The last time a moratorium on Medicare care licenses was enacted, the moratorium on home healthcare licenses lasted for five years before finally lifting in 2019. When a moratorium is in place, no new licenses will be granted to the healthcare types in question, which means starting a new hospice or home healthcare business could seem impossible. With rumors of a new moratorium on the horizon—this time for hospice care—you may want to start making plans now if you hope to start a new hospice business in 2023.
Why Do Moratoria on Hospice Licenses Occur?
According to the Medicare website, the Secretary of Health and Human Services occasionally restricts enrollments in an effort to stem Medicare fraud or other types of abuse. When potential fraud is detected, every effort is made to curb the activities, up to and including the moratorium on licenses.
These moratoria rarely happen for a state as a whole. Instead, the area where fraud is suspected is targeted. However, with no previous knowledge of where the fraud may be occurring and where the licenses will soon be restricted, many who are planning to start a hospice or home health company in the near future find themselves unable to move forward with their business plans.
Why Might A Moratorium Happen in Texas?
Recent allegations have been made regarding Medicare hospice benefits, particularly in California. However, Texas is on the list of states where additional fraud is suspected. In Las Vegas, as this letter explains, 110 certified hospices share one address. In Houston, twelve hospices are registered to one location.
These are big red flags that fraud may be at play. When one instance of fraud is rooted out and the perpetrators punished, they often register for a new license with a new business name and continue the practice unchecked. This is why a moratorium is enacted—to cut off the flow of licenses to those fraudulent entities until all can be discovered, investigated, and punished.
The bad news, as previously mentioned, is that legitimate hospice companies struggle to obtain licenses in areas under moratorium until the restrictions are lifted.
What to Do If Restrictions Are Announced in Texas
You’re not completely out of options if a moratorium on hospice licenses is announced in Texas. While obtaining new licenses won’t be possible, you may be able to purchase an existing license that is no longer in use for whatever reason.
If you do decide to purchase an existing license, there are a few things you’ll need to keep in mind. First, they could cost up to three times as much as a new license, simply because they will be in demand. Second, the history of the license remains with the license number—not the entity that previously held the license. In other words, you could inherit a license with a history of fraud, which could then reflect on your new hospice agency.
If you’re interested in starting a new hospice agency in 2023 and would like some help navigating the process, we can help. And, if the rumored moratorium is announced in Texas this year, we can be a resource to guide you at that time, too. Just reach out and we’ll be here for you.
