Yesterday, CMS announced six-month moratoria on home health and hospice Medicare enrollment. While there have been rumblings that CMS would take fairly drastic action to curb home health and hospice fraud, the moratorium represents a blunt instrument to do so. 

The moratoria apply to new home health and hospice agencies and new branch locations. It applies nationwide and can be extended in six-month increments. 

Not to let my pessimistic streak shine through, but based on CMS precedent, the industry might need to settle into this moratorium. It could be a while.

Under former President Barack Obama, CMS placed a moratorium on home health enrollment in 2013. It started in just a few counties in Florida and Illinois, but eventually expanded to all of Florida, Illinois, Michigan and Texas. It was continually extended in six-month increments and was in place for a total of 5.5 years.

The history demands that industry stakeholders adjust their strategies to find their new normal quickly. CMS’ decision has extensive practical and downstream implications. Home health providers must determine how their potential for growth is impacted, buyers need to carefully consider the potential for stalled or slowed deals and Medicaid providers are well-advised to consider this writing on the wall.

In this week’s exclusive, members-only HHCN+Update, I’ll dive into the home health moratorium, offering analysis and key takeaways, including:

– What this means for organic growth

– How M&A and investment will change

– The potentially looming Medicaid crossover

A hard stop to de novo growth

The enrollment freeze necessitates an immediate change in providers’ growth strategies. The moratorium takes one of the industry’s clearest growth pathways – opening new Medicare-certified locations – off the table. .

It’s key to emphasize that this moratorium does not just implicate startups or potential new entrants in the space. Existing and sophisticated operators will see their expansion options limited. In the words of the National Alliance for Care at Home (the Alliance), “an enrollment moratorium does not distinguish between bad actors and compliant providers.”

Providers can still operate, bill and maintain current enrollments while the moratorium persists, but this cuts off providers’ ability to grow by planting flags in new Medicare markets. Coming off of HHCN’s Capital+Strategy event, one of the key takeaways I walked away with was the importance of de novo growth. Experts described de novo growth as a version of “walk before you run,” so for providers that are not currently acquisitive, this shuts down a critical growth lever. 

The freeze to de novo growth does not limit all types of organic growth. This is where I think we’ll see the key shift happen in terms of growth strategies: Providers will transfer focus to increasing census within existing service areas, growing their referral networks, increasing clinician efficiency to serve more patients and other ways of increasing revenue at an existing location.

These methods are limited by several factors. Staffing shortages still persist; there are only so many ways providers can increase efficiency without shooting themselves in the foot; and clinicians may be reluctant to use any newfound windows of time to see as many patients as possible.

This shift also limits the potential for underserved areas to receive new attention. As usual, rural communities will fare worse under this new regulatory development. But all providers looking to grow need to strategize quickly to determine how best to address the enrollment freeze – especially since this moratorium may be far longer than six months.

Hurdles to acquisitive growth

So if a provider can’t grow their geography via de novo growth, how about M&A? It’s not prohibited under the moratorium. But the moratorium does make home health M&A more reputationally fraught, more operationally complex and potentially slower to close.

Stroke of the pen risk was a common talking point in 2025, given that CMS’ proposed home health Medicare base payment rate for 2026 featured the largest cut ever proposed. The moratorium represents an even stronger version of that risk. 

CMS framed the moratorium aggressively.

“The moratoria will allow CMS to temporarily halt the influx of new providers into these high-risk categories – a key source of fraudulent activity,” read a press release. 

CMS Administrator Dr. Mehmet Oz used phrases including “deeply troubling fraud,” “bad actors exploiting some of our most vulnerable Medicare patients,” and “stealing money from the American taxpayer” when referring to the home health industry as a whole.

There will be more news stories linking home health and fraud to come, and the language being used by government officials and the bad headlines will lead to more scrutiny from investors and more caution from buyers.

In response, operators and boards will have to move sensitively and prioritize compliance above all else. Additionally, currently in-flight transactions will probably take more time to close. Buyers and sellers should prepare for a lag from their expected run times.

New acquisitions will have to ensure they do not trigger the moratorium’s rules regarding certain changes in majority ownership. I reckon this will make deals more expensive, as buyers and sellers will likely increasingly engage outside experts. 

Between the extra compliance steps and the headline risk, the upward trend of home health M&A in 2026 is bound to suffer.

Medicaid concerns

The new moratorium affects only Medicare home health and hospice, but an FAQ released by CMS raises concerns for Medicaid home-based care providers.

I want to include CMS’ full answer to the question: “How will the moratorium affect Medicaid HHA and Hospice providers?”

“At this time, we believe it is in the best interest of Medicaid and CHIP beneficiaries across the country to allow each state to decide whether some form of a HHA and/or Hospice moratorium is appropriate for their respective Medicaid and CHIP programs, and the scope of any such moratorium. Each state has greater expertise and experience with their pool of providers, including their state requirements for HHAs and Hospices, than CMS. Nevertheless, CMS encourages each state to, as appropriate, implement a HHA and Hospice provider moratorium tailored to the specifics of their beneficiary population, as well as any geographic considerations. Additionally, CMS is offering every state and territory the opportunity to consult with CMS on the prospect of implementing a Medicaid-based, CHIP-based, or a Medicaid and CHIP-based HHA and/or Hospice moratorium in their jurisdictions.”

As you can see, CMS is directly encouraging states to consider a Medicaid home health and hospice provider moratorium. CMS could have simply stated that the Medicare moratorium does not apply to Medicaid and left it there. Providers not currently implicated in CMS’ new moratorium may want to buckle up.

It is worth noting that the 2013 Medicare HHA moratorium also applied to Medicaid in the affected states. That was not optional – states in the moratorium areas were required to comply unless they determined it would adversely affect beneficiary access. Now, CMS is changing its approach and leaving it to state discretion.

Given the second Trump administration’s focus on fraud, waste and abuse, I think it’s unlikely states will just ignore CMS’ call to consider moratoria of their own. Providers operating in states that the CMS has specifically flagged as hotbeds of Medicare fraud – California, Nevada, Arizona, etc. – should be especially wary. The political affiliation of a given state is also critical to consider.

The Medicare moratorium and the freeze on de novo growth are the headlines for existing home health providers. But the risks to M&A and increased oversight should be top of mind as well. And Medicaid providers can’t keep their eyes off the ball. States will be making some big decisions in the near future, and CMS just made it clear which way it thinks these decisions should go.