CMS Paused New Home Health Agencies — What Happens Next?

CMS has paused new home health and hospice Medicare applications nationwide — and if your senior living organization was planning to start, acquire, or expand a home health agency, this could change your timeline fast.

In this episode of Senior Living Executive Strategy, Melissa Brown sits down with Devin Kasey, Vice President of Home Health Operations at Gravity Consulting, to break down what the new CMS home health and hospice moratorium means, what providers should do right now, and why waiting until the moratorium lifts could put your organization months behind. 

If your organization needs help with home health strategy, startup planning, operations, reimbursement, or acquisition due diligence, visit Gravity Consulting here:
 https://gravityconsulting.com

In this episode, we cover:

• What the CMS home health and hospice moratorium means
 • Why the pause applies nationwide
 • What to do if you had not submitted your 855A before the deadline
 • Why state licensure and startup preparation should continue
 • How to prepare now so you can submit quickly when the moratorium lifts
 • What providers already in the queue should focus on next
 • How the moratorium affects home health mergers and acquisitions
 • Why accreditation may help providers move faster once applications reopen

For senior living leaders, this episode is especially important because home health is becoming a more strategic part of the senior living continuum. The moratorium may slow the Medicare application process, but it does not mean your organization should stop preparing.

Subscribe to Senior Living Executive Strategy for more conversations on senior living operations, home health, skilled nursing, reimbursement, growth, and executive strategy.

Learn more about Gravity Consulting:
 https://gravityconsulting.com

#SeniorLiving #HomeHealth #Hospice #CMS #SkilledNursing #HealthcareLeadership #HomeHealthStartup #SeniorLivingStrategy #GravityConsulting

Transcript

Senior Living Executive Strategy

CMS Home Health and Hospice Moratorium

Melissa Brown:
Welcome to Senior Living Executive Strategy with your host, Melissa Brown — for senior living leaders solving real senior living problems.

Hello, everyone. Welcome to the podcast.

Today, as you can see, we have updated our name to the Senior Living Executive Strategy Podcast. We’re really excited to bring this new approach. This has always been our goal and our target, and we hope the title of our podcast now aligns with your expectations and helps everyone who needs what we are offering find us more easily.

So we are looking forward to welcoming those who used to listen to the Gravity Healthcare Hacks podcast, as well as new people who may have found us along the way.

Today, I am excited to introduce Devin Kassi, our Vice President of Home Health Operations at Gravity Consulting. We are going to be talking today about the home health and hospice moratorium.

Welcome, Devin.

Devin Kassi:
Hello, Melissa. It’s always great to be here.

Melissa Brown:
We’re really glad to have you. I know our listeners are eager to hear about what this home health and hospice moratorium means for them.

Obviously, we are a senior living-focused podcast, but at the same time, we believe that most senior living organizations should be investing in home and community-based services, with home health being a very sensible one for a lot of senior living communities.

So I think there is great alignment here.

How do you see the alignment between home health and senior living today?

Devin Kassi:
It is really an intricate part.

As healthcare continues to move away from being siloed — with all of the different ancillary services separated from hospitals and skilled nursing facilities — we are all starting to work better together as a team.

We are truly focused on what is going to be the best service that our patients and families deserve, and where they truly need to be.

Melissa Brown:
Absolutely. I couldn’t agree more.

Well, in light of that, let’s talk about this hot topic: the home health and hospice moratorium.

We have a lot more expertise on the home health side, but really, a lot of what we are going to talk about today would apply if you’re considering hospice as well.

Can you, at a high level, walk our listeners through what this moratorium is and what it means for providers right now?

Devin Kassi:
Absolutely.

On May 13 of this year, CMS sent out a memo stating that they were no longer going to accept new home health or hospice agencies nationwide.

And I’m going to say that again: it is nationwide. Every state.

We weren’t exactly aware that this was going to happen, and I think a lot of providers out there were a little shocked that it went nationwide.

We are all very aware of the fraud that is being done, specifically in certain states, and this is the cause for why they are putting the moratorium in nationwide. They want to get the fraud under control and make sure that people are actually receiving services, and that it is not fraudulent.

