CMS Imposes Nationwide Enrollment Moratoria on Hospices and Home Health Agencies; Issues New Medicaid State Directed Payment Limits

May 18, 2026

Hospices and home health agencies, referring providers, states, and patients and their caregivers should prepare to cope with the likely impacts of a new Medicare program enrollment moratorium on new hospice and home health agencies and changes in Medicare and Medicaid reimbursement rules announced last week as part of a new federal antifraud initiative.

KEY TAKEAWAYS: CMS has imposed immediate nationwide six-month enrollment moratoria for home health agencies and hospices in Medicare, effective May 13, 2026. Separately, CMS has issued guidance capping Medicaid State Directed Payments at or below Medicare rates. Existing enrolled providers are unaffected by the moratorium and may continue billing with the understanding that they must ensure their billing and other practices can withstand scrutiny of newly heightened fraud investigations and review. Prospective new providers and certain ownership change transactions are blocked during the moratorium period.

BACKGROUND

On May 13, 2026, the Centers for Medicare & Medicaid Services (CMS) published two Federal Register notices imposing immediate, nationwide, six-month enrollment moratoria on new Medicare enrollment for hospice providers and home health agencies (HHAs). The moratoria are effective as of the May 13, 2026 publication date and apply to all states, territories, and the District of Columbia. This action follows an earlier, still-active moratorium on durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) companies imposed in February 2026, making these among the most expansive fraud-prevention actions in CMS’ history.

At the same time, CMS issued preliminary guidance to states regarding new payment limits on Medicaid State Directed Payments (SDPs) under managed care, pursuant to the recently enacted “One Big Beautiful Bill Act.”

NATIONWIDE MEDICARE ENROLLMENT MORATORIA: HOSPICES AND HOME HEALTH AGENCIES

Legal Authority

CMS derives its moratorium authority from Section 1866(j)(7) of the Social Security Act, added by the Affordable Care Act, and implemented through 42 C.F.R. § 424.570. CMS may impose a temporary moratorium on new Medicare, Medicaid, or CHIP enrollment when it determines there is a significant potential for fraud, waste, or abuse. The decision to impose a moratorium is not subject to judicial review.

Scope and Effective Date

Both moratoria became effective May 13, 2026 and will remain in effect for six months, subject to renewal in additional six-month increments. CMS will publish any extension or termination in the Federal Register. The moratoria cover:

  • All new initial Medicare enrollment applications for hospice providers and HHAs (including HHA branch offices)
  • Certain changes in majority ownership (CIMOs) that would require initial re-enrollment—a mechanism CMS has identified as frequently exploited to obscure bad-actor control

The moratoria do NOT affect:

  • Currently enrolled hospice providers and HHAs, which may continue providing services and billing Medicare without interruption;
  • Changes in practice location (unless relocating from outside to inside the moratorium area);
  • Routine administrative changes (phone number, address, etc.);
  • Any enrollment application received by a Medicare contractor before May 13, 2026

Rationale: Data-Driven Findings

CMS grounded both moratoria in extensive data analysis and law enforcement experience. Key findings cited by the agency include:

  • In Los Angeles County alone, the number of enrolled HHAs rose more than 40 percent between 2019 and 2023, with over 1,000 new HHAs enrolling despite no corresponding change in the Medicare beneficiary population. Los Angeles County now holds roughly 12–15 percent of all HHAs nationwide, while accounting for only approximately 3 percent of the national Medicare beneficiary community.
  • Clusters of multiple HHAs operating from a single shared address have been detected in Ohio, Texas, Michigan, North Carolina, and Nevada, which CMS views as a strong indicator of fraud.
  • CMS, in coordination with Vice President JD Vance’s Anti-Fraud Task Force, has suspended payments to approximately 800 hospices and HHAs in Los Angeles, which were responsible for $1.4 billion in Medicare spending in the prior year, with $70 million in payments suspended to date.
  • Numerous recent criminal convictions and civil settlements involve hospice and HHA operators across many states, including multimillion-dollar fraud schemes in Massachusetts, Michigan, Texas, Ohio, Illinois, Oklahoma, and Pennsylvania.

