[Federal Register Volume 91, Number 94 (Friday, May 15, 2026)]
[Notices]
[Pages 27946-27954]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2026-09718]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
[CMS-6102-N]
Medicare, Medicaid, and Children's Health Insurance Programs:
Announcement of Nationwide Temporary Moratorium on Enrollment of
Hospices
AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of
Health and Human Services (HHS).
ACTION: Notice.
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SUMMARY: This notice announces the imposition of a 6-month nationwide
moratorium on the Medicare enrollment of hospices.
DATES: This moratorium is effective on May 13, 2026.
FOR FURTHER INFORMATION CONTACT: Frank Whelan, (410) 786-1302.
SUPPLEMENTARY INFORMATION:
I. Background
A. CMS' Authority To Impose Temporary Enrollment Moratoria
1. Statutory and Regulatory Background
Under the Patient Protection and Affordable Care Act (Pub. L. 111-
148), as amended by the Health Care and Education Reconciliation Act of
2010 (Pub. L. 111-152) (collectively known as the Affordable Care Act),
Congress provided the Secretary with new tools and resources to combat
fraud, waste, and abuse in Medicare, Medicaid, and the Children's
Health Insurance Program (CHIP). One of these was section 6401(a) of
the Affordable Care Act, which added a new section 1866(j)(7) to the
Social Security Act (the Act). It provided the Secretary with authority
to impose a temporary moratorium on the enrollment of new fee-for-
service (FFS) Medicare, Medicaid or CHIP providers and suppliers
(including categories of providers and suppliers) if the Secretary
determines that a moratorium is necessary to prevent or combat fraud,
waste, or abuse under these programs.
Section 6401(b) of the Affordable Care Act added specific
moratorium language applicable to Medicaid at section 1902(kk)(4) of
the Act, requiring States to comply with any moratorium imposed by the
Secretary unless the state determines that the imposition of such
moratorium would adversely impact Medicaid beneficiaries' access to
care. Section 6401(c) of the Affordable Care Act amended section
2107(e)(1) of the Act to provide that all the Medicaid provisions in
sections 1902(a)(77) and 1902(kk) also apply to CHIP.
In February 2011, in accordance with the aforementioned authority,
CMS published a final rule with comment period titled, ``Medicare,
Medicaid, and Children's Health Insurance Programs; Additional
Screening Requirements, Application Fees, Temporary Enrollment
Moratoria, Payment Suspensions and Compliance Plans for Providers and
Suppliers'' (76 FR 5862). This final rule implemented section
1866(j)(7) of the Act by establishing new regulations at 42 CFR
424.570. Under Sec. 424.570(a)(2)(i) and (iv), CMS--or CMS in
consultation with the Department of Health and Human Services Office of
Inspector General (HHS-OIG), the Department of Justice (DOJ), or both--
may impose a temporary moratorium on newly enrolling Medicare providers
and suppliers if CMS determines that there is a significant potential
for fraud, waste, or abuse with respect to a particular provider or
supplier type, particular geographic areas, or both.
2. Particulars of a Moratorium as Outlined in Sec. 424.570
a. Length
Per Sec. 424.570(b), a temporary enrollment moratorium imposed by
CMS remains in effect for 6 months. If CMS deems it necessary, the
moratorium may be extended in 6-month increments. CMS evaluates whether
to extend or lift the moratorium before the end of the initial 6-month
period and, if applicable, before the expiration of any subsequent
moratorium period. If the moratorium announced in this notice is
extended, CMS will publish a document regarding such extension(s) in
the Federal Register.
b. Cessation
As provided in Sec. 424.570(d), CMS may lift a moratorium at any
time if: (1) the President declares an area a disaster under the Robert
T. Stafford Disaster Relief and Emergency Assistance Act; (2)
circumstances warranting the imposition of a moratorium have abated or
CMS has implemented program safeguards to address the program
vulnerability; (3) the Secretary has declared a public health
emergency; or (4) in the judgment of the Secretary, the moratorium is
no longer needed. Once a moratorium is lifted, the provider or supplier
types that were unable to enroll because of the moratorium will be
assigned to the ``high'' screening level in accordance with Sec. Sec.
424.518(c)(3)(iii) and 455.450(e)(2) if such provider or supplier
applies for enrollment at any time within 6 months from the date the
moratorium was lifted.
c. Circumstances in Which Moratorium Is Inapplicable
Under Sec. 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
numbers.
Changes in ownership (except changes in ownership of home
health agencies, hospices, or suppliers of durable medical equipment,
prosthetics, orthotics, and supplies (DMEPOS) that would require an
initial enrollment).
Also, in accordance with Sec. 424.570(a)(1)(iv), a temporary
moratorium does not apply to any enrollment application that has been
received by the Medicare contractor prior to the date the moratorium is
imposed.
3. Announcement of Moratorium
CMS states at Sec. 424.570(a)(1)(ii) that it will announce a
temporary moratorium in a Federal Register notice that includes the
rationale for its imposition. This notice fulfills that requirement.
[[Page 27947]]
B. CMS' Previous Temporary Enrollment Moratoria
We first used our moratorium authority in a notice issued on July
31, 2013 (78 FR 46339). The moratorium prevented enrollment of: (1) new
home health agencies (HHAs) in Miami-Dade County, Florida and Cook
County, Illinois, as well as surrounding counties; and (2) Part B
ambulance suppliers in Harris County, Texas and surrounding counties.
We exercised our moratorium authority again in a notice published on
February 4, 2014 (79 FR 6475). This involved--
Extending our existing moratoria for an additional 6
months.
Expanding it to include enrollment of--
++ HHAs in Broward County, Florida; Dallas County, Texas; Harris
County, Texas; and Wayne County, Michigan and surrounding counties; and
++ Ground ambulance suppliers in Philadelphia, Pennsylvania and
surrounding counties.
We extended these moratoria for additional 6-month periods on
August 1, 2014 (79 FR 44702), February 2, 2015 (80 FR 5551), July 28,
2015 (80 FR 44967), and February 2, 2016 (81 FR 5444).
We again extended these moratoria for another 6 months on August 3,
2016 (81 FR 51120) and also expanded them statewide with respect to the
enrollment of new HHAs in Florida, Illinois, Michigan, and Texas, and
Part B non-emergency ambulance suppliers in New Jersey, Pennsylvania,
and Texas. Yet in this same notice, we announced the lifting of
temporary moratoria for all Part B emergency ambulance suppliers.
