CMS pauses new Medicare hospice and home health provider entries for six months
The Centers for Medicare & Medicaid Services (CMS) announced Wednesday that it would be suspending new companies from enrolling in hospice or home health Medicare programs for six months, in an effort to crack down on what the agency says is an abuse of taxpayer funds caused by “improper billing practices and bad actors entering the system.”
CMS said providers entering these sectors are a “key source of fraudulent activity” and the halt will allow them to address potential waste and abuse in these categories, which it calls “high-risk.”
The agency said improper billing has been a major problem within the home health and hospice industry, and that President Donald Trump’s mission of addressing abuse of federal healthcare programs led to this moratorium.
“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,” CMS Administrator Mehmet Oz, MD, said in a statement. “Today we’re shutting the door on fraud—preventing new bad actors from entering Medicare while we aggressively identify, investigate, and remove those already exploiting them.”
“This is about protecting patients, restoring integrity, and safeguarding taxpayer dollars,” he added.
During the six-month pause, CMS said it will use “advanced data analytics” to fuel its investigation, all with the goal of eliminating providers in these home-care spaces that it suspects are engaged in fraud.
The nationwide scope, the agency said, will help it to “eliminate the ability of bad actor operators” to cross state lines to avoid detection and continue their fraud schemes. The pause will also forbid existing groups from registering new businesses, CMS confirmed.
The focus is entirely on companies and organizations that rely on Medicare billing to operate.
This is the second major pause on new entries into the healthcare space from CMS. In February, $260M in Medicaid funds were deferred from medical device companies. The justification cited was ongoing fraud cases related to numerous daycare facilities in Minnesota, that were thought to be receiving federal funds without providing services.
California hit hard by latest pause
In Los Angeles alone, CMS said its actions have suspended Medicare payments to 773 hospice and 21 home care groups, totalling $70 million.
Looking at Medicaid, the agency confirmed that over $1.3 billion would be withheld from the state, as the Trump administration accused leaders in California of not taking fraud seriously.
Oz said the deferral is the largest in history, designed to get state officials to react and take action.
The facts are fuzzy at the moment, with the federal government and state at odds. It remains unclear how rampant Medicare fraud is.
Vice President JD Vance has taken a particular interest in California, a Democrat-run state. Though he did confirm all 50 states have been asked to audit their Medicaid program.
This is a developing story.
Chad is an award-winning writer and editor with over 15 years of experience working in media. He has a decade-long professional background in healthcare, working as a writer and in public relations.