The Centers for Medicare & Medicaid Services issued a final rule expanding authority to deny or revoke Medicare billing privileges based on misconduct by a provider's parent company or owners. targeting private equity expansion in home health and hospice care, the policy requires mandatory re-enrollment following majority ownership changes to eliminate statutory blind spots. Regulators project $82 million in annual taxpayer savings while simultaneously granting home health agencies a $415 million payment increase.
Medicare billing privileges tied to owner conduct
- ▪The Centers for Medicare & Medicaid Services released a final rule that allows the agency to deny or revoke Medicare billing privileges based on violations by a provider's parent company or owners
- ▪The Centers for Medicare & Medicaid Services estimated that expanding Medicare revocation authority to include owner conduct will hold bad providers accountable and save taxpayers $82 million annually
Medicare enforcement rules
- ▪Under the 2027 Home Health Prospective Payment System final rule, the Centers for Medicare & Medicaid Services can revoke Medicare enrollment if a provider's owners have had their license suspended in another state
- ▪Under the 2027 Home Health Prospective Payment System final rule, enforcement actions taken against healthcare providers will apply retroactively to the date CMS or its contractors notify providers of noncompliance
Payment rate adjustments for providers
- ▪Under a July final rule, hospice providers received a 2.3% rate increase yielding $755 million in additional funding
- ▪Under the 2027 Home Health Prospective Payment System final rule, home health agencies will receive a 2.4% payment increase next year, totaling $415 million
Concerns over private equity ownership in healthcare
- ▪The Trump administration cited minimal operational oversight, patient exploitation, and rapid private equity growth as reasons why home health, hospice, and medical equipment providers pose high payment integrity risks
- ▪Federal regulators reported that statutory blind spots previously limited their ability to identify and stop healthcare fraud during the acceleration of ownership changes over the past decade
- ▪Increasing private equity ownership in healthcare has drawn scrutiny from federal and state enforcers who argue profit-seeking missions incentivize fraud, waste, and abuse
CMS fraud prevention strategy
- ▪The Centers for Medicare & Medicaid Services promised to investigate more providers using advanced analytics of enrollment data and fraud indicators
- ▪Prior to the final rule, CMS enacted a six-month pause on new Medicare enrollments for home health and hospice providers as part of its fraud prevention strategy
- ▪The CMS rule introduced the Service and Spending Variation Index to detect hospice fraud by tracking spending on services unrelated to end-of-life care
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