Unfortunately, the majority of people out there are trying to do the right thing. Senior living companies, home health, hospice, home care — everybody is trying to do the right thing.

But right now, CMS feels that this is something necessary that they need to do to get the fraud under control.

At this point, what that means is if you were looking to open a new home health agency or hospice agency and you did not submit your 855A into CMS as of May 13 of this year, they are no longer accepting applications for six months.

That is the current time frame for it. They did state that this could be extended, but right now, the current time frame is six months.

Melissa Brown:
With this current administration, we’ve often said it is almost like the Wild West. A lot of the typical things we would have expected with previous administrations — they tended to follow certain protocols or standards.

Who knows what will happen with this moratorium?

I don’t believe it will get extended beyond six months because I don’t really think there is good evidence that there is widespread fraud across the nation. I think the fraud is in certain geographical areas. I think there are a handful of bad actors that have really manipulated the system, and honestly, it should have been caught a long time ago.

I’m rather disappointed, quite frankly, that Medicare did this. I don’t think it was necessary. I don’t think it was the right move.

But nonetheless, I think as they examine some other states, they’ll realize this was really focused in a few key geographical areas, and I think it will open back up again in six months.

What is your instinct on it, Devin?

Devin Kassi:
I’m confident as well.

Everything we’ve been able to review, and in talking with the accreditation organizations, we’re confident that they can get this under control in those focus areas and allow the rest of the country to reopen so providers can deliver services to people who deserve them.

Melissa Brown:
Absolutely.

I think we’ve been getting a lot of questions from clients and potential clients about what to do right now.

What would you recommend to somebody who wanted to start a home health agency? Maybe it has been on their bucket list or something they’ve been thinking about for the last couple of years, and May or June of this year was when they were going to start getting things going.

What would be your suggestion to them?

Devin Kassi:
If you are really serious about opening a home health agency, and you have the funds to support it, our recommendation is to continue to move forward.

We are also hearing this from the accreditation organizations as well: continue to move forward with your state licensure. Begin the process. Obtain that state licensure and start to see your pro bono patients.

By the time all of this goes through, we are confident that within that six-month time frame, we will start to be able to submit that 855A.

Another strategy while you are doing this is not just to focus on the licensure, but to also ensure that the 855A is ready to go. Make sure you have every single aspect of the information that will need to be submitted to CMS ready.

That way, the day the moratorium ends, you can submit it and get in line. There are going to be a lot of companies out there that are ready to submit and open home health agencies, as well as hospice agencies.

Melissa Brown:
The biggest delay for getting your number and getting approval from Medicare is whoever is in queue in front of you.

I agree with you, Devin. I think the very day they lift the moratorium, if you’re not submitting your application that day — if you’re waiting until the next day, or a week or two later — you’re probably adding three to six months of cost to your organization.

There’s going to be a glut of people doing this all at the same time.

Lots of people are going to say, “Oh, it’s a couple days. It doesn’t matter.”

That could be two or three months to your bottom line at the end of the year. And we know very well from helping home health agency startups that time is absolutely money. Those months matter.

So I completely agree with you, Devin. It’s going to be all about being 100% prepared so that the second the moratorium ends, you’re able to put in your application.

Let’s shift gears and talk about those who might have just submitted their 855A. Maybe they were lucky enough to get it in before the May 13 deadline.

What’s your advice to them? What do you think they should do right now?

Devin Kassi:
Continue with the process.

As soon as you receive your state licensure, go ahead and start seeing those pro bono patients.

When you make it through a survey and receive your CMS provider number, go ahead and move forward with the process of setting up your billing, admitting patients, and starting those insurance carrier relationships.

You want to make sure you are also going to partner with Medicare Advantage plans and other commercial payers to ensure you will have enough referrals to support your home health agency.

Melissa Brown:
Definitely.

I think it is actually possible that the moratorium might help people who are already in the queue. If you got your 855A in ahead of time, you may have a faster-than-usual process because they are not going to be processing new surveys for the next six months, other than people who are already in.

Hopefully for you, that is a positive and gives you an advantage.

One of the other things to think about is mergers and acquisitions.

A lot of times, people consider M&A as a solution to either expand their business or get a home health agency off the ground.