The original 2013 moratorium, after being extended and revised
several times,\1\ expired on January 30, 2019. However, in the February
27, 2026, Federal Register (91 FR 9855), we published a notice
announcing a 6-month nationwide moratorium on medical supply companies
enrolling as suppliers of DMEPOS.\2\ This moratorium remains in effect.
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\1\ On January 9, 2017, CMS issued another notice to extend the
temporary moratoria for a period of 6 months (82 FR 2363). On
January 9, 2017 (82 FR 2363) and July 28, 2017 (82 FR 35122), CMS
again issued a notice to extend the temporary moratoria for a period
of 6 months. On September 1, 2017, CMS lifted the Statewide
temporary moratorium on the enrollment of new Medicare Part B non-
emergency ground ambulance suppliers in Texas under the authority of
Sec. 424.570(d). This lifting of the moratorium also applied to
Medicaid and CHIP in Texas. This decision was a result of the
Presidential Disaster Declaration signed on August 25, 2017, for
several counties in the State of Texas due to Hurricane Harvey. Upon
declaration of the disaster, CMS carefully reviewed the potential
impact of continued moratoria in Texas and decided to lift the
temporary enrollment moratorium on non-emergency ground ambulance
suppliers in Texas in order to aid in the disaster response. CMS
published a formal announcement of this decision on November 3, 2017
(82 FR 51274). On January 30, 2018 (83 FR 4147), CMS announced the
extension of the temporary moratoria for an additional 6 months. In
August 2018, CMS announced the extension of the temporary moratoria
for an additional 6 months. CMS allowed the temporary moratoria to
expire on January 30, 2019.
\2\ ``Medicare, Medicaid, and Children's Health Insurance
Programs: Announcement of Nationwide Temporary Moratoria on
Enrollment of Durable Medical Equipment, Prosthetics, Orthotics, and
Supplies (DMEPOS) Supplier Medical Supply Companies'', 91 FR 9855.
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C. Determination of the Need for Moratoria
In determining whether to establish an enrollment moratorium, CMS
considers whether a high risk of fraud, waste, or abuse exists. CMS
also relies on its own and law enforcement's longstanding experience
with ongoing and emerging fraud trends and activities gained through
civil, criminal, and administrative investigations and prosecutions.
1. Law Enforcement
The HHS-OIG has highlighted the problem of hospice fraud, waste,
and abuse. It recently stated: ``[T]here are significant problems with
the (hospice) program. Our reports and investigations have revealed
several concerning issues, including poor--sometimes harmful--quality
of care, fraud schemes that involve enrolling beneficiaries without
their consent, inappropriate billing practices, limited transparency
for patients and their families, a payment system that creates
incentives to minimize services, and a rapid growth in the number of
new hospices, often to take advantage of these conditions.'' \3\ The
OIG in April 2025 also announced an upcoming audit titled ``Trends,
Patterns, and Key Comparisons Related to New Medicare Hospice Provider
Enrollments May Indicate the Need for Further Oversight'' (OAS-25-09-
034), stating: ``Our objective is to identify trends, patterns, and key
comparisons that indicate potential vulnerabilities related to new
Medicare hospice provider enrollments. The data brief may help CMS
evaluate the need for additional monitoring and program integrity
efforts to ensure that hospices meet all the requirements.'' \4\
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\3\ https://oig.hhs.gov/reports/featured/hospice/.
\4\ https://oig.hhs.gov/reports/work-plan/browse-work-plan-projects/trends-and-patterns-in-data-related-to-newly-enrolled-hospice-providers/.
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The OIG and DOJ have in the past encouraged CMS to undertake anti-
fraud measures regarding hospices, and we believe the action announced
by this notice is consistent therewith.
2. Data Analysis
In contemplating the present moratorium, we also used data analysis
that included reviewing (i) both current and historic Medicare
enrollment data and (ii) indicators of fraud, waste, and abuse.
Sections II.A. and B. of this notice discuss our review in more detail.
3. Beneficiary Access to Care
Patient access to care in Medicare, Medicaid and CHIP is of
critical importance to CMS and our state partners. CMS has carefully
evaluated access to hospice care for Medicare beneficiaries nationwide.
We discuss our findings later in this notice.
II. National Hospice Moratorium
Per our authority at Sec. 424.570(a)(2)(i) and (a)(2)(iv), CMS is
implementing a nationwide temporary moratorium on the Medicare
enrollment of hospices. In this section of this notice, we explain the
rationale for and scope of this moratorium.
A. Hospice Program Integrity Risks
1. The Increased Threat of Hospice Fraud, Waste, and Abuse
As previously indicated, hospice fraud, waste, and abuse has been a
dilemma for some time. Although, on the surface, hospices traditionally
had not appeared to pose the program integrity threat of certain other
provider/supplier types like HHAs and DMEPOS suppliers, the elevated
risk was still there. This risk has dramatically increased in the past
7 years to the point where hospices present no less of a payment
safeguard threat than HHAs and DMEPOS suppliers. CMS outlined the
rising problems in 2023, noting in part the following:
Instances of hospices certifying patients for hospice care
when they were not terminally ill and providing little to no services
to beneficiaries.\5\ This included telling patients that they were
terminally ill when they were not. In such circumstances, beneficiaries
who are inappropriately deemed terminally ill may be denied coverage
for other care because they are receiving the hospice benefit.
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\5\ https://www.cms.gov/blog/cms-taking-action-address-benefit-
integrity-issues-related-hospice-
care#:~:text=Unfortunately%2C%20hospices%20are%20profiting%20from,ben
eficiaries%20in%20the%20Medicare%20program.
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The rapid growth in potentially fraudulent hospices,
particularly in
[[Page 27948]]
Arizona, California, Nevada, and Texas, and that some of the addresses
for these hospices appeared to be non-operational.\6\
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\6\ Ibid.
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``Churn and burn'' schemes whereby a new hospice opens and
starts billing but once that hospice is audited or reaches its
statutory yearly payment limit, it shuts down, keeps the money, and
buys a new Medicare billing number; it then transfers its patients over
to the new Medicare billing number, and starts billing again.\7\
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\7\ Ibid.
