CMS Imposes Unprecedented Nationwide Moratorium on DMEPOS Medicare Enrollment

The decision by the Centers for Medicare & Medicaid Services (CMS) to implement a nationwide moratorium on new Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) enrollments marks a significant escalation in the federal government's fight against healthcare fraud. Historically, CMS has utilized its Affordable Care Act (ACA) authority to target specific geographic "hotspots" such as Miami, Chicago, or Detroit where fraud was deemed rampant. By expanding this action to a nationwide scope—covering all 50 states, the District of Columbia, and all U.S. territories—CMS is signaling that the risk of fraud in the DMEPOS sector is no longer localized but has become a systemic threat to the integrity of the Medicare program.

The regulatory trigger for this action is rooted in years of escalating data-driven concerns. CMS cited extensive consultations with the HHS Office of Inspector General (OIG) and the Department of Justice (DOJ), referencing reports that highlight billions of dollars in potentially improper Medicare payments. Specifically, CMS analysis of enrollment and claims data from 2023 through October 2025 revealed a concerning spike in questionable billing for items such as orthotic braces and urinary catheters. This moratorium is not merely an administrative pause; it is a defensive maneuver designed to prevent high-risk entities from obtaining a "license to hunt" for federal funds through the Medicare billing system.

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CMS cited extensive consultations with the HHS Office of Inspector General (OIG) and the Department of Justice (DOJ), referencing reports that highlight billions of dollars in potentially improper Medicare payments.

For legal and compliance professionals, the nuances of the moratorium's scope are critical. The freeze applies to seven specific subtypes of medical supply companies, including those employing specialized personnel like respiratory therapists, pharmacists, or orthotic specialists. It targets any business whose "principal function" is furnishing DMEPOS supplies to beneficiaries or other providers. Crucially, the moratorium applies to all new enrollments and new, separately enrolled practice locations. This includes changes in ownership (CHOW) that fall under the "36-month rule"—a regulation designed to prevent the rapid flipping of newly enrolled entities to circumvent scrutiny. However, the moratorium does not halt existing suppliers from changing their physical locations or updating administrative information, such as name changes.