After a six-month freeze, HCFA will lift the moratorium on Medicare certification of new home health agencies in February, but only after it implements new rules requiring agencies to undergo outside audits and other conditions of participation.
Beginning Jan. 1, all home health agencies will be required to post a surety bond of the greater of $50,000 or 15% of their Medicare revenues under a new rule expected as early as next week. A separate bond will be required for Medicaid.
And newly Medicare-certified home health agencies will also face revised capitalization requirements. That regulation also is due by Jan. 1.
The new capitalization rules are an attempt by HCFA to weed out fraudulent agencies that enter the market without sufficient resources to provide care.
Despite the announcement, representatives of the home-care industry said there is confusion as to when the moratorium will be lifted.
Bill Dombi, vice president for law at the National Association for Home Care, said HCFA Administrator Nancy-Ann Min DeParle told the group that the moratorium would be lifted in February but that other HCFA officials said the moratorium would be lifted in January.
President Clinton announced the moratorium in September as an emergency measure designed to stem the flood of new home health agencies seeking federal approval to accept Medicare patients.
It was also designed to buy the agency time to implement new controls over the industry. A federal review of home health payments in four states earlier this year found that as many as 40% of all claims were improperly paid by HCFA.
At a congressional hearing held by Democratic leaders last week, HHS Inspector General June Gibbs Brown said that in the past decade the number of audits of Medicare home health disbursements has dropped from 60% of all home health claims to only 2%.
DeParle, in an interview with reporters last week, said HCFA intends to double the number of audits performed on home health payments next year.
According to DeParle, besides being responsible for surety bonds, home-care agencies will also be required to have an outside financial audit every three years. Each home-care agency will have to pay for its own audit. Agencies will also be required to reapply for certification in the Medicare program every three years.
Dombi said the NAHC will continue to seek congressional support to end the moratorium before February.