The Centers for Medicare and Medicaid Services (“CMS”) recently announced new healthcare fraud measures that include the imposition of a six-month moratorium on provider enrollments of new durable medical equipment, prosthetics, orthotics, and supplies (“DMEPOS”) suppliers.1 This means that new DMEPOS suppliers will not be able to enroll for the first time in the Medicare program until the moratorium terminates. The moratorium became effective February 27, 2026.
In addition, CMS announced that it will publish information on providers/suppliers whose participation has been revoked, including information on the reason for the revocation.
CMS may impose enrollment moratoriums when it determines it is necessary to prevent or combat fraud, waste, or abuse under Medicare, Medicaid or the Children’s Health Insurance Program (“CHIP”).2 CMS has issued several prior enrollment moratoria (for certain home health agencies and ambulance suppliers), which were extended upon the expiration of the initial six-month period. These moratoria are not currently in place.
CMS has had long-standing concerns regarding healthcare fraud conducted by individuals and companies in the DMEPOS industry. In the Federal Register notice, CMS detailed numerous incidents of criminal fraud convictions by DMEPOS suppliers.
The moratorium does not apply to DMEPOS suppliers whose principal function is NOT the provision of DMEPOS, such as grocery stores, pharmacies, or medical providers.
The imposition of this moratorium follows the imposition of additional anti-fraud provisions on DMEPOS suppliers. Effective January 1, 2026, CMS imposed a new requirement for DMEPOS suppliers that a majority change in the direct ownership (through stock sales, asset sales, etc.) within 36 months of the last change requires that the DMEPOS supplier enroll as a new supplier in the Medicare program (the “36 Month Rule”).
The moratorium does NOT apply to the following:
- Changes in practice location;
- Changes in provider or supplier information such as phone number or address; or
- Changes in ownership (except those subject to the 36-month rule specified above).
Tips for DMEPOS Anticipating Potential Ownership Changes When Sale Is Anticipated Within Three Years
- Promptly report changing information within legal deadlines. Delayed reporting of changes of ownership could inadvertently end up triggering issues from an enrollment perspective beyond penalties for late reporting now that the moratorium is in place;
- Prior to making ownership changes, work with counsel to identify a structure that would not trigger the 36-month Rule to properly avoid application of the enrollment moratorium; and
- Watch for updates to the moratorium.
