CMS Fails to Use Moratorium Power to Cut Down on Home Care Fraud

Home health care fraud has made national headlines recently with multi-million-dollar fraud busts having taken place in Dallas and the Miami area in the past several months. A hearing held in late April before the Senate Finance Committee addressed the issue and brought a new—albeit old—potential solution to light.

While many proposals have been made toward the effort of fraud care prevention in the home health care business, the idea of a moratorium has not been used in more than a decade. It might be about time to revisit the idea, the National Association for Home Care & Hospice said in a statement last week following the hearing.

The Affordable Care Act authorizes the Secretary of Health and Human Services to implement a temporary moratorium on new home health care agencies in any state without either licensure or Certificate of Need (CON) requirements, or in any state where the growth in new agencies in the last four years has exceeded 15%; and/or in any state where data on “agencies per capita” indicate sufficient coverage, the Home Care Alliance of Massachusetts explains on its website.

While this is a possible solution, advocates are pointing to it as a temporary fix.

“We’re not looking at it as an overnight solution,” says Bill Dombi, vice president for law at NAHC. “Temporary is all we are looking for.”

The effort would be targeted, Dombi says, based on data that indicates areas where home health care growth is taking place on a disproportionate level. For example, New York City has around 35 to 40 agencies, he says, compared with Houston, which has around 800.

“Let’s stop the growth of the risk,” he says, noting the discrepancies between states and counties on the number of home health agencies and in particular, those that are new. “If you look at the providers in Texas and Miami, they’re all newbies,” he says. “They came into being in 2008.”

An annual report to Congress by the Medicare Payment Advisory Commission underlined the concern in certain areas.

“The high rate of growth is a particular concern because the new agencies appear to be concentrated in areas where fraud is a concern: California, Texas, and Florida,” the March report states. “These states, like most, do not have state certificate-of-need laws for home health care, which can limit the entry of new providers.”

There is some historical precedence for a moratorium in the industry, with six-month cap set under the Clinton Administration in 1997 in an effort to combat Medicaid fraud. “That step we thought was a responsible one back then because of the explosion in providers,” Dombi says. The concept became possible once again under the Affordable Care Act, which gave the Centers for Medicare and Medicaid Services Secretary the ability to impose one.

Today, however, the idea is getting less reception from policy makers.

“CMS views this authority as a key piece of its comprehensive strategy for preventing fraud, waste, and abuse,” said Dr. Peter Budetti, CMS Deputy Administrator for Program Integrity in an email to Home Health Care News. “We are currently evaluating all areas of the Medicare fee-for-service program to determine where use of the moratoria authority to limit the entry of new providers or suppliers temporarily would be the most effective measure to combat fraud.” CMS says the impact on beneficiaries is a concern, as well.

Publicly, CMS has also stated that it is looking at the option, but has not made any indication that it will actually use it.

“We’re not very encouraged,” Dombi says. “It’s frustrating and confusing. If you’ve got the tool and it can help, why not use it? Particularly when the industry and representatives have said we are going to support it. It’s a strange thing.”

CMS has the authority to implement a moratorium at any time, and NAHC will continue in its efforts to support it, Dombi says.

“We never advanced a moratorium as one and only solution to all evils,” Dombi says. “We’re looking at it as one tool in the toolbox to prevent fraud.”

Written by Elizabeth Ecker