CMS Freezes New Hospice and Home Health Medicare Enrollment in Sweeping Fraud Crackdown

The Centers for Medicare & Medicaid Services (CMS) announced a six-month, nationwide moratorium on new Medicare enrollment for hospice agencies and home health agencies (HHAs). The pause applies to all 50 states, the District of Columbia, and U.S. territories — and it comes in direct response to what federal officials describe as systemic, organized fraud that has stolen billions from Medicare while preying on some of America's most vulnerable older adults.

What the Moratorium Does — and Doesn't Do

Let's start with what this freeze actually means for patients and families.

If you or a loved one is currently receiving hospice or home health care from a Medicare-enrolled provider, nothing changes. CMS has been explicit: existing providers are not affected and may continue delivering services without interruption. The moratorium applies only to new enrollment applications submitted on or after May 13, 2026.

Any provider whose Medicare enrollment application was already received by a Medicare contractor before that date is also exempt. The freeze also does not affect most standard changes of ownership — though it does block certain majority ownership changes within 36 months of a provider's initial enrollment, a structure that investigators have identified as a common fraud tactic used to obscure control by bad actors.

In short: if your care team is already enrolled in Medicare, your care continues. The door is closed only to those trying to get in now.

Scale of the Problem

To understand why CMS took this step, you need to understand just how dramatic the fraud problem has become. The HHS Office of Inspector General (OIG) estimated suspected hospice fraud at $198.1 million in fiscal year 2023 alone. The improper payment error rate for home health claims that same year was 7.7 percent — roughly $1.2 billion in a single year, according to a congressional inquiry into the issue.

In Los Angeles County, the numbers are almost incomprehensible. From 2019 through June 2023, the number of home health agencies nationwide actually declined by 6 percent. In Los Angeles County during that same period, HHAs grew by 46 percent. More than 1,400 new LA County HHAs enrolled in Medicare in the span of five years — representing more than 50 percent of all HHAs in the state of California and nearly 14 percent of all HHAs in the entire country.

Home health payments in Los Angeles County reached $1.7 billion in 2024, nearly double 2018 levels. The number of agencies billing Medicare in the county surged from 655 to 1,800.

Federal agents suspended 447 hospices and 23 home health organizations in the greater Los Angeles area in April 2026, alleging they defrauded Medicare of an estimated $600 million. CMS had already suspended payments to 773 hospices and 23 HHAs in LA alone, representing $70 million in suspended funds at the time of the moratorium announcement.

"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 Dr. Mehmet Oz.

How Fraudsters Operated — and Why It Matters to Seniors

The fraud schemes prosecutors have uncovered are not minor billing irregularities. They are organized criminal enterprises targeting elderly Medicare beneficiaries.

Investigators have identified recurring patterns: recruiting patients who do not qualify for hospice or home health services; falsifying medical documentation to manufacture eligibility; billing for services never rendered; and kickback arrangements that generated illegal patient referrals in violation of the federal Anti-Kickback Statute.

In one case, a man was sentenced in May 2025 to 12 years in prison after defrauding Medicare out of $17 million through sham hospice companies. In 2026, eight defendants were arrested in a single sweeping takedown for $50 million in alleged fraudulent hospice billing in California's Central District.

CMS referred 343 cases to law enforcement for suspected fraud in 2025, representing $3.4 billion in fraudulent billing activity. Roughly 4,780 providers and service suppliers had their Medicare billing privileges revoked that year for inappropriate behavior.

Importantly, when California attempted to address the problem on its own by imposing a state-level moratorium on new hospice licensure, the fraud didn't stop — it migrated.

"When California imposed a moratorium on new hospice licensure, the fraud did not stop," testified Sheila Clark, president and CEO of the California Hospice & Palliative Care Association, before the U.S. House Ways & Means Committee in April 2026.

"It shifted into home health licensing. In 2025 alone, 310 home health agencies enrolled in Medicare in LA County. Let me be clear, this is not organic growth. It is fraud displaced from one Medicare benefit to another." — Sheila Clark.

