The CY2024 Home Health Proposed Rule included a number of actions related to hospice including an outline of expectations for the Special Focus Program. In addition to the introduction of the Special Focus Program for hospices, the Centers for Medicare and Medicaid Services (CMS) include a number of other integrity actions. This article reviews those actions in more detail and how they will impact hospice providers.

Hospice Specific Provisions in the Home Health Rule

Categorical Risk Screening:  Hospices are currently in the moderate-risk screening category under Section 424.518. However, given growing program integrity concerns in the hospice area, CMS is proposing to move initially enrolling hospices and those submitting applications reporting new owners into the “high risk” level of categorical screening. Revalidating hospices would be subject to moderate risk-level screening.

• Under “high risk” screening providers must undergo all requirements for “moderate” risk providers (including various screenings and verifications as well as a site visit) and are subject to the following additional requirements:
  • Required to submit to the Medicare Administrative Contractor (MAC) a set of fingerprints for a national background check from all individuals with a 5% or greater direct or indirect ownership interest in the provider or supplier.
  • Conduct fingerprint-based criminal history record check of the Federal Bureau of Investigation’s Integrated Automated Fingerprint Identification System on these 5% or greater owners.

36-Month Rule: CMS is proposing to extend to hospice providers existing requirements under which the provider agreement and Medicare billing privileges do not convey when a hospice is undergoing a change in majority ownership (CIMO) by sale within 36 months after the effective date of the hospice’s  initial enrollment or within 36 months after the hospice’s most recent CIMO. In such cases the prospective provider/owner must:

• Enroll in Medicare as a new (initial) hospice, and
• Obtain a state survey or an accreditation from an approved accreditation organization.

A CIMO occurs when an individual or organization acquires more than a 50% direct ownership interest in a hospice during the 36 months following the hospice’s initial enrollment or most recent CIMO:

• This includes an acquisition of majority ownership through the cumulative effect of asset sales, stock transfers, consolidations, or mergers.
• If the 50% ownership threshold is crossed relative to ownership transfer, the 36-month rule is triggered.

This requirement is designed to address circumstances when a Medicare provider certification is sought for the sole purpose of selling the certification rather than providing services to beneficiaries. The policy also helps to ensure that when a provider changes ownership that CMS has knowledge as to whether the entity, under new management and ownership, meets the Medicare conditions of participation.

This proposed rule is consistent with requirements for Home Health Agencies (HHAs). CMS notes that there are several circumstances under which the 36-month rule currently in place for HHA does not apply. These exceptions are specified below and would be applicable to hospices as well:

• The hospice submitted two consecutive years of full cost reports since initial enrollment or the last CIMO, whichever is later;
• A hospice’s parent company is undergoing an internal corporate restructuring, such as a merger or consolidation;
• The owners of an existing hospice are changing the hospice’s existing business structure (for example, from a corporation to a partnership (general or limited), and the owners remain the same; or
• An individual owner of a hospice dies.

Definition of “Managing Employee”: Providers and suppliers are required to report their managing employees via the Medicare enrollment application to enroll in Medicare. Section 424.502 currently defines “managing employee” as follows: “general manager, business manager, administrator, director, or other individual that exercises operational or managerial control over, or who directly or indirectly conducts the day-to-day operation of the provider or supplier (either under contract or through some other arrangement), whether or not the individual is a W­2 employee of the provider or supplier.”

In 2023, CMS proposed a modification to the definition of managing employee for Skilled Nursing Facilities (SNFs) such that the term also includes a general manager, business manager, administrator, director, or consultant, who directly or indirectly manages, advises, or supervises any element of the practices, finances, or operations of the facility. CMS is now proposing to further revise the definition to include the following: “For purposes of this definition, this includes, but is not limited to, a hospice or skilled nursing facility administrator and a hospice or skilled nursing facility medical director.”

CMS underscores in the rule that any individual who meets the definition of managing employee must be reported regardless of the precise amount of managing control the person has.

Program Integrity Provisions Impacting All Providers in the Home Health Rule

In addition to the hospice specific program integrity proposals offered in the CY2024 Home Health Proposed Rule, CMS includes additional provisions impacting all Medicare providers and suppliers including hospices.

Provisional Period of Enhanced Oversight: The Secretary of the Department of Health and Human Services (HHS) has authority to provide for a provisional period of between 30 days and one year during which new providers and suppliers would be subject to enhanced oversight (so-called Provisional Period of Enhanced Oversight, or PPEO).

This oversight can include prepayment review and payment caps, among other actions. CMS previously implemented a PPEO through sub-regulatory means for “new” HHAs such that their Requests for Anticipated Payments (RAPs) were suppressed (not paid) for a period of between 30 days and one year.