CMS emphasized that because fraud schemes are “highly migratory,” a nationwide moratorium—rather than a targeted geographic one—is necessary to prevent bad actors from simply relocating to avoid scrutiny.

Applicability to Medicaid and CHIP

The moratoria announced in the Federal Register apply to Medicare enrollment only. CMS has expressly invited each state to consult with the agency about implementing a parallel moratorium tailored to their Medicaid and CHIP programs. States are not required to comply if they determine that doing so would adversely affect beneficiary access to care.

Accompanying Enforcement Intensification

CMS also announced that, during the moratorium period, it will:

  • Intensify targeted investigations and deploy advanced data analytics;
  • Accelerate revocation and deactivation of currently enrolled providers suspected of fraud;
  • Continue nationwide site visits to hospices to verify operations;
  • Maintain heightened oversight of newly enrolled hospice providers in states identified as high-risk: Arizona, California, Georgia, Ohio, Nevada, and Texas;
  • Operate a new publicly available hospice scoring system to increase transparency;
  • Implement enhanced HHA enrollment screening, including site verification and fingerprinting-based background checks; and
  • Expand a pre- and post-claim review demonstration for HHA claims in Florida, Illinois, Oklahoma, Ohio, North Carolina, and Texas.

Existing hospice and home health providers and those in the targeted regions particularly are urged to work with qualified legal counsel within the scope of attorney-client privilege to assess and tighten their existing practices and audit prior billings in response to recent OIG and other recent reports to assess and address risks from practices the government now views as fraudulent or aggressive as this enhanced scrutiny targets identification of practices the government views as fraud and other aggressive practices by current providers. Providers subjected to this scrutiny must be prepared to defend their actions to avoid fraud charges, recoupment, program participation suspensions or exclusions or other adverse consequences.

Moratorium Termination

Under 42 C.F.R. § 424.570(d), CMS may lift a moratorium early if: (1) a Presidential disaster declaration applies; (2) circumstances warranting the moratorium have abated; (3) a public health emergency is declared; or (4) the Secretary determines the moratorium is no longer necessary. Upon lifting, formerly blocked provider types would be assigned to the “high” screening level for six months.

Appeals

A provider whose enrollment application is denied due to the moratorium may appeal under 42 C.F.R. part 498. However, the scope of such an appeal is limited solely to whether the moratorium applies to the particular provider—not to the merits of CMS’ decision to impose the moratorium. Application fees will be refunded where a denial results from the moratorium.

CMS GUIDANCE ON MEDICAID STATE DIRECTED PAYMENT LIMITS

Overview

On September 9, 2025, CMS issued preliminary guidance to states implementing new federal payment limits on Medicaid State Directed Payments (SDPs) in managed care, as required by the One Big Beautiful Bill Act. SDPs—arrangements that direct how Medicaid managed care plans pay providers—have grown dramatically, from use by only two states in 2016 to 39 states today, with projected annual SDP spending exceeding $124.3 billion for FY 2025 and $144.6 billion for FY 2026.

New Payment Limits

Effective for rating periods beginning on or after July 4, 2025, SDPs for the following service categories must not exceed specified Medicare rate benchmarks:

  • Inpatient hospital services;
  • Outpatient hospital services;
  • Nursing facility services; and
  • Qualified practitioner services at an academic medical center.

The applicable ceiling is:

  • 100% of the Medicare rate in Medicaid expansion states;
  • 110% of the Medicare rate in non-expansion states; or
  • Where no Medicare rate exists, the Medicaid state plan rate applies.

Grandfathering

Certain SDPs submitted or approved before July 4, 2025 may qualify for a temporary grandfather period through rating periods beginning January 1, 2028, followed by a phased reduction to meet the new limits. CMS will notify states in approval letters whether a particular SDP likely qualifies for grandfathering.

Next Steps for States

States must revise any pending or future SDP preprints that do not qualify for grandfathering before CMS will continue review. Health care providers participating in SDPs should coordinate with their state Medicaid agencies to understand the impact of these limits on their payment arrangements.

