Brad Reiner spent two years and more than $200,000 to get a home health agency up and running in the southern Florida community of Vero Beach.
He applied for Medicare reimbursement, knowing that many private insurers would soon follow what's considered the gold standard coverage.
But last month, all hopes for his new business truly flourishing came to an end after the CMS announced his business and a handful of other small business owners would not receive Medicare payment.
“You think you do everything right, you get approved you have a business set up and then this happens,” said Reiner.
The CMS has extended for six months and expanded statewide its ban on new home health agencies in Florida, Illinois, Michigan and Texas. The agency extended the ban, in place since 2013, because some providers were enrolling in counties outside a moratorium and then signing up patients who lived in the banned areas.
Reiner and others who were not involved in this activity say because they were far along in establishing their new agencies and had invested in property, staffing, accreditation and application costs, the CMS should grant them billing privileges.
A CMS spokesman said the agency is aware of the providers' concerns. He said refunds are available for application fees paid to the CMS and that the moratorium only applies to fee-for- service Medicare, and as such, it does not prevent a home health agency from caring for beneficiaries in Medicare Advantage plans.
All of the providers in question had pending applications at CMS and had received accreditation by the Community Health Accreditation Partner, a national home health certifying company.
Reiner says he believed he was mere days or weeks away from getting permission to bill Medicare. Upon announcing the expanded moratorium, CMS said applications that had been approved could join the program.
According to William Dombi, vice president of the National Association for Home Care & Hospice, the agency relayed that few providers with pending applications would be approved since they weren't far along in the process to meet CMS' approval. The agency said an applicant had to be at the stage where the only thing left to do in the approval process is have their name and number entered into its provider database, which is the final step to be able to bill Medicare. None of the applicants were that far along.
“Companies that were fully operational, approved as meeting the Medicare conditions of participation, and even given a Medicare provider number fall short,” Dombi said.
Gary Ganzie, who had been hoping to serve Medicare beneficiaries in Tampa, says the CMS has been unresponsive in hearing appeals. “At least let me present my case, but instead I'm treated like just a number,” he said.
Providers are worried they might fail to attract private payers without Medicare approval.
Others say they've invested more than just the start-up costs, which range from $150,000 to $350,000, according to Kenyon HomeCare Consulting an industry consulting firm.
Sean Oakley in Orlando said his company was told by Community Health Accreditation Partner that it could begin taking Medicare patients after it received accreditation in April and that his agency could back bill until they got reimbursement privileges from the CMS.
The company provided $100,000 worth of care for 21 Medicare beneficiaries but recently the CMS said he will not receive any reimbursement for the care already provided.
“These are services that people need,” said Mike Neuman, who was hoping to work with Medicare beneficiaries in Tampa. He worked for 15 months to get Medicare billing privileges and has spent more than $200,000 to prepare his facility.
Nationwide, about 11,400 home health agencies are caring for Medicare beneficiaries—down from 11,781 in 2014, according to the CMS.
Dombi said the dip in the number of Medicare home health agencies might be due to increasing consolidation within the industry or because agencies are having a difficult time coping with the reduced Medicare payments.
The home health industry has been facing increased federal regulation while also experiencing annual pay cuts from Medicare.
The Affordable Care Act mandated the reductions to address overpayments dating back to 2000.
The CMS cut payments by $260 million for 2016, $60 million for 2015 and $200 million for 2014 and has proposed to cut reimbursement by $180 million in 2017.
Patient advocates say all of these cuts, along with the expanded moratorium are affecting services.
“In the name of curbing fraud, (the CMS is) eroding access to necessary home healthcare for Medicare beneficiaries,” said Judith Stein, executive director for the Center for Medicare Advocacy.
