Colin May, M.S., CFE, 3CE, INCI
The Boston Globe article was published on September 18, 2016 on the rising cost of home healthcare in Massachusetts; it signaled that a wide-spread audit was targeting home health agencies (HHAs) who were allegedly overbilling the state’s Medicare program, called MassHealth.
Registered Nurse Faith Newton and her husband had owned a HHA named Arbor Homecare Services, LLC since January 2013. According to court documents, her scheme began unraveling as soon as the article came out: she texted a colleague at the HHA: “Hope to God they don’t come here”—because she knew what they would find.
MassHealth did come and in January 2017, suspended all payments to Arbor Homecare, citing concern over massive suspicious claims. In early 2021, Newton and a co-conspirator were indicted on fifteen counts of conspiracy to commit healthcare fraud, healthcare fraud, kickbacks, false statements, and money laundering. After an initial mistrial, Newton was eventually convicted in the fall of 2024 and sentenced in January 2025 to over 12 years in prison and restitution of nearly $100 million.
An extensive analysis of this case has demonstrated several lessons that can be useful for compliance officials, healthcare executives, auditors, and fraud investigators. The case shows how vulnerable home healthcare is and why HHAs should be considered high risk based on the amount of money, the lack of visibility, and the particularly vulnerable nature of the patients.
A SPRAWLING FRAUD SCHEME
Over a four-year period, Medicaid and MassHealth paid Arbor over $165 million—the government alleged that over $100 million of that was fraudulent. The indictment alleged that Newton and her company carried out a wide-ranging fraud scheme:
- Billing for home health services that were not medically necessary
- Billing for home health services that were not authorized by the patient or physician
- Manipulating medical assessments to falsely determine that the patients needed support for Activities of Daily Living (ADL)
- Billing for home health services that were never delivered
- Hiring unqualified and untrained individuals to serve as home health aides, and giving them the answers to the required test
- Falsely attesting that the untrained home health aides had received a 75-hour training course, when they did not
- Paying kickbacks and bonuses to recruiters to sign up new home health patients, and
- Falsifying nursing notes by “copy and pasting” information making it appear that the patient was seen, when they had not been.
COLOSSAL COMPLIANCE FAILURE
Faith Newton was in full control of her company. Nothing happened without her approval. So, what can this teach us about compliance? First, it underscores the importance of leadership and the way that ownership and senior executives treat compliance. Do they see it as a “nice to have” or a “must have?” Are they willing to voice their support for compliance, in word and in action, and model the appropriate way of doing things?
In a situation where fraud has permeated the company, such as this case, where it originated from the very top, there are significant challenges for employees and staff who are struggling to figure out what to do. This is why insurance companies, state agencies, and the Federal government maintain fraud hotlines to obtain information anonymously. Qui tam (whistleblower) lawsuits can also be effective. And this is why law enforcement and investigators need to be made aware of these issues early so they can prevent further losses.
In the lead up to the trial, one of Newton’s potential defenses centered around her belief that “everyone was doing it.” This was likely fueled by the Boston Globe article and a subsequent series of articles that drew public attention to the high cost of home healthcare, often driven by unscrupulous activities like those Newton was orchestrating. While the court denied her ability to use that defense, it is something that compliance officials need to be aware of.
COMPLIANCE LESSONS
- Due diligence is important. After MassHealth suspended Arbor Homecare’s payments in 2017, Newton was back up and running her scheme according to prosecutors, using another corporate entity called Golden Living Homecare. What is unique about this entity was that, according to the Massachusetts Secretary of State, Golden Living had been established nearly 10 years earlier. This is why due diligence, third-party risk management, and background investigations are so critical. Compliance officials should be on the lookout for these types of situations where a new owner comes into an established company. A review of public records would have revealed that Newton was an officer or director of at least five other companies—and her husband (who had a different last name) was the manager of Arbor Homecare and one other HHA.
- Watch for a “no complaint” policy. On several occasions, Newton was informed that patients, their families, or others had made complaints about “no-show nurses” or home health aides who weren’t performing their job. Newton didn’t want to hear it and informed staff not to include any complaints in notes or documentation. She even terminated two senior staff members when they brought discrepancies to her attention. Complaints are an important indicator to identify potential wrongdoing. All complaints should be recorded in a central location so that the compliance team can review them. Using a random sampling could help uncover policy violations or fraud. Feedback (both positive and negative) should be solicited routinely in any interaction with patients, providers, and families.
- Trust is not an effective internal control. During the trial, Newton tried to blame her billing company for the entire fraud. Billing companies are not auditors and do not verify that the plans of care are correct or patient visits occur. HHAs need to have strong quality assurance and internal review function to ensure that the medical needs are addressed appropriately. Presuming that the information forwarded from Arbor Homecare was correct, the billing company simply billed as they received it. However, their contract included specific language about the accuracy and certifications made by the HHA. These contracts and the compliance language in them are particularly important; considering these risks and how to build in internal controls, and not simply “assume” the other party is being compliant, is a key strategy to mitigate risk of blame.
CONCLUSION
The case of Faith Newton and Arbor Homecare serves as a stark reminder that compliance is not just a regulatory obligation but a fundamental aspect of ethical business practice. Effective compliance requires vigilant leadership, thorough due diligence, an environment that welcomes reporting and feedback, and robust internal controls and monitoring. By fostering a culture where compliance is treated as essential, organizations can protect themselves from fraud, maintain their integrity, and ensure the delivery of quality care for patients.
Colin May, CFE, 3CE, INCI, is Professor of Forensic Studies and Criminal Justice at Stevenson University in Owings Mills, Md. A member of the American College of Healthcare Executives, he has spent the past 20 years in oversight, investigations, and compliance. He can be reached at cmay3231@stevenson.edu.