In the rule CMS is proposing regulations under which a “new” provider would be defined as any of the following:

• A newly-enrolling Medicare provider or supplier—this includes providers that must enroll as a new provider in accordance with the change in majority ownership provisions in Section 424.550(b).
• A certified provider or certified supplier undergoing a change of ownership consistent with the principles of 42 CFR 489.18 (including providers that qualify under Section 424.550(b)(2) for an exception from the change in majority ownership requirements in Section 424.550(b)(1) but which are undergoing a change of ownership under 42 CFR 489.18).
• A provider or supplier (including an HHA or hospice) undergoing a 100% change of ownership via change of information request under Section 424.516.

Secondly, CMS is proposing that the effective date of the PPEO’s commencement is the date on which the new provider or supplier submits its first claim (rather than, for example, the date the first service was performed or the effective date of the ownership change). CMS has chosen this approach so that a provider or supplier is unable to avoid the PPEO by delaying billing until the PPEO’s expiration—which happened during the PPEO instituted for HHAs previously.

• These proposed changes to the PPEO are part of the home health proposed payment rule with comments due August 29, so if finalized as proposed would go into effect in the fall. CMS used its existing PPEO authority and announced that all newly enrolled hospice providers in California, Nevada, Arizona, and Texas will be subject to an enhanced oversight process effective July 13, 2023. This initiative will include providers who started enrollment prior to July 13, 2023, but have not yet received their final approval letter from CMS and will not be retroactive.
• CMS told LeadingAge and other stakeholders that this authority allows them to use a targeted approach that a moratorium might not have. LeadingAge followed up with CMS with further questions about how they can expand this enhanced oversight to new problem areas (or removes the PPEO from the states in question).

Retroactive Provider Agreement Termination: Under current policy, a provider may voluntarily terminate its provider agreement with Medicare and may do so on a retroactive basis. CMS is proposing to incorporate into regulation that a provider may request a retroactive termination date, but only if no Medicare beneficiary received services from the facility on or after the requested termination date.

Deactivation for 12 Months of Non-Billing:  Currently CMS has a policy in place under which it has the authority to deactivate Medicare billing privileges for several reasons. Such billing privileges can be reactivated upon submission of required information. CMS has growing concerns about schemes under which providers hold multiple billing numbers so they can move between provider numbers. For example, one provider number may be subject to an overpayment or investigation, a different (dormant) provider number may be used to continue to bill services.

To combat these schemes, CMS is proposing to revise its requirements at Section 424.540(a)(1) that currently allow for deactivation of a provider number after 12 months if no billings have been submitted; the proposed new time period is six months, after which CMS could deactivate billing privileges.

Previously Waived Fingerprinting of High-Risk Providers and Suppliers: During the COVID-19 Public Health Emergency (PHE), CMS temporarily waived the requirement for fingerprint-based criminal background checks (FBCBCs) for 5% or greater owners of newly enrolling providers and suppliers in the high risk screening category. CMS now plans to perform FBCBCs for high risk providers and suppliers that initially enrolled during the PHE upon their revalidation once the PHE ends.

CMS is proposing regulatory language that would provide authority to conduct these FBCBCs despite the waivers. CMS is also proposing to modify existing regulatory language related to providers and suppliers at the moderate-risk level and clarify that certain high-risk providers revert to the moderate risk level once they have undergone FBCBCs when they enrolled initially or upon revalidation.

Provisions Related to Reapplication Bar in the Home Heath Rule

Expansion of Reapplication Bar: CMS is authorized to prohibit a prospective provider or supplier from enrolling in Medicare for up to three years if its enrollment application is denied because the provider or supplier submitted false or misleading information on or with (or omitted information from) its application in order to enroll. CMS is proposing to expand the maximum length of reapplication bar from the current three years to 10 years.

Ordering, Referring, Certifying, and Prescribing Restrictions: CMS is proposing that any provider or supplier currently subject to a reapplication bar may not order, refer, certify, or prescribe Medicare-covered services, items, or drugs. Further, CMS is proposing a prohibition on Medicare payment for any otherwise covered service, item, or drug that is ordered, referred, certified, or prescribed by a provider or supplier that is currently under a reapplication bar.

CMS is also proposing that a physician or other eligible professional who had a felony conviction within the previous 10 years, that CMS determines is detrimental to the best interests of the Medicare program and its beneficiaries, may not order, refer, certify, or prescribe Medicare-covered services, items, or drugs. Further, CMS is proposing a prohibition on Medicare payment for any otherwise covered service, item, or drug that is ordered, referred, certified, or prescribed by a physician or other eligible professional who had a felony conviction within the previous 10 years that CMS determines is detrimental to the best interests of the Medicare program and its beneficiaries. These provisions would apply regardless of whether the provider or supplier has opted out of Medicare.