Many hospice providers are struggling to grow amid the U.S. Centers for Medicare & Medicaid Services’ (CMS) temporary moratoria on hospice and home health enrollment in Medicare. Now, they must prepare for what may come next, according to industry experts.
The six-month hospice and home health moratoria are set to expire Nov. 13. The national moratoria prohibit applications for new Medicare enrollment, and they apply to certain changes in majority ownership for hospices and home health agencies.
CMS stipulated that it would give at least 60 days’ notice prior to the moratoria’s expiration. To date, the agency has not provided information on whether the moratoria will be extended.
The moratoria have prevented many operators from expanding with de novos, according to Rachel Hold-Weiss, healthcare partner at Benesch Law. They have also disrupted acquisitions and affiliations.
Some new providers have been unable to open their doors.
“We have a lot of hospice clients whose business plans involved expansion, so either a new practice location, or certain acquisitions, and so, to a large extent, that’s put on hold,” Hold-Weiss told Hospice News. “Some of the smaller clients who were hoping to sell are now stuck — some people who wanted to retire, or people who are moving, or things like that. So, in deal sense, there’s been a definite shift.”
In addition, Medicare Administrative Contractors (MACs) are disregarding the dates on which enrollment applications were submitted and have denied them even if they were filed before the moratoria began, Hold-Weiss said.
Benesch is a national law firm that represents clients from a range of industries, including healthcare.
On the transaction front, the moratoria have created a lot of uncertainty, which can lead to market disruption, Lanchi Bombalier, partner in the healthcare practice at the national law firm Arnall Golden Gregory, said. Bombalier is also a member of the firm’s Hospitals & Health Systems, Post-Acute & Long-Term Care, Healthcare Privacy/HIPAA, and Healthcare Private Equity, and Change of Ownership teams.
“[The moratoria] has left a lot of uncertainty when it comes to transactions. There were a lot of providers that were committed to transactions but had not hit their filing deadline date, and obviously that that very much delayed that process,” Bombalier told Hospice News. “It certainly does chill the industry a little bit.”
These actions by CMS have also left providers uncertain about which avenues to growth remain available to them, Bombalier said.
If CMS were to extend the moratoria, then hospice growth could continue to slow. If the agency lets them expire, it could create a bottleneck as providers try to catch up and move forward with delayed plans, Hold-Weiss indicated.
In time, the market should normalize and certainty will return, according to Bombalier. However, providers in some regions could face further hurdles.
Multiple stakeholders have called on CMS to implement more targeted moratoria focused on markets in which fraud has been prevalent. State governments may also establish their own moratoria or other restrictions, Bombalier said.
“People would start trying to resume plans and resume growth, but certainly I think it’s going to be at a lower rate, because there’s certainly some state considerations now,” Bombalier said. “It’ll take a little bit of time for folks to get their footing to figure out what’s the next step.”
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