Medicare Ends Home Health Provider Moratorium

As of January 30, 2019, the moratorium on the enrollment of Illinois providers of home healthcare in Cook County officially ended. Accordingly, Medicare will be issuing new provider numbers now and into the future in the Chicagoland area. Such a development will now enable new owners and/or individuals to start a new home healthcare business and receive reimbursement through the Medicare program.

On July 30, 2012, Medicare provided for a moratorium that ceased any additional enrollments of home healthcare agencies in the Medicare program in the counties of Cook, DuPage, Kane, Lake, McHenry and Will in the Chicago area. In addition, there were also moratoriums in Broward and Monroe County in the state of Florida (the Miami area). The moratorium was designed to address the perceived imbalance in providers and patients in the impacted counties and was aimed at fighting fraud and protecting taxpayer money.

The lifting of the moratorium will have an impact on the Medicare home healthcare industry in the affected areas. During the moratorium, any party wishing to start a home healthcare business would have to acquire an existing agency. Such acquisitions presented many pitfalls including potential pre-closing liability issues that many buyers wish to avoid. With lifting the moratorium, individuals wishing to get into the business now have an alternative to acquiring an existing agency.

New individuals applying to become a provider will still have to comply with the regulatory and certification process (licensure with the state of Illinois and accreditation). That process creates delays which still may make the purchase of an existing agency attractive to individuals wishing to start a business sooner rather than later. In addition, the lifting of this moratorium does not impact the “36 month” rule, which restricts the transferability of a majority interest in a home healthcare agency within the issuance of its provider number.

Individuals who desire to start a home healthcare company that is a Medicare provider should consult with an attorney. There are many regulations that are applicable.

If you would like more information on this subject, please feel free to contact attorney Ted McGinn at Lavelle Law at 847-705-7555 or tmcginn@lavellelaw.com .