Health Law Daily Wrap Up, EXPERT INSIGHTS—CMS "Crackdown On Fraud" Continues With Nationwide Six-Month Moratoria On New Medicare Enrollments For Hospices And Home Health Agencies, (May 26, 2026)

By Anna K. Abram, Shawn Maree Bishop, Kelly Cleary, Mark R. Herring, Colin M. Huntley, John Jacob, Sara McLean, Parvin Daphne Moyne, Hans Christopher Rickhoff, Laura Hill, Kandis McClure and Olive Lee of Akin Gump Strauss Hauer & Feld LLP

On May 13, 2026, the Centers for Medicare & Medicaid Services (CMS) imposed two nationwide, six-month moratoria on new Medicare enrollments of hospice and home health agencies (HHAs). CMS states that the action, taken in coordination with Vice President JD Vance's Anti-Fraud Task Force, "continues the Trump Administration's crackdown on fraud, waste, and abuse in the Medicare program by stopping improper billing and preventing bad actors from entering the system."

CMS is expanding its use of its health care provider and supplier enrollment moratorium authority.[1] CMS has traditionally used this authority to impose moratoria in specific geographic regions; however, in February 2026, CMS issued its first nationwide enrollment moratorium—of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) medical supply companies. With three nationwide enrollment moratoria in as many months, CMS is signaling that this authority is now a regular tool in its fraud-prevention toolkit.

Central Features of the Moratoria

The moratoria, which took immediate effect on May 13, 2026, and will remain in place for six months, bar new Medicare enrollments for hospices and HHAs nationwide, including for enrolled providers seeking to establish new HHA branches and hospice practice locations and where a change in majority ownership requires a new enrollment. The moratoria do not otherwise affect existing enrolled providers, who may continue furnishing services and submitting claims. Also, while pending enrollment applications received before May 13, 2026, are not subject to the moratoria, applications submitted during the moratorium period will be denied and must be resubmitted after the relevant moratorium is lifted.

Providers may administratively appeal a denial of billing privileges based on the moratoria under 42 C.F.R. Part 498. But, according to CMS, the scope of any such appeal is limited to whether the moratorium applies to that particular provider. CMS's regulations do not permit individual exceptions to a moratorium.

The moratoria may be extended in additional six-month increments if CMS determines an extension is necessary.[2] When the moratoria are ultimately lifted, any provider that was unable to enroll due to the moratoria and applies within six months of its lifting will be assigned to the "high" categorial risk screening level under 42 C.F.R. §§424.518(c)(3)(iii) and 455.450(e)(2), meaning those providers will be subject to additional requirements during the enrollment process.

CMS Cites DOJ Enforcement, Including False Claims Act Settlements, As Rationale

On May 15, 2026, two days after the imposition of the provider moratoria were issued, CMS published two Notices in the Federal Register—one on the enrollment moratorium of hospices (91 FR 27946) and the other on the enrollment moratorium of HHAs (91 FR 27954). The notices cite ongoing program integrity concerns and data analytics that, according to CMS, indicate potential fraud justifying the nationwide restrictions.

In its notice rolling out the enrollment moratorium on HHAs, CMS states that program integrity risks surrounding HHAs are "among the highest of any provider/supplier type" and that "hundreds of millions of taxpayer dollars remain under threat from fraudulent parties." In the enrollment moratorium on hospices, CMS states that "hospices present no less of a payment safeguard threat than HHAs and DMEPOS suppliers." CMS also mentions three specific concerns regarding hospices:

1. Instances of hospices certifying patients for hospice care when they were not terminally ill and providing little to no services to beneficiaries.

2. Rapid growth in potentially fraudulent hospices.

3. Churn and burn" schemes where a new hospice opens and bills Medicare until it reaches its statutory yearly payment limit or is audited, at which point it shuts down, retains payments, and buys a new Medicare billing number. It then transfers the patients over to the new Medicare billing number and starts the cycle again.

CMS cites an increasing number of criminal convictions and False Claims Act (FCA) settlements in recent years involving hospice and home health fraud as evidence of the "significant potential for fraud, waste, or abuse" warranting a nationwide moratorium rather than a geographically targeted one.

Increased Fraud Enforcement

The identification of hospice and home health as high-risk areas, as well as CMS's reliance on Department of Justice (DOJ) enforcement actions in its moratoria notices, is likely to increase government scrutiny in these areas by DOJ civil and criminal enforcement authorities, as well as FCA whistleblowers.

CMS itself notes that it plans to increase fraud enforcement during the period of the moratoria, advising that it will "intensify targeted investigations, deploy advanced data analytics and accelerate the removal of hospice and HHA providers from the Medicare program that are suspected of committing fraud."