IMPLICATIONS FOR PROVIDERS

Hospice and home health providers should assess the following in light of these actions:

For Currently Enrolled Providers

For currently enrolled providers:

  • Operations may continue uninterrupted. No action is required to maintain current enrollment status. However, currently enrolled providers must ensure that current and future practices can withstand the heightened oversight and scrutiny HHS and it’s auditors will apply to current and previously submitted bills as part of their fraud investigation and enforcement practices.
  • Expect heightened CMS scrutiny during the moratorium period, including potential site visits, billing audits, and enhanced data monitoring.
  • Providers in the identified high-risk states (AZ, CA, GA, NV, OH, TX for hospices) should anticipate heightened oversight and ensure documentation and compliance programs are robust.
  • Providers in the HHA pre- and post-claim review demonstration states (FL, IL, OK, OH, NC, TX) should review their claims processes for compliance.

For Providers Seeking New Enrollment

For providers seeking new enrollment:

  • Applications received by a Medicare contractor before May 13, 2026 will be processed. Providers should confirm their contractor’s receipt of a timely-filed application.
  • Applications submitted on or after May 13, 2026 will be denied. Application fees will be refunded in these instances.
  • Any denied applicant wishing to contest applicability of the moratorium may appeal under 42 C.F.R. part 498, with the narrow scope described above.
  • Any provider granted authorization to operate under the programs must be prepared to meticulously comply with the current rules, taking to count all guidance passed and emerging.

For Transactions Involving Ownership Changes

For transactions involving ownership changes:

  • Parties to acquisitions, mergers, or other transactions involving hospice or HHA ownership should carefully evaluate whether the transaction constitutes a “change in majority ownership” (CIMO) that would require initial re-enrollment under 42 C.F.R. § 424.550.
  • CIMOs within 36 months of an HHA’s initial enrollment (or most recent prior CIMO) that trigger initial re-enrollment will be blocked during the moratorium. Deal teams should factor this into transaction planning and timelines.

For Organizations Participating in Medicaid Managed Care SDPs

Organizations participating in Medicaid Managed Care SDPs should:

  • Review existing and planned SDP arrangements for compliance with the new Medicare rate caps.
  • Identify whether any current SDPs qualify for the grandfathering period and assess the financial impact of the eventual phase-down.
  • Work with state Medicaid agency partners to ensure pending preprints are revised as necessary.

Patients and Their Caregivers

Patients and their caregivers should anticipate and prepare to cope with likely delays and disruptions in the ability to access care and changes in services as providers respond to the moratorium, rule changes and enforcement. Declines in staffing and services also are likely due to rule changes and reimbursement cuts.

For Help or More Information

The author of this update, Cynthia Marcotte Stamer advises hospices, home health agencies, and other Medicare and Medicaid providers and other health industry clients on enrollment matters, compliance programs, government investigations, transaction due diligence, reimbursement compliance and disputes, audits and investigations, and other legal and operational compliance and risk management and legislative and regulatory affairs. She is available to assist your organization in assessing the impact of these developments and navigating the compliance and strategic steps that follow. For more information about these  or other health care, managed care and other health benefits, or other health care developments, please contact Ms. Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.

About the Author

Peer recognized as “Top Rated Lawyer” and “LEGAL LEADER™ “Top Rated Lawyer” and “Best Lawyer” for her work in Health Care Law, Labor and Employment Law; ERISA & Employee Benefits,” and “Business and Commercial Law,” Cynthia Marcotte Stamer is an A Martindale-Hubble “AV-Preeminent” (Top 1%) attorneys board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for her more than 35 years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications including leading edge work on PBM, pharmacy and pharmaceutical and other health care, managed care, insurance, and insured and self-insured contracting, design, administration and regulation.. 

Author of numerous highly regarded works on health care fraud and other compliance, risk management and operations,  Chair of the Tort Trial and Insurance Practice Section Medicine and Law Committee, past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, the ABA International Section Life Sciences Committee and the former Group Chair and Welfare Benefit Committee Co-Chair of the ABA RPTE Employee Benefits & Other Compensation Group, Ms. Stamer is widely recognized for her decades of pragmatic, leading edge work, scholarship and thought leadership on health industry legal, public policy and operational concerns. 

