Earlier this week, Centers for Medicare & Medicaid Services (CMS) announced a six-month nationwide moratorium, effective May 13, 2026, on new Medicare enrollment for home health agencies and hospices, which will materially affect growth and transaction planning across the sector. The key takeaways are immediate: de novo Medicare enrollment-based expansion is paused nationwide, pending applications and existing provider numbers will require careful diligence, and ownership-change structures should be evaluated early because initial-enrollment triggers may affect transaction feasibility. CMS imposed the six-month pause under its authority to restrict enrollment to prevent or combat fraud, waste, or abuse where CMS determines that a significant potential for such risk exists.
What the Moratoria Do
In practical terms, the enrollment freeze bars new Medicare enrollment for home health agencies, home health agency branches and practice locations, hospices, and hospice practice locations nationwide unless the applicable Medicare contractor received the enrollment application before May 13, 2026.
The freeze is initially effective for six months, may be extended in six-month increments, and may be lifted earlier if CMS determines that applicable regulatory criteria are satisfied.
The notices also identify limited exclusions, including certain changes in practice location, changes in provider or supplier information, and changes in ownership. However, the exceptions do not encompass ownership changes for home health agencies, hospices, or DMEPOS suppliers that require an initial enrollment.
CMS’s Stated Rationale
CMS framed the enrollment freeze as a program-integrity measure. Although the notices apply to both sectors, CMS identified somewhat different concerns for each. For home health, CMS cited longstanding fraud risks, abnormal enrollment growth, and co-location patterns that are viewed as indicators of potential program-integrity risk. For hospice, CMS pointed to HHS-OIG concerns regarding quality and billing practices, enrollment without beneficiary consent, ineligible certifications, kickback and recruiter schemes, sale-driven hospice formation, and rapid growth in certain states. CMS also justified taking a nationwide approach, rather than targeting specific markets, because it believes fraud schemes can shift geographies when enforcement focuses on particular markets.
Business and Transactional Implications
The enrollment freeze may affect de novo expansion models, organic growth plans, market-entry strategies, development-stage platforms, and transactions whose post-closing value depends on new Medicare-enrolled agencies, branches, or practice locations. Existing Medicare-enrolled operations may become more strategically valuable because currently enrolled providers may continue furnishing services, although CMS stated that the freeze restricts their ability to add branches or new practice locations.
Organizations pursuing expansion should account for the possibility that the enrollment freeze could last longer than the initial six-month period given CMS’s emphasis on continuing program-integrity concerns in both sectors.
The moratoria may also have significant implications for acquisitions, roll-ups, joint ventures, and other transactions involving home health agencies or hospices. CMS’s regulations generally allow changes in ownership to proceed notwithstanding an enrollment moratorium, but the notices expressly exclude changes in ownership of home health agencies, hospices, and DMEPOS suppliers that would require an initial enrollment. Accordingly, transaction parties should carefully analyze whether a proposed change in ownership or change in majority ownership will be treated as a continuation of an existing enrollment or will require a new initial Medicare enrollment.
This issue is particularly important because CMS highlighted the 36-month change-in-majority-ownership rule for both home health agencies and hospices: a non-exempt change in majority ownership within 36 months of initial enrollment or the most recent change in majority ownership can require the provider to enroll as a brand-new provider, undergo survey or accreditation, and terminate its current enrollment and provider agreement. If that occurs while the freeze is in place, reenrollment would be barred because it would be treated as an initial enrollment.
Buyers, sellers, lenders, and investors should front-load enrollment diligence to confirm the target’s Medicare enrollment status, application timing, ownership history, and whether the transaction or post-closing plan would require a new initial enrollment.
Pending transactions may require updates to closing conditions, purchase price assumptions, representations and warranties, interim operating covenants, financing assumptions, termination rights, and post-closing expansion plans, especially where the deal structure could trigger a new initial enrollment requirement. Transactions involving already enrolled providers may be less disruptive if they do not trigger initial enrollment, but parties should still evaluate whether the transaction or integration plan requires restricted Medicare enrollment action.
Medicaid and CHIP Considerations
CMS did not impose a parallel mandatory Medicaid or CHIP moratorium in either notice, but it noted that states may decide whether a Medicaid or CHIP enrollment pause is appropriate and encouraged state-level restrictions tailored to beneficiary populations and geographic considerations. Providers with Medicaid or CHIP business lines should therefore monitor state-level developments in addition to the federal Medicare moratoria.
What Providers and Investors Can Do Now
Home health and hospice providers, investors, lenders, and strategic acquirers should promptly evaluate whether pending or planned Medicare enrollment activity is affected by the freeze. They should identify pending applications and confirm whether the applicable Medicare contractor received them before May 13, 2026. Transaction parties should analyze whether the deal structure could trigger an initial enrollment requirement, particularly if the target is within 36 months of initial enrollment or a prior change in majority ownership. Parties pursuing organic growth should revisit development timelines and related assumptions, including whether growth depends on adding Medicare-enrolled locations while the freeze remains in place.
Key Action Items
- Reassess de novo expansion plans, branch additions, new practice locations, and development timelines that depend on new Medicare enrollment during the enrollment freeze.
- Front-load diligence on existing Medicare provider numbers, ownership history, and whether a proposed transaction could trigger a new initial enrollment requirement.
- Revisit pending transaction documents for closing conditions, purchase price assumptions, representations and warranties, interim covenants, financing assumptions, termination rights, and post-closing expansion plans.
- Monitor potential extensions of the Medicare moratoria and state-level Medicaid or CHIP moratorium activity.
