Home Health & Hospice Week

What took so long, industry members ask about some of the cities chosen.

What happens when home health agencies in your area are paid nearly twice as much as other agencies in the state? The feds shut down new enrollments — at least in the case of the Ft. Lauder-dale, Fla. area.

Ft. Lauderdale, Detroit, Dallas, and Houston are the four new metro areas where the Centers for Medicare & Medicaid Services has instituted a "temporary" moratorium on new enrollees, CMS says in a Feb. 4 Federal Register notice. CMS also has extended the moratorium placed on the Miami and Chicago areas last July (see Eli’s HCW, Vol. XXII, No. 27).

CMS used data mining and law enforcement information to help determine where to exercise its moratorium authority in "the second wave of the agency’s use of this powerful tool to fight fraud and safeguard taxpayer dollars while ensuring patient access to care is not interrupted," it says in a release. (See some of the data considered, p. 43.)

As with the first round of moratoria, representatives of the home care industry have greeted these latest restrictions with open arms. "The extension and expansion of the home health moratorium is a necessary and appropriate measure," says Val Halamandaris of the National Association for Home Care & Hospice in a statement. NAHC has advocated for such a moratorium for years, the trade group adds.

"These moratoria are necessary and supported by ample evidence of high ratios of agencies to patients; higher than normal payments; and extreme variations in service utilization when compared to other counties across the country," Visiting Nurse Associations of America’s Tracey Moorhead says.

In fact, the only question is why CMS didn’t include at least some of these areas in its first moratorium sweep, notes attorney Robert Markette Jr. with Hall Render in Indianapolis. "What were they waiting for here?" Markette asks.

"A moratoria should have been imposed four or five years ago over much of the country," maintains financial consultant Tom Boyd with Simione Healthcare Consultants in Rohnert Park, Calif. "This is a case of closing the barn door after the thieves have stolen the horses."

In areas with an overabundance of agencies, "the lack of additional areas for the moratoria does not make sense," Boyd tells Eli.

Experts Called It

Industry experts told Eli last July that Detroit, Houston, and Dallas would be next on the moratorium hit list (see Eli’s HCW, Vol. XXII, No. 27). Ft. Lauderdale was a bit less expected, but can be viewed as an extension of Miami since it is adjacent.

"We have seen a tremendous amount of compliance monitoring going on in each of the areas in which the moratoria are now in place," notes financial consultant Mark Sharp with BKD in Springfield, Mo. "These are also all areas with a large number of providers."

"We have an excess capacity" of HHAs, Linda Quick of the South Florida Hospital and Healthcare Association told the Miami Herald. "Any resident with a Rolodex and a home health aide thinks they’re a home health agency."

The only surprise is that these cities weren’t included in the first round, Markette contends. (For predictions on the next round of cities CMS will choose for the moratoria, see story, p. 42.)

Get More Specific, Industry Urges CMS

While industry reps welcomed the moratorium expansion, they also took CMS to task for a number of issues related to the measure.

"Currently, CMS takes a broad-brush ap-proach to regulatory oversight that allows and en-courages CMS contractors to be far too punitive on the majority of good agencies who provide high quality services for patients, including vulnerable and complex populations," Moorhead argues on the VNAA website. "Many of these agencies lack the resources to respond to auditor requests for hundreds of patient records over several years."

"The vast majority of the home health care community are terrific people providing a valued and needed community service," Boyd insists. "The MACs and CMS use a shotgun approach in hassling the providers on F2F and ADRs and that is not justified and is excessive and unreasonable."

The moratoria also won’t address existing fraud and abuse at already-operating agencies, adds Moorhead. The moratoria "serve simply to dissuade unscrupulous operators from opening new agencies in these counties," she explains. The existing agencies in these areas "merit closer regulatory oversight and auditing."

At least the moratoria are more targeted than "useless" measures that supposedly fight fraud abuse, such as face-to-face and revalidation, Mar-kette offers.

Winners: Agencies currently operating in the moratoria areas benefit in two ways from the new restriction, Markette observes. First, the value of their agencies is likely to increase, because acquisition will be the only way to enter the market. Second, the moratoria will limit competition from providers entering the market.

However, the influence on competition is likely to be very minimal, because these markets are already so oversaturated with home care providers, Markette points out.

Losers: The new moratoria leave HHAs that are trying to open high and dry. "It has to be very frustrating for groups already in the process of home health startup in these areas," Sharp expects. "Starting a home health agency is not an inexpensive endeavor, and I’m sure some individuals have already incurred significant costs in their effort only to have the door closed."

And they shouldn’t expect to wait around for the moratoria to be lifted. CMS has extended the six-month moratoria on Miami and Chicago for another six months. You can expect to see that trend continue with the new moratoria areas, and further extensions for the old ones, experts agree.

Note: The Federal Register notice, which includes a list of the counties affected by each moratorium area, is at www.gpo.gov/fdsys/pkg/FR-2014-02-04/pdf/2014-02166.pdf.