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Other problems we have seen included but were not limited to: (1)
hospices paying recruiters to target beneficiaries who are not eligible
for hospice care, sometimes without the beneficiary's knowledge; (2)
hospices paying kickbacks to physicians for the latter to falsely
certify a patient's terminal status (or falsely certifying even without
receiving renumeration); and (3) parties establishing hospices for the
exclusive purpose of selling them for a profit and/or after committing
fraud but before they can be revoked from Medicare. Furnishing quality
patient care was not a priority--or even a consideration--for these
parties.
The tremendous growth in the number of hospices in certain states
has been especially noteworthy and disturbing. In Arizona, California,
Nevada, and Texas, the percentage increase has been far higher than
that of hospice beneficiaries. Consider the following CMS data between
calendar year (CY) 2019 and 2023:
Table 1--Number of Enrolled Hospices in CY 2019 and CY 2023
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Percentage
State CY 2019 CY 2023 increase
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Arizona......................................................... 152 311 105
California...................................................... 1,130 2,559 126
Nevada.......................................................... 55 138 151
Texas........................................................... 718 1,081 51
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The problem has been particularly acute in places like Los Angeles
County in California, where numerous hospices were simultaneously
operating out of a single building or otherwise were massed in large
numbers within a very small geographic area or neighborhood.
2. Criminal and Other Improper Hospice Activity
In the CY 2024 Home Health Prospective Payment System (HH PPS)
final rule (88 FR 77676) and the Fiscal Year (FY) 2024 Hospice Wage
Index final rule (88 FR 51164), we outlined a number of improper
hospice activities we had seen.\8\ This included criminal cases
involving hospices. We unfortunately continue to see criminal or other
inappropriate activity in the hospice sphere, with some court cases
involving the behavior cited in section II.A. of this notice. Recent
cases include, but are not limited to, the following:
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\8\ ``Medicare Program; Calendar Year (CY) 2024 Home Health (HH)
Prospective Payment System Rate Update; HH Quality Reporting Program
Requirements; HH Value-Based Purchasing Expanded Model Requirements;
Home Intravenous Immune Globulin Items and Services; Hospice
Informal Dispute Resolution and Special Focus Program Requirements,
Certain Requirements for Durable Medical Equipment Prosthetics and
Orthotics Supplies; and Provider and Supplier Enrollment
Requirements'', November 13, 2023 (88 FR 77676); ``Medicare Program;
FY 2024 Hospice Wage Index and Payment Rate Update, Hospice
Conditions of Participation Updates, Hospice Quality Reporting
Program Requirements, and Hospice Certifying Physician Provider
Enrollment Requirements'', August 2, 2023 (88 FR 51164).
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A former Louisiana resident in June 2024 was sentenced to
6 years in prison for conspiracy to commit health care fraud and three
counts of health care fraud. Evidence presented at trial demonstrated
that over 24 patients were placed on hospice by the defendant's hospice
without meeting the criteria required by Medicare. During the time
period that the patients were under the care and supervision of the
hospice, none of them had been diagnosed with a terminal condition and,
in fact, many of the patients and their families never even knew they
had been placed on hospice. One patient testified at trial that
Medicare refused to cover a procedure he needed to have because,
unbeknownst to him, he was listed as a hospice patient. Many of these
patients thought they were receiving some type of home health or free
services, rather than being placed on hospice.\9\
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\9\ https://www.justice.gov/usao-wdla/pr/hospice-care-company-owner-sentenced-health-care-fraud-charges.
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A Utah health care company in March 2023 agreed to pay
over $1 million to resolve allegations they violated the False Claims
Act by submitting false claims to Medicare and Medicaid for hospice
services that were not medically necessary; the patients' records
lacked documentation of a terminal illness to qualify for services.\10\
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\10\ https://www.justice.gov/usao-ut/pr/summit-hospice-pay-over-1m-settle-false-claims-liability.
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Several California residents were sentenced to prison in
2025 for their roles in defrauding Medicare of nearly $16 million
through sham hospice companies and laundering the fraudulent proceeds.
According to court documents, the individuals--who operated several
sham hospices--schemed to bill Medicare for hospice services that were
medically unnecessary and never provided. They concealed the scheme by
using foreign nationals' names and personally identifiable information
to act as straw owners for the hospices and to open bank accounts,
submit information to Medicare, and sign property leases. They also
controlled and used cell phones in the names of the foreign nationals
in furtherance of the scheme. After defrauding Medicare, the
individuals moved the funds between various assets and accounts--
including bank accounts in the names of shell companies--to further
conceal their actions.\11\
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\11\ https://www.justice.gov/opa/pr/four-california-residents-sentenced-prison-connection-16m-hospice-fraud-and-money-laundering.
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Two California residents were found guilty in December
2024 of paying and receiving hundreds of thousands of dollars in
illegal kickbacks for patient referrals that resulted in the submission
of approximately $3.2 million in fraudulent claims to Medicare for
purported hospice care. One of the individuals had been excluded from
Medicare because of prior federal convictions for receiving illegal
kickbacks. While excluded, she purchased a hospice through her daughter
and concealed her ownership interest in the hospice from Medicare. She
(the owner) then paid ``marketers'' (including her co-defendant)
hundreds of thousands of dollars in illegal kickbacks for patient
referrals that she could bill to Medicare for purported hospice care.
Also, and consistent with the owner's instructions, the co-
defendant falsely
[[Page 27949]]
represented to prospective patients that they did not need to be dying
to be on hospice. After collecting personal identifying information
from prospective patients who were not dying, the co-defendant sent the
information to the owner so the latter could bill Medicare for
purported hospice care. Many of the patients that were billed to the
hospice did not know they were signed up for hospice, and some patients
only found out after they were denied medical coverage for services
they needed. In addition:
++ When Medicare requested additional documentation from the
hospice to support the purported hospice claims, the owner and her
husband directed employees to create fake patient charts and had said
charts submitted to Medicare.
++ Court documents alleged that while awaiting trial in this
matter, the owner took control of three other hospices and caused the
submission of approximately $4.8 million in claims for purported
hospice care.\12\
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\12\ https://www.justice.gov/usao-cdca/pr/glendale-woman-and-lakewood-man-found-guilty-32-million-hospice-fraud-scheme-involving.
