Home Health & Hospice Week

Low-key announcement surprises industry.

A new sign indicates that fraud and abuse scrutiny may lighten up for the home health industry.

The Centers for Medicare & Medicaid Services posted a notice to its website, noting that “as of January 30, 2019, there are no active Medicare Provider Enrollment Moratoria in any State or U.S. territories. The Provider Enrollment Moratoria Waiver Demonstration will end when the moratoria expires.” At least one HHH Medicare Administrative Contractor, Palmetto GBA, also has posted the notice on its website.

In further elaboration, CMS told the National Association for Home Care & Hospice that CMS’s “implementation of additional and new safeguard measures in place of the moratoria, will continue the agency’s commitment and focus on protecting beneficiaries from harm and ensuring taxpayer funding is used appropriately to protect resources from fraud, waste, abuse, and avoid other improper payments in both Medicare and Medicaid,” the trade group says in its member newsletter.

CMS indicates it has no immediate plans to reinstate the moratoria, NAHC adds.

History: CMS first implemented the moratoria in July 2013 in Miami-Dade and Chicago (see Eli’s HCW, Vol. XXII, No. 27), two years after the moratorium authority was enacted. Then in February 2014, it added Fort Lauderdale and counties in Texas and Michigan (see Eli’s HCW, Vol. XXIII, No. 6) and in 2016 took the moratoria areas statewide (see Eli’s HCW, Vol. XXIV, No. 30).

In a Federal Register notice last August extending the moratoria for six months, CMS noted that Medicare had denied more than 1,200 enrollment applications from HHAs due to the moratoria.

CMS also announced it was making revisions to the “The Provider Enrollment Moratoria Access Waiver Demonstration,” which would allow for exceptions to the moratoria. CMS told Eli in 2017 that no agency had ever successfully obtained a waiver (see Eli’s HCW, Vol. XXVI, No. 30).

Fraudsters Have Great Documentation

Medicare’s relatively sudden announcement took many in the industry by surprise, they say. “I was … even more surprised at how quietly it lapsed,” notes attorney Robert Markette with Hall Render in Indianapolis.

In its Federal Register notices regarding the moratoria in previous years, CMS noted that “a significant potential for fraud, waste, and abuse continues to exist regarding those provider and supplier types in these geographic areas. The circumstances warranting the imposition of the moratoria have not yet abated, and CMS has determined that the moratoria are still needed as we monitor the indicators and continue with administrative actions to combat fraud and abuse, such as payment suspensions and revocations of provider/ supplier numbers.”

Thus, maybe letting the moratoria expire “represents a tacit admission by CMS that the fraud problems in these areas have declined significantly,” Markette offers. “It seems to me that CMS would not have let the moratoria lapse if they thought it would result in an influx of new fraudulent providers.”

The existing significant logistical and financial barriers to enrolling in Medicare also may have factored into CMS’s decision, theorizes Washington, D.C.-based healthcare attorney Elizabeth Hogue. “Anecdotally, it seems like the process to start a new agency now takes between one and two years and can involve significant expense when considering that staff must be provided to care for at least 10 patients prior to certification,” Hogue points out.

The length of time agencies must wait for surveys in some states also may lead them to seek accreditation, further increasing costs, Hogue adds. “There are already significant barriers to entry, so that moratoria may no longer be needed.”

The industry’s growth rate may also have affected the decision, suggests Tom Boyd with Simione Healthcare Consultants in Rohnert Park, California. “Growth in HHAs has slowed down — and PDGM will slow it more,” Boyd tells Eli.

CMS’s mention to NAHC of “new safeguard measures in place of the moratoria” may refer to the pending Review Choice Demonstration that will put in place pre-claim review. “The last preclaim review project led to a significant decline in the volume of home health claims in Illinois,” Markette points out. “CMS may feel that bringing this program back provides some added protection.”

However: If that is CMS’s rationale, “I would question it,” Markette warns. “Fraudulent providers generally do not have any problems getting their documentation in order.”

An increasing need for home care services as America’s senior population grows may also play a part in CMS’s decision, Hogue suspects. And perhaps “a better understanding of the value of home health services may have supported a decision to permit more agencies,” Hogue adds.

Expect The Market To Change

Lifting the moratoria will significantly impact the affected areas — Florida, Illinois, Texas, and Michigan, Markette predicts. “This will lead to an increase in new providers. I know several companies that acquired providers in those areas, as a vehicle to expansion, but who would have preferred to start a new one,” he says.

Starting an agency from scratch in an area known for fraud and abuse can be beneficial because you won’t inherit any well-concealed compliance — and related billing — problems, Markette points out.

As A Result: “Agencies in these areas will see their value decline,” Markette expects. “The moratoria acted as de facto Certificates of Need.” And the more agencies there are, the more competition existing agencies will face. For years now, the moratoria has prevented new agencies launching, while existing competitors closed due to business, compliance, or other reasons and weren’t replaced, Markette notes. Now, “because new providers can start up agencies, the pool of agencies will expand.”

Who’s Next? But don’t count on moratoria being gone for good. Hospices may be the next target for the enrollment limit, Boyd speculates. The size of the industry, as well as the benefit’s Medicare spending, have been skyrocketing, and “new hospices are more likely to have cap problems and more willing to ‘walk away’ from them,” Boyd offers.

On the other hand: Hospice has “not had the scope of problems that home health has had,” Markette muses. The number of hospices is also still well under that of home health agencies (about 4,500 versus about 11,800 in 2017, according to Medicare Payment Advisory Commission figures).

Plus, “the areas where moratoria were implemented had some extensive issues with actual criminal conduct, not just questionable documentation,” Markette points out. “You are seeing more criminal cases in hospice, but I don’t think we are near to the critical mass that you saw in Miami, Detroit, Chicago, etc.”

Note: CMS’s notice is at www.cms.gov/Medicare/Provider-Enrollment-and-Certification/MedicareProviderSupEnroll/ProviderEnrollmentMoratorium.html.