CMS Freezes New Medicare Enrollments for Home Health Agencies
On May 13, 2026, the Centers for Medicare and Medicaid Services (CMS) announced a nationwide freeze on new Medicare enrollments for home health agencies. This moratorium, aimed at addressing AI-driven prior authorization delays and fraud issues, will initially last six months, with potential six-month extensions. While the moratorium blocks new enrollments, it does not prevent changes in provider information, such as phone numbers or addresses, nor ownership changes, except those affected by the “36-Month Rule.”
Home health agencies have been flagged by CMS as high-risk for potential fraud, waste, and abuse within the Medicare program. Historically, CMS implemented a similar moratorium in certain counties across Florida, Illinois, Michigan, and Texas from July 31, 2013, to January 30, 2019. In conjunction with moratoriums, CMS has enforced stringent regulatory compliance requirements for Medicare enrollment, which include reserve operating funds and increased fingerprinting for significant stakeholders.
The “36-Month Rule” Impact
The “36-Month Rule” significantly influences ownership changes regulation. Agencies that experience more than 50% direct ownership changes due to sales or mergers within 36 months of initial enrollment must reenroll in Medicare, unless they satisfy specific exceptions. New home health agencies encounter increased scrutiny through measures like prepayment reviews and payment caps.
Due to the ongoing high risks to program integrity in areas with increasing enrollments, such as a 40% surge in Los Angeles County from 2019 to 2023, CMS has emphasized these concerns. Similar enrollment increases are noted in Ohio, Michigan, Nevada, North Carolina, and Texas. Although past efforts were made, CMS concludes that previous strategies have not effectively mitigated fraud risks, necessitating the current nationwide enrollment freeze.
The moratorium solely affects Medicare enrollments, having no impact on Medicaid or the Children's Health Insurance Program (CHIP). State governments have the discretion to decide whether to extend the moratorium to Medicaid or CHIP programs. The restriction, which applies to branch locations of home health agencies, stipulates that pre-existing applications will still be processed. Agencies undergoing ownership changes under the “36-Month Rule” will face hurdles in re-enrolling during this period. Therefore, industry stakeholders must carefully evaluate the effects of this temporary moratorium on their operations.