Trump Administration Prioritizes Affordability by Announcing Major Crackdown on Health Care Fraud. On February 25, 2026, the current administration announced new steps to crack down on fraud in Medicare and Medicaid to protect patients and taxpayers and improve affordability. The actions include:
- Deferring $259.5 million of quarterly federal Medicaid funding in Minnesota to prevent payment of questionable claims while further investigation is completed
- A nationwide moratorium on Medicare enrollment for certain Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) suppliers
- A nationwide call to action for Americans to support fraud prevention, including stakeholder input on how CMS can continue to expand and strengthen its efforts.
Together, these steps reflect a coordinated, data-driven strategy to prevent fraud before it occurs, hold bad actors accountable, and protect taxpayer dollars.
Of particular interest to our clients is the DMEPOS moratorium.
Nationwide DMEPOS Enrollment Moratorium/Medicare Program Integrity Initiatives
CMS is taking decisive steps to prevent fraudulent Medicare billing by durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) companies. A six-month moratorium on new Medicare enrollment for certain DMEPOS suppliers builds on CMS’ stopping more than $1.5 billion in suspected fraudulent billing in this area last year. The DMEPOS supplier enrollment moratorium will allow CMS to explore additional safeguards to further mitigate longstanding instances of fraud, waste, and abuse perpetrated by certain DMEPOS companies. It applies to all applications for initial enrollment and changes in majority ownership for medical supply companies.
CMS also plans to publish information on providers/suppliers whose participation in the Medicare program has been revoked, including their National Provider Identifier and the reason for the revocation. According to CMS, this additional transparency will allow patients and payers, including private insurers, to understand which providers have been subject to such administrative enforcement action by the government.
Again, according to CMS, when they adjust payment rates to better align with market prices and clinical value, it decreases unnecessary or inflated payments for high-cost products. Because Medicare Part B premiums are set to cover a portion of projected program costs, lowering spending on expensive items like certain skin substitutes directly reduces total expenditures. As a result, these savings contribute to slower premium growth and help keep out-of-pocket costs more affordable for beneficiaries while maintaining access to medically necessary treatments.
In determining whether to establish an enrollment moratorium, CMS considers whether a high risk of fraud, waste, or abuse exists. CMS relies on its and law enforcement’s longstanding experience with ongoing and emerging fraud trends and activities gained through civil, criminal, and administrative investigations and prosecutions.
Etiology
The HHS-OIG has highlighted the issue of DMEPOS supplier fraud, waste, and abuse in numerous reports. In evaluating the need for the subject moratorium, CMS has also used data analysis that included reviewing both current and historic Medicare enrollment and claims data. They analyzed key metrics pertaining to enrollment volume and trends for the more than 80 types of DMEPOS suppliers in the Medicare FFS program. They also analyzed indicators of fraud, waste, and abuse, such as the percentages of DMEPOS suppliers within each type that had a revocation of Medicare billing privileges, payment suspension based on a credible allegation of fraud or reliable indication that an overpayment exists, law enforcement referral, investigation, or benefit integrity unit (BIU) complaint since 2023.
The following anecdotal issues were raised as evidence for this action by CMS:
- DMEPOS fraud schemes do not necessarily follow a consistent pattern but can vary widely in their particular facts.
- Medicare paid for OTS braces that were—
- Ordered by suppliers that did not have treating relationships with beneficiaries; and
- Marketed to beneficiaries by telemarketers using prohibited direct solicitation.
- Improperly Paid Suppliers for Intermittent Urinary Catheters
- Convictions that involved medical supply company specialties:
- A California woman was sentenced in December 2023 to 15 years in prison for billing Medicare for over $24 million by submitting fraudulent claims for medically unnecessary DME—mostly power wheelchairs (PWC)—and PWC repairs.
- Medicare paid a supplier over $600,000 for medical braces furnished to Medicare beneficiaries related to DMEPOS prescriptions that the supplier illegally purchased from marketing companies.
- A California father and son in March 2024 were sentenced to prison for their roles in fraudulently receiving over $21 million in Medicare payments.
- A Texas man was sentenced to prison in February 2024 for conspiring to pay health care kickback payments for unnecessary DME, resulting in over $20 million in claims to—and $13 million in payments from—the Medicare program.
- A Florida man illegally paid kickbacks of over $565,000 to buy fraudulent DMEPOS orders, including orders purportedly “signed” by physicians who, in fact, never signed or authorized these orders.
- Several DMEPOS suppliers in January 2024 agreed to pay $2.1 million to resolve allegations that they violated the False Claims Act by submitting false claims for payment to Medicare and other federal health care programs. The settlement resolved allegations that over a 9-year period, the companies:
- Sold used beds but billed federal health care programs as if they were new beds.
- Sold various hospital beds and pressure support surfaces to beneficiaries of federal health care programs under a miscellaneous code, which sometimes resulted in the federal program paying a higher price.
- Presented claims to the federal government and its contractors that mischaracterized travel time as DMEPOS repair time in order for it to be reimbursable by federal health care programs.
- A Florida man was sentenced to 87 months in prison in September 2022 for his role in using a DMEPOS company to commit Medicare and Medicaid fraud.
- A South Carolina man was sentenced to 9 years in prison in March 2024 for his role in a nearly $100 million healthcare fraud scheme.
- A Florida diabetic shoe company and its president agreed in January 2022 to pay over $5.5 million to settle claims brought under the False Claims Act that it sold custom diabetic shoe inserts that were not actually custom-fabricated in accordance with Medicare standards.
Consultation With Law Enforcement and Moratorium Determination
In light of these concerns, pursuant to our consultations with both the OIG and the Department of Justice under § 424.570(a)(2)(iv) regarding a DMEPOS moratorium, CMS has determined that medical supply companies have significant potential for fraud, waste or abuse. CMS believes that a moratorium on the enrollment of medical supply companies into Medicare could assist in stemming this activity.
Access to Care
CMS and their state partners have stated that beneficiary access to care in Medicare, Medicaid and CHIP is of critical importance, and they believe they have carefully evaluated access to care for Medicare beneficiaries nationwide – and access will not be impeded.
When a Temporary Moratorium Does Not Apply
Under § 424.570(a)(1)(iii), a temporary moratorium does not apply to any of the following:
- Changes in practice location (except if the location is changing from a location outside the moratorium area to a location inside the moratorium area).
- Changes in provider or supplier information, such as phone number or address.
- Changes in ownership (except changes in ownership of home health agencies that would require an initial enrollment).
More information on the DMEPOS moratorium can be found via the Federal Register at: https://www.federalregister.gov/public-inspection/2026-03971/medicare-medicaid-and-childrens-health-insurance-programs-nationwide-temporary-moratoria-on.