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CMS imposes first Affordable Care Act enrollment moratorium on Chicago-area home health agencies to combat fraud and safeguard taxpayer dollars

CMS imposes first Affordable Care Act enrollment moratorium on Chicago-area home health agencies to combat fraud and safeguard taxpayer dollars
For Immediate Release
Friday, July 26, 2013

CMS imposes first Affordable Care Act enrollment moratorium on Chicago-area home health agencies to combat fraud and safeguard taxpayer dollars

Moratorium targets high-fraud area while ensuring patient access to care 


The Centers for Medicare & Medicaid Services (CMS) today issued a notice in the Federal Register announcing the first temporary enrollment moratorium under the Affordable Care Act to fight fraud in Medicare, Medicaid and the Children’s Health Insurance Program (CHIP). The moratorium will temporarily halt the enrollment of new home health providers in the metropolitan area of Chicago for six months.

CMS carefully examined Medicare beneficiary access to home health services in Chicago and concluded that the moratorium will not affect access to care. The agency also worked closely with the state Medicaid Agency in Illinois to evaluate patient access to care, and the State reported that Medicaid and CHIP beneficiaries will continue to have access to services. Throughout the moratorium, CMS will monitor access to care to ensure Medicare, Medicaid, and CHIP beneficiaries are receiving the services they need.


Beginning July 30, 2013 CMS and Illinois officials will deny all new or pending applications for Medicare, Medicaid and CHIP enrollment from home health providers with practice locations in Cook, DuPage, Kane, Lake, McHenry and Will counties in Illinois. Applications that have been received from these affected providers prior to the moratorium announcement will be denied and returned (along with fees, if applicable). Any provider that has already received an approval letter from the CMS contractor will not be affected.

The moratorium will be in place for six months and may be extended or lifted if circumstances warranting the moratorium continue or are resolved. CMS will publish a notice in the Federal Register if the moratorium is to be extended. During the moratorium, CMS will closely monitor home health billing for suspicious activity to root out fraud.

The moratorium does not apply to changes in practice location; changes in provider or supplier information such as phone number or addresses; or changes in ownership (except changes in ownership of home health agencies that would require an initial enrollment under 42 CFR 424.550).


Based on data analysis and agency experience, including its work with the HHS Office of Inspector General (OIG) and Department of Justice (DOJ) in the Health Care Fraud Prevention & Enforcement (HEAT) Strike Force cities, CMS reported a moratorium is needed to combat fraud, waste and abuse of home health services in Chicago. HEAT is a joint initiative between the Department of Justice and the Department of Health and Human Services (HHS) to focus our efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.

These efforts are paying off.  Since July 2011, the U.S. Attorney's Office for the Northern District of Illinois has filed approximately 11 home health fraud cases and charged 45 individuals that have resulted in 15 trial convictions. For example, in December 2012, the co-owner of a former home health care business was sentenced to 10 years in federal prison for defrauding Medicare of more than $2.9 million by submitting tens of thousands of false claims annually that misrepresented medical services provided to beneficiaries. In August 2012, a home health care agency in suburban Chicago, two nurses who are part owners of the company, and a third nurse affiliated with them, along with two marketers, were indicted on federal charges for allegedly participating in a conspiracy to pay and receive kickbacks in exchange for the referral of Medicare patients for home health care services. 

CMS identified areas that stood as significant outliers compared to other comparable counties in the U.S. across key factors that strongly indicate fraudulent activity including: a disproportionate number of providers relative to beneficiaries, a rapid increase in Medicare enrollment applications from providers during a short period of time, and high utilization of home health services in the affected counties. In addition, CMS consulted with the OIG and DOJ regarding fraud schemes and trends in these areas. To effectively combat fraud in all of our programs, CMS has reported that the moratorium should extend to home health providers in Medicaid and CHIP as well.


If you are a Medicare beneficiary and have a question about the moratorium, please call the Medicare Help line, 1-800-MEDICAR(E), 1-800-633-4227, TTY/TDD 1-877-486-2048.

If you are an Illinois Medicaid or CHIP beneficiary and have a question about the moratorium, please call the Illinois Medicaid agency at 1-(877) 912-8880.


If you have submitted an application to enroll in Medicare, Medicaid or CHIP as a certified home health provider in Chicago and have a question about the status of your application, please call the Medicare Administrative Contractor, Palmetto GBA at 1-866-830-3925.


Section 6401 of the Affordable Care Act added new section 1866(j)(7) to the Social Security Act, that provides the HHS Secretary with the authority to impose a moratorium on the enrollment of new providers and suppliers if the SSecretary determines a moratorium is necessary to prevent or combat fraud, waste or abuse in Medicare, Medicaid or CHIP. CMS published a final rule effective March 25, 2011 implementing this authority.

Today’s notice can be downloaded at:

To read the final rule effective March 25, 2011, please see