By Jody Godoy and Courtney Rozen
May 13 (Reuters) – The Trump administration will block new home healthcare and hospice providers from enrolling in Medicare for at least the next six months, according to a government statement posted on Wednesday, citing concerns about widespread fraud.
The moratorium will temporarily bar new providers in those categories from signing up for reimbursement from Medicare, a U.S. government health insurance program for Americans aged 65 and older and those with disabilities. It will not impact providers already registered with Medicare, according to the Centers for Medicare & Medicaid Services, which oversees the program.
It is the latest move by Vice President JD Vance’s anti-fraud task force that aims to crack down on healthcare scams.
The U.S. government has for years tried to tackle fraudulent payments from Medicare to hospice and home healthcare providers.
Scammers can bill Medicare for services that the patient doesn’t need or want, allowing them to rake in millions of dollars from the U.S. government. The national fraud prevention group Senior Medicare Patrol has repeatedly issued alerts on the issue.
It is unusual to pause registrations nationwide. CMS has paused enrollments in the past in specific counties when staff suspected fraud tied to those locations, including in 2013, when it barred new providers based in Florida’s Miami-Dade County and several counties in Illinois.
CMS Administrator Mehmet Oz did not provide specific evidence to reporters on Wednesday to explain why the Trump administration believes it is necessary to bar new enrollments across the U.S., as opposed to in specific areas.
Fraudsters that have been barred from collecting Medicare payments often try to get around the ban by starting a new company and registering for payments, said Stephen Lee, a former federal prosecutor who worked in Illinois at the time of the 2013 enrollment pause.
But pausing new enrollments doesn’t help alleviate theft by companies that are already enrolled in Medicare, he said. “It would be a mistake to think that this tool alone will work.”
Reuters was first to report on the pause. The moratorium will give CMS time to account for hospice and home health expenditures under the Medicare program and create additional guidance, an administration official said.
The Trump administration has been criticized for mixing the president’s political preferences with agency efforts to eliminate fraud in government payments. The administration singled out some Democratic-led states, including California and Minnesota, as not doing enough to combat fraud.
Vance on Wednesday said the Trump administration would defer $1.3 billion in funding for California to detect and prevent Medicaid fraud. Medicaid is the federal- and state-run health program for low-income Americans.
DIFFERENT APPROACHES FROM INDUSTRY
In 2024, 1.8 million Medicare beneficiaries received hospice care at a cost of $28.3 billion, according to the Medicare Payment Advisory Commission. The same year, 2.7 million patients on Medicare received home healthcare at a cost of $16 billion, according to the agency that advises Congress on healthcare spending.
Vance’s task force has recently taken action against hospice services, particularly in California, where the state auditor said in 2022 that lax oversight had enabled large-scale fraud.
Industry groups had urged different approaches as the Trump administration weighed potential action.
The National Partnership for Healthcare and Hospice Innovation said in March it supported temporarily pausing hospice provider enrollments. The National Alliance for Care at Home warned against overly broad action that could deter doctors and patients from recommending or seeking care.
Major home health operators in the U.S. include BrightSpring Health Services, private equity-backed Matrix Medical Network, and UnitedHealth Group. Chemed Corporation subsidiary VITAS Healthcare is among the top hospice care providers.
BROADER CRACKDOWN
Tens of billions of dollars are estimated to be lost in the United States through healthcare fraud each year, translating into higher costs for patients and employers, according to the National Health Care Anti-Fraud Association.
The administration of U.S. President Donald Trump has also sought to tackle other healthcare sectors it has deemed a fraud risk. The administration in February paused Medicare enrollments by suppliers of durable medical equipment, such as prostheses.
The fraud crackdown started in Minnesota, where the Trump administration said in February it would withhold $259 million in funds for Medicaid.
Trump has repeatedly invoked a scandal in Minnesota that dates back to 2020, in which 47 people were accused of defrauding $250 million from a state-run, federally funded child nutrition program. Many of the defendants in that case were Somali Americans, according to local news reports.
The controversy prompted Trump earlier this year to send in thousands of federal immigration officers as part of a migrant crackdown. He shifted tactics to a less aggressive approach after federal officers shot dead two people protesting his policies.
In announcing the fraud task force in March, Trump, without providing evidence, said fraud allegations were higher in Democratic-led states than in Republican-led states.
(Reporting by Jody Godoy in New York, Editing by Rosalba O’Brien and Bill Berkrot)
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