Ms. Stamer’s work throughout her career has focused heavily on working with hospitals, health care systems, long term care, rehabilitation, home health, hospice, clinics, and other health care organizations; physician and other provider organizations and practitioners; accreditation, medical staff, peer review, and quality committees and organizations; billing, audit, practice management, utilization management, EMR, claims, payroll and other technology, billing and reimbursement and other services and product vendors and services organizations; pharmaceutical, pharmacy, and prescription benefit management and organizations; DME; health care and managed care, health and other employee benefit plan, insurance and financial services and other public and private organizations; consultants; products and solutions consultants and developers; investors; managed care organizations, self-insured health and other employee benefit plans, their sponsors, fiduciaries, administrators and service providers, insurers and other payers, health industry advocacy and other service providers and groups and other health and managed care industry clients as well as federal and state legislative, regulatory, investigatory and enforcement bodies and agencies on billing and reimbursement, government investigations and enforcement, and other legal and operational compliance and risk management, performance and workforce management, regulatory and public policy, and other legal and operational concerns. 

Author of a multitude of highly regarded publications and presentations,  Ms. Stamer is widely recognized for her thought leadership on these and other health care, managed care and other health plan,and other health industry matters.  In addition, Ms. Stamer contributes her time and leadership to numerous policy, professional, civil and other organizations including service as the, the American Bar Association (ABA) International Section Life Sciences Committee Vice Chair, a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting and a former Council Representative, Past Chair of the ABA Managed Care & Insurance Interest Group, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her extensive publications and thought leadership as well as leadership involvement in a broad range of other professional and civic organizations. For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

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Chiropractor, Modern Vascular Office-Based Labs and Modern Vascular Corporate Entities Face False Claims Act Prosecution

December 19, 2022

Three consolidated False Claims Act (“FCA”) lawsuits against chiropractor Yury Gampel (“Gampel”), 15 Modern Vascular office-based labs owned primarily by Gampel located across the United States, and five Modern Vascular-affiliated companies owned by Gampel alert other chiropractic, physician and other medical providers using office-based labs send a clear warning to other health care providers and suppliers for services covered or billed to Medicare, Medicaid, TRICARE or other federal health care programs about the necessity to ensure their arrangements don’t involve illegal financial relationships or transactions.

False Claims Act Liability Arising From Participation In Or Filing Claims Involving Improper Inducements

The Justice Department suit against the defendants alleges the defendants both arose from the defendants participation in arrangements involving the offering and payment of illegal remuneration in violation of the federal Anti-Kickback Statute (“AKS”) and that the claims for benefits made to Medicare and other federal programs for care provided involving the arrangement violated the FCA.

The AKS generally prohibits any person or entity from soliciting, receiving, offering, or paying any direct or indirect prohibited remuneration as an inducement or reward for referring, recommending, ordering, or arranging for the purchase of any item or service for which payment may be made in whole or in part by a federal health care program. Parties violating the AKS commit a felony punishable with a fine of up to $100,000, imprisonment for up to 10 years or both.

In addition to any criminal liability arising under the AKS, filing claims derived or involving transactions prohibited by the AKS also can trigger liability for violation of the FCA. The FCA makes it unlawful for any person to submit, directly or indirectly, false or fraudulent claims for payment to the Government by among other things:

  • Knowingly presenting, or causing to be presented, a false or fraudulent claim for payment or approval in violation of 31 U.S.C. § 3729(a)(1)(A) (the “presentment provision”); or
  • Knowingly making, using, or causing to be made or used, a false record or statement material to a false or fraudulent claim in violation of 31 U.S.C. § 3729(a)(1)(B).

The FCA defines the term “knowingly” under the FCA very broadly. As defined, “knowingly” means that a person, with respect to information, (i) has actual knowledge of the information, (ii) acts in deliberate ignorance of the truth or falsity of the information, or (iii) acts in reckless disregard of the truth or falsity of the information. 31 U.S.C. § 3729(b). No proof of specific intent to defraud is required to show that a person acted knowingly under the FCA.

