CMS Freezes New Medicare Enrollment of Medical Supply Companies for Six Months

A six-month nationwide moratorium on new Medicare enrollment of medical supply companies that sell durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) took effect on February 27, according to a Centers for Medicare & Medicaid Services notice published in the Federal Register that day. CMS said the freeze is meant to curb fraud, waste and abuse among a group of suppliers it described as very high risk.

Vice President J.D. Vance, Health and Human Services Secretary Robert F. Kennedy Jr. and CMS Administrator Mehmet Oz announced the moratorium at the White House on February 25, alongside a $259.5 million deferral of federal Medicaid funding to Minnesota and a request for information on fraud prevention, according to a CMS press release. "CMS is done trying to catch fraudsters with their hands in the cookie jar—instead, we're padlocking the jar and letting them starve," Oz said.

Seven supplier types blocked

Under the notice, no new DMEPOS suppliers of seven types, and no new practice locations of those types, will be enrolled in Medicare anywhere in the US, its territories or the District of Columbia unless the application reached the Medicare contractor before the effective date. The seven types are medical supply companies, including those with orthotics, pedorthic, prosthetics, prosthetic and orthotic, registered pharmacist or respiratory therapist personnel.

For the moratorium, CMS defined a medical supply company as a business whose principal function is to furnish DMEPOS supplies directly to another party, such as beneficiaries by mail order or medical providers. The notice said grocery stores, pharmacies and hospitals or physician offices generally would not be covered, because supplying DMEPOS is typically not their principal function.

The freeze also reaches some ownership changes. The notice said a supplier that undergoes a change in majority ownership within 36 months of its initial enrollment, or of its most recent such change, must enroll as a brand-new supplier, and the moratorium would bar that re-enrollment. CMS warned that it will closely screen all DMEPOS applications during the moratorium, including through site visits, and that suppliers that try to get around it by enrolling as another supplier type could face reapplication bars of up to 10 years. The moratorium applies to Medicare; CMS left it to each state to decide whether to adopt a similar measure in Medicaid and the Children's Health Insurance Program.

CMS points to revocation and referral data

CMS said its review of Medicare data found that medical supply company specialties had a 17% revocation rate from 2023 to October 2025, "nearly triple the rate for other DMEPOS supplier types." All seven types ranked in the top 20 of more than 80 DMEPOS supplier specialties for the share of suppliers revoked at least once since 2023, and six of the seven were in the top 10 for law enforcement referrals, according to the notice. The press release said the moratorium builds on CMS stopping more than $1.5 billion in suspected fraudulent DMEPOS billing last year.

HME Business reported on February 26 that the notice also cites Office of Inspector General findings on DMEPOS fraud and says the moratorium is intended to complement other safeguards, such as site visits, surety bonds and annual reaccreditation. Comments on the related request for information, part of CMS's Comprehensive Regulations to Uncover Suspicious Healthcare (CRUSH) initiative, are due March 30, according to the press release.