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A successor to a hospice chain agreed in July 2024 to pay
over $19 million to resolve allegations that the chain knowingly
submitted false claims and knowingly retained overpayments for hospice
services provided to patients who were ineligible to receive hospice
benefits. The hospice locations included sites in Rhode Island, Texas,
Missouri, Alabama, Indiana, and Ohio. The specific allegations included
the following:
++ The defendants knowingly submitted or caused to be submitted
false claims for hospice services provided to hospice patients who were
ineligible for the Medicare or Medicaid hospice benefit because they
were not terminally ill.
++ Some locations knowingly and improperly concealed or avoided
obligations to repay the foregoing hospice claims.
++ One location allegedly violated the Anti-Kickback Statute by
willfully paying renumeration to a consulting physician to induce
hospice referrals.\13\
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\13\ https://www.justice.gov/usao-wdky/pr/kindred-and-related-entities-agree-pay-19428m-settle-federal-and-state-false-claims.
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A Georgia hospice and its owners and managers in June 2024
agreed to pay $1.4 million to resolve allegations that they violated
the False Claims Act by entering into kickback arrangements with
medical directors in exchange for referrals of hospice patients to the
hospice. The alleged kickbacks included monthly stipends and a signing
bonus paid to the medical directors. The compensation allegedly
increased when the medical director referred more patients and
decreased when the medical director failed to make referrals. The
Special Agent in Charge of the Federal Bureau of Investigation's
Atlanta office stated: ``The False Claims Act settlement in this case
will hopefully be a deterrent to those who selfishly evade our federal
healthcare programs for their own benefit.'' The Georgia Attorney
General added: ``Decisions regarding end-of-life care are incredibly
difficult and personal, and families must be able to trust the
intentions of their chosen providers. Those who instead take advantage
of the system for their own personal gain will be held accountable.''
\14\
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\14\ https://www.justice.gov/usao-ndga/pr/tapestry-hospice-settles-healthcare-kickback-claims-14-million.
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The owner and operator of a Louisiana hospice with
multiple offices was sentenced to 20 years in prison in May 2024 for
orchestrating an extensive health care fraud scheme. The hospice billed
Medicare approximately $84 million in fraudulent claims and was paid
approximately $42 million relating to these claims. The scheme
involved: (1) overbilling for hospice patients for expensive general
inpatient services; and (2) manipulating Medicare billing codes despite
such services being medically unnecessary or despite their inclusion in
the daily hospice benefit the hospice already received for its
patients. The Special Agent in Charge at HHS-OIG said the defendant,
``showed no regard for quality end-of-life hospice care. Instead, [his]
motivation centered around multiple fraud schemes to maximize profit
and steal from American taxpayers.'' The Special Agent in Charge of the
FBI New Orleans Division stated: ``Each fraudulent claim filed by [the
defendant] potentially deprived another deserving and suffering
individual from the emotional and physical comfort of end-of-life
care.'' \15\
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\15\ https://www.justice.gov/usao-edla/pr/hospice-owner-sentenced-240-months-imprisonment-and-ordered-repay-42000000-defrauding.
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Several companies in May 2024 agreed to pay $4.2 million
to resolve allegations that they violated the False Claims Act by
knowingly submitting false claims and knowingly retaining overpayments
for the care of hospice patients in Texas; the patients were ineligible
for the Medicare hospice benefit because they were not terminally
ill.\16\
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\16\ https://www.justice.gov/archives/opa/pr/elara-caring-agrees-pay-42-million-settle-false-claims-act-allegations-it-billed-medicare.
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The owner of two California-based hospice companies, along
with his biller/consultant, were sentenced to prison in March 2024 for
their roles in a scheme that resulted in obtaining over $9 million from
Medicare in false and fraudulent claims for hospice services. According
to court documents, the owner concealed his ownership and control over
the hospice entities from Medicare, inserted nominee owners, paid
kickbacks to patient recruiters, and profited from the scheme. The
biller/consultant, meanwhile, submitted false and fraudulent Medicare
enrollment forms, falsely identifying a straw owner as the sole owner
and manager and concealing the actual owners and managers.\17\
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\17\ https://www.justice.gov/archives/opa/pr/two-men-sentenced-role-9m-hospice-fraud-scheme.
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In February 2024, a California man was convicted for his
role in a scheme to defraud Medicare by billing $2.8 million for
hospice services that patients did not need. According to court
documents and evidence presented at trial, the individual was the
medical director of several hospice companies. He fraudulently
certified Medicare patients of one hospice as having terminal illnesses
that the patients did not have so the hospice could bill Medicare for
hospice services. The individual in 2015 was listed as the attending
provider for more hospice claims paid by Medicare than any other
provider in the nation.\18\
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\18\ https://www.justice.gov/archives/opa/pr/doctor-convicted-28m-medicare-fraud-scheme.
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A Texas man in September 2023 was sentenced to prison for
his role in a scheme that involved the submission of over $150 million
in false and fraudulent claims to Medicare for hospice and other health
care services. According to court documents, the person was the medical
director of a large health care company that operated dozens of
locations throughout Texas. Evidence at the trial of his co-defendants
showed that the company marketed their hospice programs through a group
of companies. They enrolled patients with long-term incurable diseases,
such as Alzheimer's and dementia, as well as patients with limited
mental capacity who lived at group homes, nursing homes, and in housing
projects. In some instances, the company marketers falsely told
patients they had less than six months to live. They also sent
chaplains to the patients based on the false pretense they were near
death. The group hired the defendant and other medical directors but
made payment of their medical director fees contingent upon an
[[Page 27950]]
agreement to certify unqualified patients for hospice. In addition to
regular medical director payments, the defendant received luxury trips,
bottle service at exclusive nightclubs, and other perks in exchange for
his certification of unnecessary hospice patients. He himself certified
over $18 million in unnecessary hospice services as part of the over
$150 million conspiracy.\19\
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\19\ https://www.justice.gov/archives/opa/pr/hospice-medical-director-sentenced-150m-hospice-fraud-scheme.
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An Oklahoma hospice company agreed to pay over $48,000 to
resolve allegations that it violated the False Claims Act by knowingly
submitting false claims to Medicare for hospice care provided to
beneficiaries who did not qualify for the services (they were not
terminally ill) and for services that were not medically necessary.\20\
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\20\ https://www.justice.gov/usao-ndok/pr/united-states-settles-false-claims-allegations-against-evergreen-hospice-llc-48830.