Violations of the FCA subject the defendant to mandatory civil penalties per FCA violation, plus three times the amount of damages that the Government sustains as a result of the defendant’s actions. 31 U.S.C. § 3729(a). Under 42 U.S.C. § 1320a-7(b)(7), health care providers submitting claims to Medicare or other federal health care programs also can face exclusion from participation in federal health care programs for FCA violations.

Health care providers filing claims for Medicare or other federal health plans can violate the FCA by knowingly presenting or causing to be presented claims for items or services that the person knew or should have known were not medically necessary, or were false or fraudulent. 42 U.S.C. §§ 1320a-7a(a)(1).

Moreover, health care providers under the Medicare statute have an affirmative duty to familiarize themselves with the statutes, regulations, and guidelines regarding coverage for the Medicare services. As a condition of program participation, Medicare regulations require providers and suppliers to certify that:

  • The provider or supplier meets, and will continue to meet, the requirements of the Medicare statute and regulations, 42 C.F.R. § 424.516(a)(1), including that any claims and underlying transactions made in a claim for Medicare comply with the Federal anti-kickback statute and the Stark law), and on the supplier’s compliance with all otherwise applicable conditions of participation in Medicare; and
  • The provider or supplier will not knowingly to present or cause to be presented a false or fraudulent claim for payment by Medicare, or to submit claims with deliberate ignorance or reckless disregard of their truth or falsity.

Additional certifications of continued compliance with these requirements also are required when claims are filed. Accordingly, since health care providers and suppliers are responsible for taking appropriate steps to familiarize themselves with the rules and regulations applicable to their claim and the transactions underlying it and certify in connection with the filing of the claim that the claim and its underlying transactions comply with the law, health care providers filing claims involving prohibited financial incentives or other transactions prohibited by law risk FCA liability.

Gampel, Modern Vascular FCA Complaint

Derived from the Justice Department’s assumption and consolidation of various qui tam lawsuits separately brought by various physicians, the United States filed its complaint in three consolidated lawsuits pending in the United States District Court for the District of Arizona under the qui tam, or whistleblower, provisions of the False Claims Act, 31 U.S.C. §§ 3729-3733 (“FCA”) which allow a private citizen to sue on behalf of the government and share in any recovery. The United States is also entitled to intervene in the lawsuits, as it did in these cases.

The resulting consolidated three consolidated Justice Department lawsuits seek to recover treble damages and civil penalties, and under common law and equitable theories of recovery from defendants for their billing of Medicare, TRICARE and other federal health care programs for claims resulting from transactions involving prohibited remuneration offered and provided in violation of the AKS under Gampel’s alleged schemes Nobility Management LLC; Modern Vascular LLC; Modern Vascular of South Florida LLC; Modern Vascular Management LLC; Modern Vascular Management – East LLC; Modern Vascular Management – West LLC; Modern Vascular Institute LLC; Modern Vascular of Mesa LLC; Modern Vascular of Glendale LLC; Modern Vascular of Sun City LLC; Modern Vascular of Tucson LLC; San Antonio Vascular Specialists Corp. dba Modern Vascular; Fort Worth Vascular Specialists Corp. dba Modern Vascular; Modern Vascular of Denver LLC; Modern Vascular – Navajo LLC; Modern Vascular of Fairfax LLC; Modern Vascular of Houston LLC; Modern Vascular of Indianapolis LLC; Modern Vascular of Southaven LLC; Modern Vascular of St. Louis LLC; and Modern Vascular of Kansas LLC. 

The Justice Department complaint alleges Defendant Yury Gampel, a chiropractor, is the founder and former Chief Executive Officer (“CEO”) of a franchise of office-based labs (“OBL”) located in Arizona, New Mexico, Colorado, Texas, Indiana, Kansas, Mississippi, Missouri, Tennessee, and Virginia operating under the name Modern Vascular (collectively, the “Modern Vascular OBLs”). The Modern Vascular OBLs – each its own separate legal entity – focus on the treatment of peripheral arterial disease (“PAD”), particularly through an aggressive use of vascular intervention procedures, such as angioplasty and atherectomy. The complaint claims Gampel and the Modern Vascular defendants designed and promoted the franchises that incorporated a package of management and other services provided by various Modern Vascular defendant companies.