That testimony was part of the case for a nationwide approach — one that closes multiple doors at once.

A Coordinated Federal Response

The moratorium is not a standalone action. CMS rolled it out in coordination with Vice President JD Vance's Anti-Fraud Task Force, with roughly 10 federal agencies participating, including the U.S. Department of Justice. It follows a similar moratorium CMS implemented earlier in 2026 on certain durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) companies suspected of fraud. With three separate moratoria now in place, CMS says it has taken some of the most significant fraud prevention actions in the agency's history.

During the six-month freeze, CMS says it will intensify targeted investigations, deploy advanced data analytics, and accelerate the removal of hospice and HHA providers already suspected of fraud. The agency is also:

• Revoking or deactivating hundreds of hospices and HHAs engaged in improper activity
• Conducting nationwide hospice site visits to verify operations and identify suspicious activity
• Heightening oversight of newly enrolled hospice providers in Arizona, California, Georgia, Ohio, Nevada, and Texas
• Launching a new, publicly available hospice scoring system to identify providers with troubling billing, quality, or compliance patterns
• Implementing enhanced enrollment screening for high-risk HHAs, including site verification and fingerprint-based background checks
• Expanding pre- and post-claim review of HHA claims in Florida, Illinois, Oklahoma, Ohio, North Carolina, and Texas

The agency also noted that in fiscal year 2025, total Medicare program integrity savings surged 59 percent — from $26.3 billion in FY 2024 to a record $41.9 billion in FY 2025. The Medicare return on investment from those integrity efforts reached $22.30 for every $1 spent.

Concern for Legitimate Providers and Underserved Communities

Not everyone has welcomed the moratorium without reservation. Before CMS announced the freeze, several state hospice associations — including the Florida Hospice & Palliative Care Association, the Association for Home & Hospice Care of North Carolina, and the South Carolina Home Care & Hospice Association — wrote to CMS expressing concern that a nationwide freeze could impede the development of new, legitimate hospice programs in areas where capacity is genuinely needed among underserved aging populations.

The American Hospital Association (AHA) echoed that concern after the announcement, noting that many rural and underserved areas already struggle to find appropriate discharge locations for patients, and that home health agencies and hospices are essential to ensuring timely and safe next levels of care. The AHA recommended CMS consider a more targeted, data-driven approach to identify bad actors while allowing quality care providers to continue serving Medicare beneficiaries.

CMS has built in some flexibility. Under federal regulations, the agency may extend the moratorium in six-month increments if the underlying conditions persist — meaning stakeholders should prepare for the possibility that this freeze lasts beyond November 2026.

What This Means

Here's the bottom line for families thinking about aging, caregiving, and long-term care: the fraud problem in hospice and home health is real, it is massive, and it has real consequences for the older adults it targets.

Seniors enrolled in sham hospice or home health programs by fraudsters weren't just victimized by paperwork fraud. In many cases, they were steered away from the legitimate care they actually needed. Every dollar stolen from these programs is a dollar not spent on a real patient who genuinely needed help.

For families planning for aging and retirement, this news underscores a critical point: the availability and quality of home-based care services cannot be taken for granted. Bad actors have flooded parts of the market, degrading trust and resources across the system. Planning for long-term care — including understanding what Medicare does and doesn't cover — matters more than ever.

Medicare does not cover most long-term care services, including custodial care that helps with activities of daily living such as bathing, dressing, personal hygiene, and eating. Long-Term Care Insurance remains one of the most reliable tools for ensuring access to quality, licensed care, whether at home, in an assisted living facility, or in a skilled nursing facility, without relying on a system under serious strain.

Many Long-Term Care Insurance policies will also pay for hospice benefits, if necessary, beyond the period that Medicare or health insurance will pay.

Use the LTC News Cost of Care Calculator to understand what extended care costs in your area, explore the LTC News Long-Term Care Insurance Learning Center to learn more about your planning options, or find a licensed care provider near you through the LTC News Caregiver Directory.