CMS blocks new Medicare providers to combat hospice fraud
MARYLAND, UNITED STATES — The Centers for Medicare & Medicaid Services (CMS) has imposed a six-month freeze on new Medicare enrollment for hospice and home health agencies — citing fraud patterns that have gone unchecked for more than two decades.
According to a report from Healthcare Dive, the suspension, effective May 2026, halts new applications and certain majority ownership transfers. Existing enrolled providers are unaffected.
New enrollment freeze targets fraud-ridden sectors
The numbers behind the crackdown are striking. Nevada recorded a 151% increase in hospice providers between 2019 and 2023. California logged a 126% surge over the same period.
In Los Angeles County alone, home health providers grew by more than 40% between 2019 and 2024 — driven by low startup costs and limited regulatory oversight.
The fraud pattern is direct: certify ineligible beneficiaries, pay recruiters to enroll non-qualifying patients, and bill Medicare.
“We’ve seen systemic and deeply troubling fraud in the hospice and home health space, with bad actors exploiting some of our most vulnerable Medicare patients and stealing money from the American taxpayer,” said CMS Administrator Dr. Mehmet Oz.
During the moratorium, CMS plans to deploy advanced analytics, run targeted investigations, and fast-track removal of suspected fraudulent operators.
The agency imposed a parallel six-month freeze on durable medical equipment suppliers in February 2026 — part of a broader anti-fraud push that has already withheld $250 million from Minnesota in Medicaid investigations.
Provider operations squeezed by enrollment freeze
For hospitals routing post-discharge patients to home-based care, the freeze creates a tangible operational problem.
Jennifer Sheets, CEO of the National Alliance for Care at Home, warned the action could “reduce competition” and “increase wait times” in rural areas where hospice and home health capacity is already strained.
Hospital discharge planners and care coordination teams will need to revalidate their referral networks and capacity assumptions — quickly.
Not everyone objects.
Tom Koutsoumpas, founder and CEO of the National Partnership for Healthcare and Hospice Innovation, backed the crackdown, saying bad actors “undermine public trust” and exploit the most vulnerable patients in the system.
As CMS expands fraud enforcement across Medicare and Medicaid, the compliance burden on legitimate providers continues to grow.
Healthcare outsourcing, a multibillion-dollar sector covering revenue cycle management (RCM), medical coding, prior authorization, claims processing, and clinical documentation — has seen accelerated adoption as health systems look to separate administrative complexity from care delivery.
For providers managing multiple payer contracts and tightening regulatory requirements, outsourced back-office support offers one scalable pathway to absorb the pressure without adding permanent headcount.
