CMS Announces Six-Month Enrollment Moratorium for Hospices and Home Health Agencies: What Providers Need to Know
On May 13, 2026, CMS announced a six-month nationwide enrollment moratorium for hospices and home health agencies (“HHAs”) as part of its crackdown on fraud. The moratorium applies to all applications for initial Medicare enrollment and certain changes in majority ownership. During this period, CMS has vowed to intensify targeted investigations and accelerate the removal of hospice and HHA providers from the Medicare program that CMS suspects are engaging in fraudulent activity.
While current providers can continue delivering services to Medicare beneficiaries, we are already seeing this initiative negatively impacting existing providers.
Beyond the Moratorium: The Bigger Picture
The enrollment freeze is part of a larger enforcement escalation that includes revoking and deactivating hundreds of hospices and HHAs engaged in what CMS characterizes as improper or fraudulent activity, conducting nationwide site visits to verify operations and identify suspicious activity, launching a publicly available hospice scoring system designed to flag providers with concerning utilization, quality, or compliance patterns, implementing enhanced enrollment screening for high-risk HHAs including site verification and fingerprint-based background checks, and placing heightened oversight on newly enrolled Medicare hospice providers in Arizona, California, Georgia, Ohio, Nevada, and Texas; states the agency has identified as having elevated fraud risk.
What We're Seeing on the Ground
Though the administration says it is going after bad actors, our firm has seen this investigation result in widesweeping ADRs, Medicare payment suspensions, and revocation letters hitting hospice and HHA providers across the board.
For hospices specifically, the justification is almost always the same: a live discharge rate that CMS deems too high. As hospice providers know, patients revoke hospice for any number of legitimate reasons: choosing to pursue curative treatment, a condition that stabilizes or improves, transfer to another provider, or family taking patients to the hospital in a panic. All of these scenarios are beyond a hospice’s control, yet CMS is using these scenarios to justify suspensions and revocations at scale.
There are absolutely bad actors in this space. But right now, even providers doing everything by the book are getting caught in the crossfire.
The M&A Fallout
This enforcement wave is also creating serious collateral damage in hospice and HHA transactions. Our firm has seen a sharp increase in buyers and sellers seeking counsel after deals have closed because a Medicare suspension or revocation letter arrived shortly after the acquisition. Buyers want their money back and sellers are maintaining they had no knowledge of compliance issues or pending claims and pointing to "as-is" purchase provisions. It is true that CMS does not generally provide advance warning prior to a suspension. This also means a buyer may have conducted reasonable diligence and still had no way to anticipate that CMS would flag the provider post-closing. At the end of the day, the issue comes down to the strength of the purchase agreement; agreements that do not contemplate the allocation of risk in these scenarios are leading parties to litigation.
With CMS publicly announcing a nationwide fraud crackdown and an explicit commitment to remove providers from the Medicare program, buyers can no longer credibly claim they were unaware of the enforcement risk. For anyone considering a hospice or HHA acquisition right now, agreements need to be drafted with properly tailored representations and warranties, indemnification provisions, and contemplated post-closing events. Buyers and sellers alike need to account for the reality that CMS may target a provider regardless of what the books and records look like.
The California Landscape
The enforcement climate is particularly aggressive in California. CMS has already suspended payments to 773 hospices and 23 HHAs in Los Angeles alone, representing $70 million in frozen funds. For providers operating in this state, the message from CMS could not be clearer; proceed with caution.
What Providers Should Do Now
Providers should be scrutinizing their documentation practices, billing patterns, enrollment status, and ownership structures now in anticipation of an ADR or suspension letter.
For those considering a hospice or HHA acquisition or sale, the purchase agreement must account for this enforcement climate. Standard terms are no longer sufficient.
If you have already received an ADR, payment suspension, or revocation letter, the response matters. They require a strategic, well-documented response that puts on the record that your entity is not engaging in fraudulent practices.
HealthWise Legal, APC represents hospice, home health, and other healthcare providers facing Medicare audits, ADRs, payment suspensions, and revocation actions. If your organization is navigating this enforcement environment, contact our firm to discuss your compliance posture and response strategy.