Defendant Nobility Management, LLC, provides management services to the Modern Vascular OBLs. Defendants Modern Vascular Management, LLC; Modern Vascular Management – East, LLC; and Modern Vascular Management – West, LLC, offer
IT and management support to Modern Vascular OBLs. Defendants Modern Vascular, LLC, and Modern Vascular of South Florida, LLC, are corporations controlled by Gampel that have various ownership interests in Modern Vascular OBLs. Through Modern Vascular, LLC, and Modern Vascular of South Florida, LLC, and in his own capacity, Gampel is the majority owner of the Modern Vascular OBLs. (These entities that own and manage the Modern Vascular OBLs are referred to collectively below as “Modern Vascular Corporate.”)

The complaint alleges that Gampel and Modern Vascular Corporate designed and implemented a fraud scheme at Modern Vascular OBLs at the expense of patients and federal payors from at least January 1, 2018 through June 30, 2022. Among other things, the complaint charges Gampel and the Modern Vascular defendants offered physicians the opportunity to invest in Modern Vascular office-based labs to induce them to refer their Medicare and TRICARE patients to Modern Vascular for the treatment of peripheral arterial disease. More specifically, Gampel and Modern Vascular Corporate opened Modern Vascular OBLs in new markets where referring physicians and vascular surgeons had established relationships. Prior to opening an OBL in a particular location, Gampel sought out up to 20 local physicians – usually podiatrists and pain management physicians – who traditionally referred to vascular surgeons and offered each up to a two percent ownership interest in the OBL in order to induce the physicians to refer to the OBL. Gampel and Modern Vascular Corporate selected these particular physicians (hereinafter “physician investors”) to offer ownership investment because Gampel and Modern Vascular Corporate identified them as potential high-referral sources. Once they invested in an OBL, Gampel and Modern Vascular Corporate further required the physician-investors to make referrals to Modern Vascular OBLs as a condition for remaining as a physician-investor. The complaint also alleges that Gampel pressured vascular surgeons and interventional radiologists employed at the Modern Vascular office-based labs to increase the number of invasive surgical procedures performed by tracking procedures and setting aggressive weekly and monthly goals for such procedures. In particular, Gampel and Modern Vascular Corporate provided remuneration to physician investors in Modern Vascular OBLs to induce those investors to refer patients to the Modern Vascular OBL.

The Justice Department charges that using this scheme, Defendants between January 1, 2018 and June 30, 2022 submitted, and caused to be submitted, tens of millions of dollars in false or fraudulent claims to Medicare, TRICARE and other federal health care programs by offering and providing illegal remuneration to health care providers to induce referrals to the Modern Vascular OBLs in violation of the Anti-Kickback Statute (“AKS”), 42 U.S.C. § 1320a-7b. To induce referrals, Gampel and Modern Vascular Corporate provided remuneration to physician-investors in the form of equity ownership interests in an OBL, which also included distributions, the prospect of future distributions, and/or the prospect of a cash-out of the equity ownership amounts when
the Modern Vascular OBLs were sold. During the relevant time period, the Justice Department also claims Modern Vascular
OBLs received over $50 million from Medicare Part B alone for claims submitted for patients referred by physician-investors in violation of the FCA.

Warning To Other Heath Care Providers & Suppliers

In announcing its filing of the Gambrel FCA lawsuit, the Justice Department warned other federal health program providers and suppliers and their business partners, investors, employees and agents from violating the AKS, FCA or both in the provision of or billing of health care services or supplies. “As part of our mission to protect the American people, the FBI remains committed to safeguarding patients who rely on our healthcare systems,” said Deputy Assistant Director Aaron Tapp of the FBI’s Criminal Investigative Division. “The FBI and our law enforcement partners will continue to investigate those who abuse our healthcare systems, place patients at risk, and waste taxpayer dollars.” 

