Home Health & Hospice Week

Moratorium concerns persist.

Home health agencies with subunits have less than two months to convert them, as required by the incoming Conditions of Participation, and that timeline could prove difficult depending on your state's rules.

Background: In the Conditions of Participation finalized back in January, the Centers for Medicare & Medicaid Services announced it was doing away with the current "subunit" designation for home health agencies (see Eli's HCW, Vol. XXVI, No. 7). Instead, HHAs have to convert their subunits to either freestanding agencies or branches.

After agencies and industry representatives protested that it would be impossible to meet the sixmonth deadline for CoP implementation on July 13, CMS pushed the deadline back to Jan. 13, 2018, to give agencies more time to come into compliance with the new regs.

Problem: However, CMS failed to put out instructions on converting the subunits - until now. Less than two months before the deadline, CMS has issued a Survey & Certification Memo outlining the steps agencies must take to switch over their subunits. CMS announced the forthcoming memo in the Nov. 15 Home Health Open Door Forum, and issued S&C: 19-03-HHA Nov. 17.

The memo spells out the steps agencies must take for conversion (see story, p. 331). But "the instructions don't seem to take compliance with state certificate of need laws into account," worries Washington, D.C.-based attorney Elizabeth Hogue. "CON requirements vary from state to state."

For example: One significant problem these instructions cause "may be if the CON laws in a state prohibit conversion of subunits to freestanding agencies," Hogue tells Eli. "The subunit is likely to be too far from the parent agency to become a branch office or the agency may have established a branch to begin with instead of a subunit. This means that agencies may lose locations altogether."

Even if a conversion to a branch or freestanding agency isn't prohibited, the cost of converting may be very steep, Hogue says. "Freestanding agencies will be required to have their own governing bodies and administrators, whereas subunits are not required to do so," she notes. "The difference between the requirements for subunits and freestanding agencies may require costly corporate reorganizations, operational changes, and hiring relatively high-priced staff - all before Jan. 13," she exclaims.

The sheer lack of time is a major problem for subunits that need to convert to freestanding agencies, agrees Judy Adams with Adams Home Care Consulting in Durham, North Carolina. Appointing a separate governing body and administrator is the sticking point. "There is less than six weeks to accomplish this with holidays in the middle, so agencies ... should have already been looking to hire a qualified administrator and name a governing body," Adams says. "It is a very tight time frame if they are starting recruitment now, with no previous action on locating qualified candidates." Completing the appointment must be "a high priority to be prepared in time," she warns.

Bright side: The good news is that "the MACs have already done a preliminary processing [to] reclassify all subunits to freestanding agencies," Adams tells Eli. That means "there should be enough time for HHAs to submit their re-enrollment forms" because CMS isn't considering these conversions as the establishment of new agencies. Thus, "there is no need for a survey before the official change can be made," Adams cheers.

CMS takes pains in the memo to address concerns about moratorium areas. Currently statewide moratoria on new HHAs apply in Florida, Illinois, Michigan, and Texas (see Eli's HCW, Vol. XXVI, No. 29). No HHAs have won an exemption to the moratoria under the Provider Enrollment Moratoria Access Waiver Demonstration.

For freestandings: "The transition of the former Subunit to a distinct/freestanding HHA does not impact any applicable HHA Moratorium currently imposed by the CMS Center for Program Integrity," CMS says in the memo.

For branches: Later in the memo, CMS specifies that "although the former Subunit may be located within a HHA Moratorium area, as defined by the CMS Center for Program Integrity, there is no prohibition against the former Subunit becoming a Branch within the moratorium area. The former Subunit was an existing provider within the designated moratorium area and thus the former Subunit transition to a Branch(es) does not create the addition of a new provider within the moratorium area."

Hogue still has concerns about conversions to freestanding agencies in moratorium areas, though. If they were prohibited, subunits that are too far away from parents to become branches will be left high and dry.

Expect A Survey Within A Year

Subunits that convert may not get surveyed immediately, but it probably won't take too long. "Although, the new distinct/freestanding HHA must meet all the HHA CoPs (including having an independent governing body and administrator) as of January 13, 2018, [Survey Agencies] are not required to go onsite on or before January 13, 2018 to ensure that the new distinct/freestanding HHA now provides its own governing body and administration," the memo reads. "A standard survey must be completed within one (1) year of the January 13, 2018 effective date of the rule to verify that the now distinct/freestanding HHA is in compliance with all HHA CoPs."

At least agencies that have difficulty transitioning their subunits won't have to worry about devastating Civil Money Penalties, since CMS has said surveyors will not be imposing CMPs for the first year under the CoPs, except in extreme cases (see story, p. 332).