One of the things to be really cognizant of is that if the home health agency has been around for less than three years, they cannot sell you that license without you having to go through the whole process of getting a new Medicare number.

So if you are looking to do a merger or acquisition during the home health moratorium, you have a couple of things to consider.

The safe bet is to go with someone that has been around for longer than three years. In that case, you are able to purchase them and transfer their Medicare number over to your agency, attribute it to your agency, and bring all their managed care payer contracts over.

That is really the safest, best option.

Having said that, those are going to be the only ones that everyone else is buying right now, so that could potentially escalate their prices.

If you are looking for a potential cost-effective strategy, you could use the current moratorium as a negotiating tactic to get the price down on an agency that is less than three years old.

But understand that you are taking on a lot of risk because we don’t know what will happen. The moratorium could get extended. As a result of whatever fraud CMS finds, they may restrict the typical use of CHOWs that we have seen in the past.

There is just potential risk.

So there is risk and reward either way, but those are things to be thinking about.

Anything else that you would advise in line with that, Devin?

Devin Kassi:
I would advise that you continue the path you are on.

The only thing, at this current point in time with the moratorium, that you cannot do is submit the 855A.

I cannot say this enough: continue with the state licensure process.

Continue setting up the home health agency. Create your team. Get your clinicians in place. Ensure that your EMR system is set up correctly. Make sure you have all of your policies and procedures, and that all of your meetings are in place.

Then, the moment you receive that state licensure, you can go ahead and start seeing your pro bono patients and moving forward.

By the time you have all of that in place, there is a good possibility that the moratorium will be lifted.

Also, please stay in touch with your accreditation organizations. They are going to be there to help guide you through this.

If you are seeking accreditation, continue to have conversations with them and stay up to date with anything that is going on in the accreditation organizations to assist you in this process.

That way, they know that as soon as this opens up, you are going to submit that 855A. Once you receive your approval, they can come in and do your survey.

Continue to have your ducks in a row.

I truly believe this will not last extremely long. We don’t necessarily know, but from everything we are reading and hearing about the fraud, I do believe there will be locations that are not in the fraudulent areas that will open up.

Melissa Brown:
Yes. You bring up a great point there, Devin, about accreditation.

When we’re talking about accreditation, we’re talking about organizations like CHAP or ACHC. They are nationally recognized groups that are approved by Medicare to actually do your survey for you.

I think the moratorium makes those a very good solution right now because while you are still going to have to submit your 855A and it is going to have to get approved before they can do their survey, they are probably going to be able to get to you a lot faster than the state survey agencies when this moratorium lifts.

So yes, it is an investment. It is usually around $10,000 or somewhere in that vicinity.

But time is money again.

If you can get your survey one month sooner, that investment is absolutely worth it. There are extra things you have to do to maintain the accreditation and to get it, but usually it is really worth it when you’re doing a startup.

So I think that is one thing to think about during this transition.

Anything you would add to that, Devin?

Devin Kassi:
I think utilizing an accreditation organization is a good way to go.

They really want to be there as a good resource for you. They are going to help you get through the process, guide you, work through the survey, and help with anything that comes up.

They are always going to be there to support you. It is well worth the investment to move forward with accreditation.

Melissa Brown:
I agree with you, Devin. I think it makes a lot of sense.

Thank you so much for joining us today. I appreciate you being on the podcast.

If you’re listening today and you need help deciding what you should do at this point based on the moratorium, how you should move forward, or if you just need help with your home health agency, please feel free to reach out to us.

You can always find us on LinkedIn, and of course, our information is in the show notes as well.

Thanks for listening today. If you enjoyed today’s podcast, don’t forget to subscribe.

Remember, it’s not just what you know, but how you apply it that makes all the difference.

See you next time.

Outro:
Senior Living Executive Strategy is brought to you by Gravity Consulting, an outcomes-focused consulting firm for senior living, skilled nursing, and home health organizations.

If something in today’s conversation connects to a challenge you’re facing, or if your organization has an operational, clinical, reimbursement, or growth issue that needs to be solved, visit GravityConsulting.com to learn how Gravity can help.