conduct to federal authorities and covers activity that occurred over several years.
According to the announcement from the U.S. Department of Justice, the settlement addresses claims submitted from a Traditions location in McAlester, Oklahoma, between 2021 and 2024. Federal investigators alleged that some of the home health services billed to Medicare during that period did not meet medical necessity standards required for payment. Medicare rules limit coverage to care that is reasonable and needed for a patient’s condition, particularly for individuals who qualify for homebound services.
The settlement also resolves allegations tied to physician relationships in Oklahoma and Texas dating back to 2019. Federal officials stated that Traditions paid compensation to certain physician medical directors who referred Medicare patients to the company for home health services. Those arrangements were said to raise concerns under laws designed to prevent financial incentives from influencing medical decision-making. While the claims were not proven in court, federal law bars Medicare from paying claims connected to referral arrangements that break these rules.
Two statutes played a central role in the case. The Anti-Kickback Statute makes it illegal to offer or receive payment in exchange for referrals tied to federal health care programs. The Physician Self-Referral Law, often called the Stark Law, restricts physicians from referring patients for certain services, including home health care, to companies with which they have a financial relationship, unless specific exceptions are met. Claims resulting from violations of these laws are not eligible for Medicare payment.
Federal officials noted that Traditions received credit for its cooperation. After conducting its own internal review, the home health company provided detailed written information to the government and assisted investigators throughout the process. Traditions also reported taking steps to address the issues identified, including removing individuals linked to the conduct, strengthening internal compliance measures, and expanding employee training related to billing and referral rules.
Statements from government leaders emphasized both accountability and the value of early disclosure. Officials said home health care plays an important role for Medicare patients who are unable to travel for treatment, and that compliance with program rules protects patients and public funds. They also noted that companies that identify problems, report them, and act quickly to fix them may limit financial penalties and enforcement consequences.
The investigation involved multiple agencies, including the Civil Division of the Justice Department, the U.S. Attorney’s Office for the Eastern District of Oklahoma, and the Office of Inspector General at the U.S. Department of Health and Human Services. Federal authorities described the case as part of a broader focus on preventing health care fraud, waste, and abuse across Medicare-funded services.
The resolution does not include a determination of liability, and the allegations remain claims only. Still, the settlement serves as a reminder to health care providers of the risks tied to billing errors and referral arrangements. It also reflects the government’s expectation that providers maintain strong compliance programs and monitor relationships that could affect clinical judgment.
Federal officials continue to encourage reporting of suspected fraud through established tip lines and oversight channels. They have said enforcement actions such as this one are intended to protect patients, support fair competition among providers, and preserve the integrity of taxpayer-funded health care programs.
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