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A health care company in February 2025 agreed to pay $3
million to resolve allegations that it violated the False Claims Act by
knowingly submitting false claims for the care of hospice patients in
Alabama who were ineligible for the Medicare hospice benefit because
they were not terminally ill.\21\
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\21\ https://www.justice.gov/opa/pr/saad-healthcare-agrees-pay-3m-settle-false-claims-act-allegations-it-billed-medicare.
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A California physician who worked for two hospices was
sentenced to Federal prison in December 2024. He and his co-defendant
schemed to defraud Medicare by submitting nearly $4 million in false
and fraudulent claims for hospice services submitted by two hospice
companies, which the co-defendant controlled. The physician falsely
stated on claim forms that patients had terminal illnesses to make them
eligible for hospice services covered by Medicare, typically adopting
diagnoses provided to him by hospice employees whether or not they were
true. He did so even though he was not the patients' primary care
physician and had not spoken to those primary care physicians about the
patients' conditions. Medicare paid on the claims supported by the
defendant's false evaluations and certifications and recertifications
of patients.\22\
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\22\ https://www.justice.gov/usao-cdca/pr/santa-paula-doctor-sentenced-2-years-federal-prison-role-hospice-fraud-bilked-medicare.
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3. CMS Measures Regarding Hospice Fraud
To address several of the foregoing issues, CMS has taken a number
of regulatory and operational initiatives.
First, all providers/suppliers are assigned to an application
screening level under Sec. 424.518 of ``limited,'' ``moderate,'' or
``high.'' Those in the ``high'' category receive the strictest
scrutiny. When initially enrolling in Medicare or undergoing an
ownership change ``high'' level providers/suppliers must undergo a site
visit and have their 5 percent or greater owners be subject to
fingerprinting for a criminal background check. Hospices in 2011 were
originally assigned to the ``moderate'' category. Given the increase in
hospice fraud, waste, abuse--which includes the consequent need to
exercise closer scrutiny of hospice owners, such as through criminal
background reviews--we moved hospices to the ``high'' classification
beginning in 2024. Hospices are one of only six provider/supplier types
in the ``high'' category, which reflects their uniquely elevated risk.
Second, and to further increase our oversight of hospices, we
expanded the change in majority ownership (CIMO) ``36-month rule'' in
Sec. 424.550(b) to include hospices. We found in the mid-2000s that
some HHAs were attempting to enter Medicare without undergoing the
required State survey or accreditation. Brokers would enroll an HHA
(after being surveyed or accredited) with the specific intention of
quickly selling it--or ``flipping'' it--to another party. This enabled
the buyer to participate in Medicare with no survey or accreditation of
the HHA under its new ownership--hence increasing the possibility of an
illegitimate HHA furnishing (and billing for) poor or otherwise non-
compliant services to beneficiaries. We thus promulgated Sec. 424.550
in 2009, which required an HHA undergoing a CIMO within 36 months of
its initial enrollment (or within 36 months of its most recent CIMO) to
initially enroll as a new HHA and undergo a State survey or
accreditation (unless certain exceptions apply). As already noted, we
have seen similar situations in the hospice realm, whereby promptly
selling the business--rather than furnishing good patient care--is the
hospice's owner's principal motivation. We believed that expanding the
36-month rule to hospices would help stem the practice by, in part,
facilitating a thorough vetting of the new owner and the hospice in
question via a survey or accreditation.
Third, 42 CFR 418.22(c) states that (1) the hospice medical
director, the physician designee (as defined in Sec. 418.3), or the
physician member of the hospice interdisciplinary group (hereafter the
``hospice physician'') and (2) the attending physician (if the
beneficiary has one) must initially certify the patient's terminal
condition. (For subsequent periods, only the hospice physician must do
so). We revised 42 CFR 424.507 in 2023 to require these two categories
of physicians to be enrolled in or opted-out of Medicare in order for
the hospice service to be paid. We concluded that requiring enrollment
or opt-out would allow us to screen the certifying physician to ensure
they are qualified (for example, licensed) to certify the terminal
condition and do not pose program integrity risks such as past final
adverse actions (as that term is defined in Sec. 424.502). This is a
particularly important consideration given the aforementioned issue of
improper certifications.
Fourth, section 1866(j)(3) of the Act permits the Secretary to
establish a provisional period of enhanced oversight (PPEO) of between
30 days and 1 year during which new providers or suppliers (including
categories thereof) would be subject to enhanced oversight, such as
prepayment review and payment caps. Consistent therewith, and in light
of the payment safeguard threats that hospices posed, we implemented a
PPEO in 2023 on new hospices enrolling in Arizona, California, Nevada,
and Texas. Under this initiative, as of June 2025 approximately 670
hospices were subject to medical review with 122 of them revoked from
Medicare. This 18 percent revocation rate is far more than the average
revocation rate of about 1 to 3 percent. (That is--and though it varies
depending on, for example, the provider/supplier type in question and
the geographic region involved--1 to 3 percent of providers/suppliers
are revoked at least once during their enrollment). The much higher
percentage of hospices revoked during this initiative compared to
general provider/supplier revocation rates helps demonstrate the extent
of the hospice program integrity problem.
Fifth, we revised our provider enrollment regulations to clarify
that hospice medical directors and administrators qualify as ``managing
employees'' under Sec. 424.502. They must therefore be reported on the
hospice's Form CMS-855A application (Medicare Enrollment Application--
Institutional Providers; OMB Control No. 0938-0685). This would foster
greater transparency regarding the operators of hospices. It would also
permit us to ascertain whether certain medical directors and
administrators hold such roles at multiple hospices, which could be an
indicator of a broader scheme if
[[Page 27951]]
the hospices in question otherwise pose program integrity risks.