Further, this announcement portends added ramp-up in provider payment suspensions. CMS has already substantially increased payment suspensions over the past year with about $5.7 billion in suspended funds in 2025, including around $1.5 billion related to DMEPOS billing. Given the steady drumbeat of public-facing statements by both HHS and DOJ about leveraging data analytics to maximum effect,[3] including in this announcement, providers should expect CMS to use sophisticated analytics to compare their billing against national benchmarks, flagging anomalies in volume, frequency and coding that can trigger pre-payment reviews or immediate payment suspensions. Notably, suspensions can be predicated on any "credible allegation of fraud,"[4] well before the conclusion of a government investigation or any final determination on the merits. This poses a significant financial risk for providers given that the impact is immediate and severely restricts cash flow.

Vice President Vance's Warning to States

On the same day that CMS issued these moratoria, Vice President Vance announced that the administration had sent letters to all 50 state attorneys general warning that states failing to comply with Medicaid antifraud statutes risk losing federal Medicaid funding. The administration is currently withholding $1.3 billion in Medicaid payments to California, following a similar $260 million withholding from Minnesota earlier this year. Given the administration's stance, providers may also see heightened scrutiny from Medicaid Fraud Control Units and other state enforcement authorities.

Congressional Action

In addition to the administration's focus on fraud, waste and abuse in the Medicare and Medicaid programs, Congress has also been active on these issues in the 119th Congress. As more recent examples of this focus, the House Committee on Ways and Means and Committee on Energy and Commerce Subcommittee on Oversight and Investigations both held hearings this year on "combatting" and "cracking down"on fraud in Medicare and Medicaid. Specific concerns over fraud in HHAs and hospices were raised in those hearings, both with regard to the financial impact of fraud on the sustainability of the programs and the negative impact fraudulent actors have on legitimate actors and beneficiary access to care.

In addition to congressional hearings and the potential for legislative action related to fraud, waste and abuse, Congress is likely to continue to engage on these issues as part of the Fiscal Year (FY) 2027 Appropriations process. In CMS's FY27 Budget Justification, sent to Congress in April 2026, anti-fraud efforts were prominently featured, with the CMS Administrator's opening message highlighting the agency's focus on "modernizing our systems to tackle fraud, waste, and abuse with unprecedented precision" and increased funding requested for programs focused on fraud. With all three branches of the federal government engaged, additional and potentially novel, approaches to rooting out fraud, waste and abuse are possible this year, and may further emerge as an issue that candidates focus on as part of the upcoming mid-term elections.

Key Takeaways and Recommendations

• Nationwide provider/supplier enrollment moratoria are now a core CMS enforcement tool. CMS's issuance of three nationwide enrollment moratoria in the past three months signals a marked shift away from the narrower, geographically-targeted enrollment moratoria of the past.

• CMS is explicitly aligning enrollment controls with DOJ enforcement, including enforcement under the FCA. The moratoria notices emphasize DOJ criminal prosecutions and FCA settlements as justification for nationwide action.

• Enhanced CMS scrutiny may portend more payment suspensions during and after the moratoria. Suspensions may be imposed early in an investigation, long before any DOJ or CMS final resolution.

• Enforcement attention may extend beyond federal agencies to states. The administration's contemporaneous warnings to state attorneys general regarding Medicaid antifraud enforcement may increase the likelihood of parallel state investigations and state whistleblower actions.

• Providers and suppliers should strengthen their compliance programs and audit their current enrollment information for accuracy. Investors should also closely assess whether contemplated ownership changes could trigger scrutiny and new enrollment requirements during the moratorium period.

Anna K. Abram, Shawn Maree Bishop,

Kelly Cleary, Mark R. Herring, Colin M. Huntley, John Jacob,

Sara McLean, Parvin Daphne Moyne, Hans Christopher

Rickhoff, Laura Hill, Kandis McClure and Olive

Lee Akin Gump Strauss Hauer & Feld LLP Robert

S. Strauss Tower 2001 K Street, Washington, DC

United States

Tel:+1 202. 887.4000

E-mail: martechbilling@akingump.com

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Footnotes

1 42 C.F.R. §424.570.

2 See 42 C.F.R. §424.570(b)

3 Akin recently advised clients on the DOJ Civil Division's FOCUS Initiative, an anti-fraud program designed to deepen DOJs working relationship with so-called "data-miner" whistleblowers who file FCA qui tam complaints based on "publicly available government data."

4 42 CFR §405.371(a)(2).

Attorneys: Anna K. Abram, Shawn Maree Bishop, Kelly Cleary, Mark R. Herring, Colin M. Huntley, John Jacob, Sara McLean, Parvin Daphne Moyne, Hans Christopher Rickhoff, Laura Hill, Kandis McClure and Olive Lee (Akin Gump Strauss Hauer & Feld LLP).

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