CMS Moratorium Leaves HHA, Hospice and Home Care Agencies with Uncertainty
On May 13, 2026, the Centers for Medicare & Medicaid Services (CMS) implemented a nationwide moratorium on new enrollments of home health agencies (HHAs) and hospice agencies. While this moratorium, which is intended to reduce fraud and misuse of resources, prohibits any new HHAs and hospices from enrolling in Medicare or generally changing majority ownership, subsequently creates new compliance challenges for new Medicaid enrollments or changes of ownership involving home care agencies.
Moratorium
Motivated by incidents of fraud, waste and abuse among home health agencies and hospices, CMS implemented a six-month moratorium on new Medicare enrollments or changes in majority ownership, as defined at 42 C.F.R. §424.550(b), that will end on Nov. 13, 2026, unless CMS exercises its right to extend the moratorium for additional six-month periods. The moratorium has far-reaching effects, causing confusion and difficulties for providers desiring to change locations or open a satellite location. Specifically, fears exist that CMS may interpret location changes as forming and operating a new provider, which is prohibited under the moratorium, rather than as an extension of an existing provider. However, the moratorium does not prohibit Medicare-enrolled HHAs and hospices from merging into or acquiring other Medicare-enrolled providers, so long as no new locations are added and there is no change in majority ownership as defined at 42 C.F.R. §424.550(b).
Change in Majority Ownership
Under 42 C.F.R. §424.550(b), a change in majority ownership occurs if an HHA or hospice provider engages in a stock transfer, asset sale, merger or consolidation that results in a change in majority ownership within 36 months of its initial Medicare enrollment or its most recent change in majority ownership. There are limited exceptions, such as the death of an owner, but otherwise a change in majority ownership cannot occur until 36 months after the HHA or hospice was initially enrolled in Medicare or last experienced a change in majority ownership, whichever is later.
Effects on Medicaid Providers
CMS is allowing each state to determine whether its Medicaid program should implement a similar moratorium, which could affect HHAs, hospice providers or home care agencies enrolled in Medicaid and/or CHIP programs. This can create complexities for Medicaid- or CHIP-enrolled HHA, hospice or home care agencies that operate across state lines, seek to open new locations or sell a majority of their ownership.
Home care agencies may be enrolled in Medicaid or be reimbursed directly by the patient, and provide non-medical, non-skilled services that help individuals live independently in their own homes. Such services include meal prep, laundry, house cleaning and personal grooming. These services do not require the skills of a licensed health care professional or a physician’s prescription, and the agencies that provide them are often enrolled in a state’s Medicaid waiver program. While home care agencies are similar to HHA and hospice providers, states treat each provider differently when deciding which type of provider should be affected by a moratorium on Medicaid enrollments. Medicaid-enrolled home care agencies may still undergo a change of ownership (but not an initial enrollment) during the moratorium in certain states, such as Ohio, that do not categorize home care agencies with hospices or HHAs and do not subject them to the moratorium.
Specifically, Pennsylvania currently allows new home care agency Medicaid enrollments but otherwise implemented a six-month moratorium on new Medicaid-enrolled hospice agencies. Home care agency and hospice owners operating in multiple states have the burden of understanding what each jurisdiction permits and may have to delay strategic plans due to a specific state moratorium, even if the home care agency or hospice also operates in a state that doesn’t enforce a similar moratorium. Adding to that complexity, state regulatory guidance remains dynamic and can change at any time.
HHA, hospice and home care agency providers should be aware that the moratorium is an attempt to curb suspected fraud, waste and abuse, and it is expected that states and the federal government will be examining these providers closely now and in the future. Strict compliance with federal and state regulations, as applicable, is important to avoid costly penalties or loss of licensure that may be impossible to regain during the moratorium.