It should be noted, some of these initiatives mirrored
recommendations made by national hospice organizations that expressed
deep concerns about fraud within the hospice community--concerns that
various members of Congress share.\23\
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\23\ Letter from United States House Representatives Brett
Guthrie, John Joyce, M.D., Morgan Griffith, Jason Smith, David
Schweikert, and Vern Buchanan to T. March Bell, Inspector General,
HHS-OIG, January 9, 2026, https://energycommerce.house.gov/posts/chairmen-guthrie-joyce-griffith-smith-schweikert-and-buchanan-ask-hhs-oig-about-ongoing-hha-and-hospice-fraud-in-los-angeles-county-1;
Letter from LeadingAge and the National Alliance for Care at Home
Letter to Dr. Mehmet Oz, CMS Administrator, December 22, 2025,
https://allianceforcareathome.org/wp-content/uploads/Final-Alliance-and-LeadingAge-Home-Health-and-Hospice-Program-Integrity-Recommendations.pdf.
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B. Ongoing Problems in the Hospice Arena
1. Background and Need for Action
CMS is aggressively continuing its efforts to crush hospice fraud,
waste, and abuse via the previous and other measures. Closer
examination of hospices via the ``36-month rule'' and the elevation of
hospices to the ``high'' risk category may well have resulted in some
problematic hospice owners being unable to enter Medicare. CMS' PPEO
measures have, as stated, resulted in a number of revocations. Yet we
are concerned that vulnerabilities remain. Notwithstanding our tighter
screening, hospices can still enroll in large numbers if all Medicare
requirements are initially met. This is precisely what occurred in Los
Angeles County and elsewhere. The dilemma is that some of these
providers later engaged in fraudulent activity. Put otherwise, we have
indeed established more stringent requirements for hospices to
initially enroll, but they cannot in every case prevent a potentially
problematic hospice from entering Medicare. Hospice anti-fraud measures
require a comprehensive, wide-ranging approach that impact a variety of
hospice activities. They cannot be limited to post-enrollment scrutiny
(such as medical review), greater screening of new owners, or even
both. All facets of hospice enrollment must likewise be addressed.
Given the continued severity of hospice program integrity problems, we
believe that addressing the very front end of the enrollment process--
before the Medicare contractor even starts reviewing the hospice's
initial enrollment application, screening the hospice's owners, etc.--
is a program integrity gap that must be filled. Preventive action--
specifically, halting fraud before it has a chance to begin--is a far
better anti-fraud approach than the traditional ``pay-and-chase'' model
of waiting for the fraud to happen before taking remedial steps.
2. The Historical Benefits of an Enrollment Moratorium
Our previously mentioned HHA and ground ambulance moratoria were
intended to address fraud, waste, and abuse among these two provider/
supplier types in general and, in particular, the rapid increase in the
number of HHAs and ground ambulance suppliers in the affected
localities. The two concepts are related. A sudden rise in new
enrollments within a particular area that is not tied to a similar
increase in the number of Medicare beneficiaries has long been a strong
indicator of fraud, waste, and abuse. Consider Nevada in Table 1 of
this notice. There was no medical justification for a 151 percent
increase in enrolled hospices over a 4-year period, especially since
the State's beneficiary population increased by no more than 10 percent
during that timeframe; likewise, having dozens of newly enrolled
hospices within a fairly small area of Los Angeles County strongly
suggests improper behavior.
The previous moratoria were, in our view, successful in stemming
similar activity regarding HHAs and ground ambulance suppliers. Since
there were no new enrollments of these provider/supplier types in the
impacted high-fraud regions, new providers/suppliers that would or
might otherwise have engaged in fraud, waste, and abuse in these areas
were blocked from doing so. Too, with no new provider/suppliers coming
in, we were able focus our program integrity efforts and resources on
post-enrollment activities--that is, on enrolled HHAs and ground
ambulance suppliers. Through our very close scrutiny of their
activities and, in some cases, revocations, the overall number of
enrolled HHAs and ground ambulance suppliers in said localities fell to
a level more commensurate with the number of beneficiaries therein--and
with this, an ostensible reduction in fraud, waste, and abuse.
With the aforementioned program integrity gap at the beginning of
the hospice enrollment process, the ongoing hospice payment safeguard
issues, and the success of our previous moratoria, we believe that
temporarily closing the enrollment door at the very start via a
moratorium is required.
C. Nationwide Application
Aside from the need to halt hospice fraud at the beginning, there
is another consideration behind our planned moratorium and why we
believe it should be nationwide: the transitory nature of fraud
schemes.
The main impetus for the enrollment measures discussed in section
II.A. of this notice were the problems seen in Arizona, California,
Nevada, and Texas--mostly involving the quick, sharp increase in new
enrollments (described in Table 1). Since CY 2023, the number of new
enrollments in Arizona, California, and Texas have fallen
substantially, as shown in Table 2:
Table 2--Number of Newly Enrolling Hospices in CY 2023 and CY 2025
------------------------------------------------------------------------
State CY 2023 CY 2025
------------------------------------------------------------------------
Arizona................................. 53 3
California.............................. 362 29
Texas................................... 164 67
------------------------------------------------------------------------
Encouraging though this is, difficulties remain--and are spreading.
The number of newly enrolling hospices in Nevada has changed little
since CY 2022 despite our hospice program integrity efforts. Whereas
there were five new hospice enrollments in Nevada in CY 2019, between
35 and 39 hospices have enrolled in each of the last 4 calendar years.
