CMS Imposes Unprecedented Nationwide Moratorium on New DMEPOS Enrollments

The Centers for Medicare & Medicaid Services (CMS) has taken a decisive and historically significant step by issuing a nationwide moratorium on the enrollment of new Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) suppliers. Utilizing authority granted under the Affordable Care Act, the agency has effectively frozen the entry of new medical supply companies into the Medicare program for an initial period of six months. This move marks a departure from previous regulatory strategies that typically targeted specific geographic 'hotspots' known for high rates of fraud. By applying this moratorium to all 50 states, the District of Columbia, and U.S. territories, CMS is signaling that the integrity risks associated with DMEPOS are now considered a systemic, national threat rather than a localized issue.

The impetus for this drastic measure stems from years of escalating concern regarding fraudulent billing schemes that have drained billions from the Medicare Trust Funds. CMS cited extensive consultations with the Department of Justice (DOJ) and the HHS Office of Inspector General (OIG), the latter of which reported in early 2025 that improper payments to DME suppliers had reached critical levels. Internal data from CMS further supported this action, revealing a sharp 17% increase in enrollment and claims activity from 2023 through late 2025. This surge in volume, often disconnected from actual clinical need, suggested that bad actors were rapidly scaling operations to exploit existing loopholes in the reimbursement system.

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The Centers for Medicare & Medicaid Services (CMS) has taken a decisive and historically significant step by issuing a nationwide moratorium on the enrollment of new Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) suppliers.

The scope of the moratorium is precisely defined, targeting seven specific subspecialties where the 'principal function' of the business is furnishing DMEPOS items to beneficiaries or other providers. These include standard medical supply companies as well as those employing specialized personnel such as orthotists, prosthetists, pedorthists, pharmacists, and respiratory therapists. For these entities, the freeze applies not only to entirely new enrollments but also to the addition of new practice locations and certain changes in ownership. Specifically, any change in ownership that triggers a new enrollment—such as asset transfers or those falling under the '36-month rule'—is effectively blocked for the duration of the moratorium.