Medicare's Freeze on New Hospice and Home Health Agencies Nears Nov. 13 Deadline

According to Hospice News, the Centers for Medicare & Medicaid Services (CMS) put temporary moratoria in place that bar applications for new Medicare enrollment. They also apply to certain changes in majority ownership at hospices and home health agencies. The agency said it would give at least 60 days' notice before the moratoria expire. Counting back 60 days from Nov. 13 lands in mid-September. As of Hospice News's Oct. 14 report, CMS had not said whether it would extend them.

The effects are already visible in how companies grow. Rachel Hold-Weiss, a healthcare partner at the law firm Benesch, told Hospice News that the moratoria have kept many operators from expanding through de novos, meaning brand-new agencies. They have also disrupted acquisitions and affiliations. Some new providers have been unable to open.

"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 said. She added that some smaller owners who hoped to sell, including some who wanted to retire or move, are now stuck. In her words, there has been "a definite shift" in deal activity.

Hold-Weiss also said Medicare Administrative Contractors, which process enrollment paperwork, are disregarding the dates on which applications were submitted. According to her, they have denied applications even when they were filed before the moratoria began.

Lanchi Bombalier, a partner at the law firm Arnall Golden Gregory, described the same uncertainty from the deal side. Many providers were committed to transactions but had not reached their filing deadline, she said, which delayed the process. "It certainly does chill the industry a little bit," she told Hospice News. She said providers are also unsure which paths to growth remain open.

The two outcomes point in different directions, according to the experts quoted. If CMS extends the moratoria, hospice growth could slow further. If it lets them lapse, Hold-Weiss indicated, providers with delayed plans could all move at once and create a bottleneck.

Even a lapse may not return the market to where it was. Bombalier told Hospice News that the market should normalize and certainty should return over time. But she said providers in some regions could face further hurdles. Multiple stakeholders have urged CMS to adopt more targeted moratoria focused on markets where fraud has been prevalent. State governments may also set their own moratoria or other restrictions.

Bombalier expects growth to resume at a lower rate because of those state considerations. "It'll take a little bit of time for folks to get their footing to figure out what's the next step," she said.

For operators and investors, the practical point is that planning now depends on a decision that has not been made. The pace of deals and new openings in this sector will turn on it.

What to watch next

Whether CMS announces an extension, an expiration, or a narrower marketby-market approach before Nov. 13, and whether individual states move to set their own limits.

Canada's Labour Participation Falls to Lowest Since 1997 as Population Ages Medicare's Freeze on New Hospice and Home Health Agencies Nears Nov. 13 Deadline Malaysian Pension Fund KWAP Weighs Investments in Elder Care and Ageing Technology Mark Wahlberg's Municipal Gym Pitches Longevity Testing at Gym Prices Aging Tradespeople and Immigration Enforcement Strain US Skilled Labor Supply