The total number of enrolled Nevada hospices continues to rise at a
rate well beyond that of the beneficiary population--from 138 in CY
2023 to 188 in CY 2025, or 36 percent. This potentially reflects a
shifting of some fraudulent hospice activity from California and
Arizona to Nevada given the sharp decrease in new enrollments
[[Page 27952]]
in the former two States. Equally concerning is the increase in hospice
payment safeguard problems in States like Ohio and Georgia, neither of
which have historically been among the highest risk States for Medicare
fraud. Though the number of newly enrolling hospices in Ohio has
remained fairly steady over the years, we have recently seen, for
example, instances of numerous hospices operating out of a single
location. In Georgia, there have been sharp increases in the number of
hospices there--from 221 in CY 2019 to 273 in CY 2025, or a 24 percent
rise; in this same timeframe, the number of Medicare beneficiaries
increased only 6 percent. Again, highly disproportionate and otherwise
unwarranted increases in hospice enrollments are often indicative of
fraudulent behavior. The Ohio and Georgia situations were so alarming
that in 2025 we expanded our four-State PPEO to include these two
States. With this spread in hospice fraud--combined with the previously
noted fraud cases in typically lower-risk States such as Oklahoma,
Utah, and Louisiana--fraudulent hospice activity is clearly a
nationwide problem, not a regional or local one. It is not limited to
long-standing hotspots of provider and supplier fraud, waste, and abuse
such as south Florida. Indeed--like Ohio and Georgia--Nevada, Arizona,
and even Los Angeles County were never previously deemed as posing
excessively high hospice fraud risks. All of this shows that hospice
fraud can (and does) arise anywhere at any time--and can spread to any
location regardless of that area's perceived historical risk. As we
stated in a previous HHA moratorium notice: ``The HHS-OIG and CMS have
learned that some fraud schemes are viral, meaning they replicate
rapidly within communities, and that health care fraud also migrates--
as law enforcement cracks down on a particular scheme, the criminals
may redesign the scheme or relocate to a new geographic area.'' \24\ We
saw instances of this in our prior HHA and non-emergency ambulance
supplier moratoria. Providers would leave the initial counties that
were subject to the moratoria and move to other locations to circumvent
the enrollment ban. While our consequent expansion to State-based
moratoria alleviated this problem on a county-level, we still saw
isolated circumvention efforts whereby providers would leave the
impacted States and enroll new locations elsewhere. With a nationwide
hospice moratorium, though, prospective hospice enrollees seeking to
defraud Medicare would have no new geographic area to go to.\25\
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\24\ ``Medicare, Medicaid, and Children's Health Insurance
Programs: Announcement of Temporary Moratoria on Enrollment of
Ambulances Suppliers and Providers and Home Health Agencies in
Designated Geographic Areas'', July 31, 2013 (78 FR 46339).
\25\ California enacted legislation in 2021 (SB-664, Health &
Safety Code Article 2.3) that placed a moratorium on the issuance of
new hospice licenses in the State; the moratorium remains in effect.
Although it has helped to significantly reduce the number of new
HHAs in California (see Table 2), it cannot prevent hospice
enrollment in other States, a problem that a nationwide enrollment
moratorium could resolve.
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D. Moratorium Determination and Scope
Considering the foregoing concerns, and after consultation with the
OIG, CMS has concluded that hospices have a significant potential for
fraud, waste or abuse. With the need to prevent potential fraud before
it begins rather than after the fact, we have determined to impose a
nationwide moratorium on the enrollment of all hospices and hospice
practice locations. Beginning on the effective date of this notice, no
new hospices or hospice practice locations will be enrolled in Medicare
unless the hospice's enrollment application was received by the
applicable Medicare contractor prior to this notice's effective date.
Geographically, the moratorium applies to hospices seeking to enroll
anywhere in the United States, including all States, territories, and
the District of Columbia.
Section 424.550(b), as already mentioned, requires a hospice
undergoing a non-exempt CIMO within 36 months of its initial enrollment
(or within 36 months of its most recent CIMO) to enroll in Medicare as
a brand-new hospice and undergo a State survey or accreditation. The
hospice's current enrollment and provider agreement are terminated.
This means the hospice's new enrollment is an initial enrollment no
less than if the hospice had never enrolled in Medicare before. Hence,
our moratorium will prevent a hospice undergoing a non-exempt CIMO from
reenrolling in Medicare because, again, it would constitute an initial
enrollment; the hospice is ``new.''
E. Application to Medicaid and CHIP
Section 1866(j)(7) of the Act authorizes imposition of a temporary
enrollment moratorium for Medicare, Medicaid or CHIP if the Secretary
determines such moratorium is necessary to prevent or combat fraud,
waste, or abuse under either program. The Secretary is not required to
impose a particular moratorium on all three programs. This statutory
discretion enables the Secretary to impose a moratorium on any
combination of the three programs or one program alone.\26\
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\26\ The aforementioned February 2, 2011, final rule also
established new Medicaid regulations at 42 CFR part 455, subpart E,
including Sec. 455.470, which implements the moratoria authority
under section 1902(kk)(4) of the Act. Likewise, that final rule
implemented Sec. 457.990, providing that part 455, subpart E
applies to CHIP in the same manner as it applies to Medicaid. Under
Sec. 455.470(a)(1) through (3), the Secretary may impose a
temporary moratorium, in accordance with Sec. 424.570, on the
enrollment of new providers or provider types after consulting with
any affected State Medicaid agencies. The State Medicaid agency will
impose a temporary moratorium on the enrollment of new providers or
provider types identified by the Secretary as posing an increased
risk to the Medicaid program unless the State determines that the
imposition of a moratorium would adversely affect Medicaid
beneficiaries' access to medical assistance and so notifies the
Secretary in writing.
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At this time, we believe it is in Medicaid and CHIP beneficiaries'
best interest to allow each State to decide whether some form of a
hospice moratorium is appropriate for their respective Medicaid
programs and CHIPs, and the scope of any such moratorium. Each State
has greater expertise and experience with their hospice provider
types--including the requirements for each type of hospice--than CMS.
Nevertheless, CMS encourages each State to, as appropriate, implement a
hospice moratorium tailored to the specifics of their beneficiary
population as well as any geographic considerations, (in accordance
with 42 CFR 455.470(b)). CMS is also offering every State and territory
the opportunity to consult with CMS on the prospect of implementing a
Medicaid- or CHIP-based (or both) hospice moratorium in their
jurisdictions.
F. Beneficiary Access to Care
In general, and excluding the recent increases in Arizona,
California, Georgia, Nevada, and Texas, the number of enrolled hospices
nationwide has remained reasonably stable over the past 7 years. During
this period, we saw little evidence of nationwide, across-the-board
hospice access-to-care issues for beneficiaries in Medicare--or, for
that matter, in Medicaid or CHIP. Therefore, we do not believe that a
national moratorium will threaten beneficiaries' ability to receive
hospice services in any of these programs. However, we will monitor for
any access to care issues.
III. No Judicial Review of CMS's Decision To Impose an Enrollment
Moratorium
In accordance with section 1866(j)(7)(B) of the Act, there is no
judicial review under sections 1869 and 1878 of the Act, or otherwise,
of the
[[Page 27953]]
decision to impose a temporary enrollment moratorium. Under Sec. Sec.
