President Clinton last week called for an immediate six-month moratorium on Medicare certification of new home health agencies and a series of other anti-fraud measures aimed at unscrupulous home-care providers.
But there are questions about the legality of the moratorium and the authority of HCFA to implement the change without congressional action.
The moves are the latest in a series of actions to combat Medicare billing fraud by home-care operators (See story below).
In a speech to members of the Service Employees International Union in Washington, Clinton said the new actions are designed to "keep fly-by-night providers out" of the Medicare program.
Clinton administration officials, however, released few specifics on how the moratorium will work.
White House healthcare adviser Chris Jennings said home-care agencies that have nearly completed their federal certification reviews still will be certified and exceptions might be made in areas where home care is not available.
The other anti-fraud measures Clinton announced include doubling the number of annual HCFA audits of home-care agencies to 1,800 and a requirement that all home health agencies disclose related, owned businesses.
There were almost 10,000 Medicare-certified home-care providers at the beginning of 1997, according to the General Accounting Office. The GAO estimates Medicare will spend about $18 billion on home care this fiscal year, up from $2.7 billion in 1989, of its nearly $200 billion annual budget.
According to the Congressional Budget Office, Medicare spending on home-care services will grow to more than $20 billion by 2000.
Home-care representatives were critical of the increase in the number of audits but gave the moratorium on new agencies a conditional thumbs-up.
It's possible the moratorium will apply only to new home-care agencies, not to new branches of existing agencies. That would help shield existing agencies from new competition and make it easier for them to expand into new markets.
The National Association for Home Care, which proposed a similar moratorium to the White House two years ago, issued a statement last week supporting the effort.
Home-care representatives also questioned whether the moratorium would withstand a legal challenge because HCFA did not move the change through the usual regulatory process.
"(HCFA's) position is fairly weak since this was done by way of administrative proclamation," said William Dombi, spokesman for the National Association For Home Care. Dombi said the NAHC would wait for details of the changes before making a decision on legal action.