On August 16, 2018, CMS announced that it is expanding the waiver application standards for new home health agency (HHA) and non-emergency ambulance suppliers in six states with a moratorium on Medicare enrollment. Providers in Florida, Michigan, Texas, Illinois, Pennsylvania, and New Jersey now have an additional avenue to enroll through a waiver of the moratorium in exchange for heightened scrutiny. The revised waiver demonstration is scheduled to be published in the Federal Register on August 20, 2018, but the pre-publication version is available here.

Background on Statewide Moratoria

On August 16, 2018, CMS announced revisions to the Provider Enrollment Moratoria Access Waiver Demonstration (PEWD) for Part B non-emergency ground ambulance suppliers and HHAs. The original PEWD went into effect on July 29, 2016, to allow for need-based waivers to the moratoria that could ameliorate access to care issues.

CMS views HHAs and ambulance suppliers in certain areas as “high risk” to the Medicare program, and it implemented statewide moratoria to control that environment.

However, CMS has encountered significant HHA and ambulance supplier operational challenges since extending its moratoria on new provider and supplier enrollees in six states in 2016. For example, CMS found that existing provider and supplier enrollees were moving branch operations into the moratorium areas. CMS was also unable to prevent existing providers outside the moratoria areas from servicing beneficiaries within the areas. The 21st Century Cures Act (Cures Act) helped address the sort of circumvention frustrating CMS’s goals by prohibiting payments to new provider and supplier enrollees subject to the moratoria for items and services furnished in moratoria areas. Although the moratoria will continue, CMS announced this revised demonstration to waive certain requirements of the Cures Act for providers and suppliers enrolled through the demonstration process, opening the door for new provider and supplier enrollees to operate in moratoria areas with certain strings attached.

New Avenues, Criteria for Waiver and Enrollment

With the revised PEWD, CMS announced expanded avenues to grant waivers to statewide Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) enrollment moratoria on “a case-by-case basis.”  According to CMS, the revision responds to “access to care issues and previously denied enrollment applications because of statewide moratoria implementation” while subjecting providers and suppliers seeking waivers to “heightened screening, oversight, and investigations.”

In its revised demonstration, CMS is specifically opening up two avenues for waiver eligibility:

1. The provider or supplier demonstrates that access to care issues exist (the previously existing option); or
2. The provider or supplier establishes that it submitted an enrollment application prior to implementation of the July 29, 2016 moratorium that was denied by a MAC because of implementation of the moratorium (the new, alternative option).

Under either avenue, the application will be subject to the heightened screening, oversight, and restrictions of the revised demonstration, which are discussed further below.

Applications Based on Access to Care. For waiver applications based on access to care issues, CMS will analyze the following:

• provider and supplier saturation in the geographic area;
• provider or supplier to beneficiary ratios;
• claims data; and
• any other access to care information that the provider or supplier provides.

Indeed, providers or suppliers applying under the access to care criteria are required to submit “detailed access to care information,” like saturation data, for the counties at issue. CMS also expects anecdotal data to accompany the application.

Applications Based on Prior Denial.  For waiver applications based on previously denied applications due to the moratoria implementation, CMS will review just one criterion:  a verification of the prior denial. Providers and suppliers whose applications are recommended for enrollment will then be forwarded on to the MAC for further processing.

Scope of Provider/Supplier Operations after Waiver Application Approval

In areas where access to care is at issue, approved providers and suppliers will be assigned a specific need-based geographic region (likely a county) within which to operate. The operation area can be expanded as needed.

For providers and suppliers previously denied due to the moratoria, their approved operation areas will be the service locations that they include in their enrollment application accompanying the waiver application.

CMS plans to convert any enrollments occurring as part of this demonstration process to standard enrollments without the geographical billing restrictions when the revised demonstration ends.

Heightened Scrutiny with PEWD Participation

CMS issued its revised PEWD for the statewide moratoria to address access to care issues while targeting fraud, waste, and abuse. CMS specifically noted in its announcement that the “success” of the revised demonstration “is contingent upon an increase in oversight and enforcement in all six current moratoria States.”  Thus, providers in Florida, Michigan, Texas, Illinois, Pennsylvania, and New Jersey should expect a higher level of scrutiny as CMS enters a “more robust evaluation” of operations in these geographic areas.

In exchange for the waiver-based enrollment, CMS will subject providers and suppliers to augmented investigation and monitoring to ensure compliance with Medicare requirements, particularly within 30 to 60 days of enrollment. Specifically, CMS expects to increase its:

• license verifications;
• background checks;
• fingerprinting;
• comprehensive site visits;
• ownership interest verifications; and
• evaluations of past behavior in other public programs.

CMS may also place restrictions on activity in the provider or supplier’s service area to alleviate oversaturation.

Duration of Revised PEWD

CMS began the original PEWD on July 29, 2016, and planned to continue it for three years, or until the moratoria were lifted, whichever occurred first; however, CMS announced that it needs more time to collect data and judge the program’s efficacy. CMS is therefore extending the PEWD by two years, or through July 28, 2021. Of course, CMS may lift the moratoria at any time if its concerns are abated or other safeguards are implemented.

The extended demonstration will offer CMS the opportunity to observe the moratoria and heightened application review to understand which parts of the process to implement permanently (if any) when the demonstration concludes.

CMS noted that it will continue to assess the need for its moratoria by reviewing factors such as access to care, provider and supplier growth rates, the ratio of providers and suppliers to beneficiaries, claims paid per beneficiary, enforcement actions, and the churn rate (providers and suppliers entering and exiting the program) in moratoria states.