This warning, along with the ever-lengthening list of federal criminal and civil prosecutions, convictions and settlements by the Justice Department, the Department of Health & Human Services Office of Inspector General and other agencies provide a strong warning to health care providers, suppliers and others involved in creating or administering transactions and other arrangements for the delivery and billing for health are to be billed to Medicare, Medicaid, TRICARE and other health care arrangements covered by the AKS, the FCA or other federal or state health care fraud laws to take well documented care to ensure the care delivery arrangement does not involve transactions prohibited under the AKS or other federal or state health care fraud transactions and the care billed qualifies for reimbursement before submitting the claim. Parties who know or suspect that they may have participated in an arrangement prohibited under these laws or submitted prohibited claims should contact experienced legal counsel within the scope of attorney-client privilege for assistance in reviewing those concerns and exploring options for correction or mitigation.

For More Information

If your organization would like to learn more about the concerns discussed in this update or seeks assistance auditing, updating, administering or defending its human resources, compensation, benefits, corporate ethics and compliance practices, or other performance related concerns, contact management attorney and consultant Cynthia Marcotte Stamer.

An attorney Board Certified in Labor & Employment Law by Texas Board of Legal Specialization, Ms. Stamer is recognized for work helping organizations management people, operations and risk as  a Fellow in the American College of Employee Benefit Counsel, a “Top Woman Lawyer,” “Top Rated Lawyer,” and “LEGAL LEADER™” in Labor and Employment Law and Health Care Law; a “Best Lawyers” in “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law.”

For 35 years, Ms. Stamer’s work has focused on advising and assisting businesses and business leaders with these and other employment and other staffing, employee benefit, compensation, risk, performance and compliance management and other operational solutions and concerns. Her experience includes helping management both manage performance and manage legal risk and compliance.  While helping businesses define and manage the conduct and performance of their employees, contractors and vendors, she also assists employers and others about compliance with federal and state equal employment opportunity, compensation, health and other employee benefit, workplace safety, leave, and other labor and employment laws, advises and defends businesses against labor and employment, employee benefit, compensation, fraud and other regulatory compliance and other related audits, investigations and litigation, charges, audits, claims and investigations by the IRS, Department of Labor, Department of Justice, SEC,  Federal Trade Commission, HUD, HHS, DOD, Departments of Insurance, and other federal and state regulators. Ms. Stamer also speaks, coaches management and publishes extensively on these and other related matters. For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see hereor contact Ms. Stamer directly.

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NOTICE: Terms. These materials are for general informational and educational purposes only. They do not establish an attorney-client relationship, are not legal advice, a substitute for legal advice, an offer or commitment to provide legal advice or an admission. The information and statements in these materials may not address all relevant issues or apply to any situation or circumstances. The author reserves the right to qualify or retract any of these statements at any time. and does not necessarily address all relevant issues. Because the law evolves and in ways that subsequent developments could impact the currency and completeness of this discussion. The author disclaims and has no responsibility to provide any update or otherwise notify anyone any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers are urged to engage competent legal counsel for consultation and representation considering the specific facts and circumstances presented in their unique circumstance at any time. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication. Readers acknowledge and agree to the conditions of this Notice as a condition of their access of this publication. Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein. ©2022 Cynthia Marcotte Stamer. Nonexclusive right to republish granted to Solutions Law Press, Inc. All other rights reserved.

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Posted by Cynthia Marcotte Stamer

Justice Department Antitrust Suit Seeks To Block UnitedHealth Acquisition Of Change Healthcare As Anticompetitive

March 3, 2022

The U.S. Department of Justice along with the Minnesota and New York Attorneys General (collectively “Justice Department”) are suing to stop UnitedHealth Group Incorporated (“United”) from acquiring Change Healthcare Inc. (“Change”) on February 24, 2022 in an announced $13 billion transaction as prohibited by antitrust laws.  The suit is the latest in a series of Justice Department suits that seek to prevent continued consolidation of the health industry giants following decades of industry consolidation.

United, headquartered in Minnetonka, Minnesota, is an integrated health care enterprise that includes, among other subsidiaries, UnitedHealthcare, the largest health insurer in the United States; Optum Health, a large network of health care providers located throughout the country; OptumRx, a large pharmacy benefit manager; and OptumInsight, a health care technology business. United’s revenues were $288 billion in 2021.

