Home Health Moratoria

Section 6401 of the Affordable Care Act authorized the HHS Secretary to impose temporary moratoria on the enrollment of new Medicare, Medicaid, and CHIP providers and suppliers when necessary to prevent or combat fraud, waste, or abuse, implemented at 42 CFR 424.570. Moratoria are imposed in six-month increments and can be extended. While in effect, a moratorium blocks new enrollments of the targeted provider type in the designated area; agencies already enrolled continue operating and billing. Denial of an enrollment application because of a moratorium is not appealable on the merits, which made timing everything for would-be market entrants.

CMS first used the authority against home health in 2013, halting new agency enrollment in the Miami and Chicago metropolitan areas, both long-standing fraud hot spots identified with claims data analytics. In 2014 the moratoria expanded to additional metropolitan areas in Florida, Texas, Illinois, and Michigan, including Fort Lauderdale, Houston, Dallas, and Detroit. In 2016 CMS converted the home health moratoria to statewide bans in Florida, Illinois, Michigan, and Texas to stop providers from enrolling just outside the metro boundaries. CMS allowed the moratoria to lapse on January 30, 2019, reopening enrollment in all four states.

Rather than blanket bans, CMS now leans on targeted screening and oversight. Newly enrolling home health agencies sit in the high risk screening category, which brings fingerprint-based criminal background checks for major owners and site visits. CMS can also place new providers under a provisional period of enhanced oversight, with tools like prepayment claim review, and program integrity contractors (UPICs) target aberrant billing with data analytics. The policy bet is that precise screening catches bad actors that geography-based bans caught only crudely, while letting legitimate new providers into markets that need capacity.

Three practical legacies. First, market structure: for years the only way into Florida, Texas, Illinois, or Michigan was buying an existing agency, which inflated the value of certified agencies and CCNs in those states and left a deal-driven market culture that persists. Second, diligence: an agency's enrollment history, including whether it enrolled just before or after the moratoria, feeds directly into 36-month rule analysis in acquisitions. Third, precedent: the authority is intact, and a resurgence of concentrated fraud in any provider type could bring moratoria back with little notice.