424.530(a)(10) and 424.570(c), CMS denies the enrollment application of
a provider or supplier if the provider or supplier is subject to a
moratorium. In addition, Sec. 424.514(d)(2)(v)(C) states that if the
provider or supplier was required to pay an application fee, the
application fee will be refunded if the application was denied because
of the imposition of a temporary moratorium. However, a provider or
supplier that is impacted by a moratorium may use the existing appeal
procedures at 42 CFR part 498 to administratively appeal a denial of
billing privileges based on the imposition of a temporary moratorium;
the scope of any such appeal, though, would be limited solely to
assessing whether the temporary moratorium applies to the provider or
supplier appealing the denial. (See 42 CFR 498.5(l)(4)).
IV. Collection of Information Requirements
This document does not impose information collection and
recordkeeping requirements. Consequently, it need not be reviewed by
the Office of Management and Budget under the authority of the
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
V. Regulatory Impact Statement
A. Statement of Need
This notice is necessary to help reduce the prevalence of Medicare
fraud, waste, and abuse among hospices.
B. Overall Impact
We have examined the impacts of this notice as required by E.O.
12866, ``Regulatory Planning and Review''; E.O. 13132, ``Federalism; E.
O. 13563, ``Improving Regulation and Regulatory Review''; E.O. 14192,
``Unleashing Prosperity Through Deregulation''; the Regulatory
Flexibility Act (RFA), 5 U.S.C. 601 through 612; section 1102(b) of the
Social Security Act; and section 202 of the Unfunded Mandates Reform
Act of 1995.
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select those regulatory approaches that
maximize net benefits (including potential economic, environmental,
public health and safety, and other advantages; and distributive
impacts). Based on our analysis, the Office of Information and
Regulatory Affairs (OIRA) has determined that this notice is not
significant pursuant to section 3(f)(1) of Executive Order 12866. In
accordance with the provisions of Executive Order 12866, this notice
was reviewed by the Office of Management and Budget. In accordance with
Subtitle E of the Small Business Regulatory Enforcement Fairness Act of
1996 (also known as the Congressional Review Act), OIRA has also
determined that this notice does not meet the criteria for a major rule
as defined in 5 U.S.C. 804(2).
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. This
analysis must conform to the RFA provisions at 5 U.S.C. 604. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a metropolitan
statistical area and has fewer than 100 beds. This notice is primarily
applicable to hospices, not rural hospitals. Therefore, the Secretary
has certified that this notice will not have a significant economic
impact on the operations of small rural hospitals.
We expect savings to the Medicare program from the reduction in the
number of newly enrolling hospices. However, we do not have data upon
which to base an estimate of the amount of savings.
C. Regulatory Flexibility Analysis (RFA)
1. Small Business Impact
The RFA requires agencies to analyze options for regulatory relief
of small businesses. For purposes of the RFA, small entities include
small businesses, nonprofit organization, and small governmental
jurisdictions. Most entities and most other providers and suppliers are
small entities, either by nonprofit status or by having revenues less
than $19 million to $41 million in any 1 year. Individuals and States
are not included in the definition of a small entity. We do not believe
that this hospice moratorium notice will have a significant economic
impact on a substantial number of small businesses. Excluding the
aforementioned outliers in Arizona, California, Georgia, Nevada, and
Texas, between CY 2023 and CY 2025 the combined nationwide number of
new enrollments was roughly 500 (166 per year). If we assumed that a
similar number would seek to enroll during the moratorium would be
prohibited from doing so, this is a miniscule percentage when compared
to the well over 2 million providers and suppliers currently enrolled
in Medicare; the same would hold true if several hundred hospice
practice locations (aside from the main provider) could not be added by
hospice providers. Furthermore--aside from their ability to add new
practice locations to their enrollments--the moratorium would not
impact the approximately 7,000 currently enrolled hospices, which could
continue furnishing services (assuming they remain complaint with all
Medicare requirements). Accordingly, very few small businesses will be
affected by the moratorium. Even conceding the impact on newly
enrolling hospices and prospective hospice practice locations, we
believe that the risk that hospice fraud, waste, and abuse poses to the
Trust Funds, Medicare beneficiaries, and the taxpayers far exceeds this
and thus justifies our measure.
2. Alternatives Considered
There are two principal alternatives we considered in preparing
this notice. First, we considered forgoing a moratorium entirely. Yet
as already noted, the longstanding fraud, waste, and abuse problems
require remedial measures beyond those we presently utilize. Helpful
though the latter have been, more is needed. Second, we contemplated
limiting the moratorium to the six States currently subject to the
previously-mentioned hospice PPEO. However, we reiterate that the
problems the moratorium seeks to address are nationwide instead of
restricted to particular geographic areas. As we also stated earlier,
the transient nature of fraud schemes--as shown in, for instance, the
sudden upswing in new hospices in States like Nevada and Georgia--
require nationwide proactivity to prevent these schemes from developing
in the first place. Third, we contemplated requiring States to
implement a hospice moratorium, but, as noted, we believe States are in
the best position to determine whether a moratorium is appropriate for
their jurisdictions and beneficiary populations.
D. Unfunded Mandates Reform Act (UMRA)
Section 202 of UMRA of 1995 UMRA also requires that agencies assess
anticipated costs and benefits before issuing any rule whose mandates
require spending in any 1 year of $100 million in 1995 dollars, updated
annually for inflation. In 2026, that threshold is approximately $193
million. This notice will not impose a mandate that will result in the
expenditure by State, local, and Tribal governments, in the aggregate,
or by the private sector, of more than $193 million in any 1 year. UMRA
only applies in situations where an agency
[[Page 27954]]
engages in notice-and-comment rulemaking. It does not apply to this
notice.
E. State and Local Costs
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed regulatory action (and
subsequent final action) that imposes substantial direct requirement
costs on State and local governments, preempts State law, or otherwise
has Federalism implications. Since this notice does not impose any
costs on State or local governments, the requirements of Executive
Order 13132 are not applicable.
The Administrator of the Centers for Medicare & Medicaid Services
(CMS), Dr. Mehmet Oz, having reviewed and approved this document,
authorizes Chyana Woodyard, who is the Federal Register Liaison, to
electronically sign this document for purposes of publication in the
Federal Register.
Chyana Woodyard,
Federal Register Liaison, Centers for Medicare & Medicaid Services.
[FR Doc. 2026-09718 Filed 5-13-26; 8:45 am]
BILLING CODE 4120-01-P