Change Healthcare Inc. headquartered in Nashville, Tennessee, is a leading independent health care technology company providing health care analytics, software, services and data to health care providers, health insurers and other software and services firms in the health care industry.  Today, Change markets itself as a partner to a wide variety of other health care ecosystem organizations including United’s major health insurance competitors as providing vital software and services need for innovation and problem solving. These services include electronic data interchange (EDI) clearinghouse services, which transmit claims and payment information between insurers and providers, and first-pass claims editing solutions, which review claims under the health insurer’s policies and relevant treatment protocols. Change’s revenues were $3.4 billion in 2021.

In the civil antitrust complaint filed in the U.S. District Court for the District of Columbia on February 24, 2022, the Justice Department charges United’s acquisition of this neutral player would allow United to tilt the playing field in its favor, harming current competition and allowing United to control and distort the course of innovation in this industry for the foreseeable future.

Among other things, the Justice Department alleges allowing United to eliminate a significant independent and innovative competitor firm by acquiring Change will undermine competition in the commercial health insurance market, stifle innovation in the employer health insurance markets and suppress competition in the market for a vital technology used by health insurers to process health insurance claims and reduce health care costs by giving United control of a critical data highway through which about half of all Americans’ health insurance claims pass each year.

As alleged in the complaint, the proposed transaction would give United, a massive company that owns the largest health insurer in the United States, access to a vast amount of its rival health insurers’ competitively sensitive information. Post-acquisition, United would be able to use its rivals’ information to gain an unfair advantage and harm competition in health insurance markets. The Justice Department also claims the proposed transaction would eliminate United’s only major rival for first-pass claims editing technology — a critical product used to efficiently process health insurance claims and save health insurers billions of dollars each year — and give United a monopoly share in the market.

A Justice Department press release about the lawsuit quotes Principal Deputy Assistant Attorney General Doha Mekki of the Justice Department’s Antitrust Division as saying, “Unless the deal is blocked, United stands to see and potentially use its health insurance rivals’ competitively sensitive information for its own business purposes and control these competitors’ access to innovations in vital health care technology. The department’s lawsuit makes clear that we will not hesitate to challenge transactions that harm competition by placing so much control of data and innovation in the hands of a single firm.”

The suit is the latest in a series of civil antitrust lawsuits challenging proposed mergers or acquisitions of between health insurance industry giants as anticompetitive in recent years.  Stay tuned for more details.  

More Information

We hope this update is helpful. For more information about the these or other health or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297. 

Solutions Law Press, Inc. invites you receive future updates by registering on our Solutions Law Press, Inc. Website and participating and contributing to the discussions in our Solutions Law Press, Inc. LinkedIn SLP Health Care Risk Management & Operations Group, HR & Benefits Update Compliance Group, and/or Coalition for Responsible Health Care Policy.  

About the Author

Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications.

A Fellow in the American College of Employee Benefit Counsel, Vice Chair of the American Bar Association (“ABA”) International Section Life Sciences and Health Committee, Past Chair of the ABA Managed Care & Insurance Interest Group, Scribe for the ABA JCEB Annual Agency Meeting with HHS-OCR, past chair of the the ABA RPTE Employee Benefits & Other Compensation Group and current co-Chair of its Welfare Benefit Committee, Ms. Stamer is most widely recognized for her decades of pragmatic, leading edge work, scholarship and thought leadership on health and managed care industry legal, public policy and operational concerns. 

Ms. Stamer’s work throughout her 30 plus year career has focused heavily on working with health care and managed care, health and other employee benefit plan, insurance and financial services and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns. 

For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here. 

About Solutions Law Press, Inc.™

Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available here.  

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If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.

NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author and Solutions Law Press, Inc.™ reserve the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The author and Solutions Law Press, Inc.™ disclaim, and have no responsibility to provide any update or otherwise notify anyone any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication. Readers acknowledge and agree to the conditions of this Notice as a condition of their access of this publication. 

Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.

©2022 Cynthia Marcotte Stamer. Limited non-exclusive right to republish granted to Solutions Law Press, Inc.™

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Posted by Cynthia Marcotte Stamer