New Nationwide Enrollment Moratorium on Certain DMEPOS Medical Supply Companies

Key Takeaways

• CMS imposes nationwide DMEPOS enrollment moratorium to combat fraud risk. Effective February 27, 2026, CMS has implemented a six‑month nationwide moratorium on new Medicare enrollment for certain DMEPOS medical supply companies and for most changes in majority ownership (“CIMOs”) that are treated as new enrollments.
• Existing suppliers can continue billing, but compliance obligations remain high. Current DMEPOS suppliers retain Medicare billing privileges but must maintain enrollment, accreditation, and regulatory compliance amid heightened CMS scrutiny.
• State Medicaid agencies may adopt parallel moratoria. Suppliers should watch for state‑specific announcements.

On February 27, 2026, the Centers for Medicare & Medicaid Services (“CMS”) implemented a temporary nationwide moratorium on Medicare enrollment of certain durable medical equipment, prosthetics, orthotics, and supplies (“DMEPOS”) medical supply companies. CMS is utilizing its program‑integrity authority to pause new enrollments in a sector it has identified as having heightened fraud, waste, and abuse risk while it conducts closer oversight.

The moratorium is initially in place for six months and may be renewed in additional six‑month increments via Federal Register notice and CMS web postings. CMS’ announcement can be found here.

Who Is Affected?

CMS will not approve new Medicare enrollments for the following DMEPOS supplier types:

• Medical supply companies
• Medical supply companies with orthotics personnel
• Medical supply companies with pedorthic personnel
• Medical supply companies with prosthetics personnel
• Medical supply companies with prosthetic and orthotic personnel
• Medical supply companies with a registered pharmacist
• Medical supply companies with a respiratory therapist

Initial Medicare enrollment applications for these supplier types submitted on or after the effective date will be denied while the moratorium is in force. CMS notes that exclusively for purposes of the moratorium,  a medical supply company is considered “a business whose principal function is to furnish DMEPOS supplies (regardless of supply type) directly to another party, such as, but not limited to: (1) beneficiaries with a medical order (for example, via mail order); (2) medical providers and suppliers; or (3) both.” The moratorium would generally not apply to companies whose principal function is typically not the provision of DMEPOS (e.g. grocery stores, inpatient medical provider, etc.).

Impact on Existing DMEPOS Suppliers

Existing enrolled DMEPOS supplier types subject to the moratorium may continue to participate in Medicare and bill for covered items and services. The moratorium does not retroactively invalidate current billing privileges, nor does it relieve suppliers of their ongoing enrollment, revalidation, accreditation, and compliance obligations.

Treatment of Changes in Ownership and CIMOs Under CMS 36-Month Rule

A key feature of the moratorium is its interaction with CMS’ 36‑month change in majority ownership (“CIMO”) rule. Under 42 C.F.R. § 424.550(b), as expanded in the CY 2026 Home Health PPS final rule, a DMEPOS supplier that undergoes a CIMO within 36 months of its initial enrollment or most recent CIMO is treated as a new supplier and must initially enroll again and obtain accreditation, unless an exception applies (for example, change due to death of an owner).

Because these CIMOs are treated as new enrollments, they are subject to the moratorium when they involve the affected medical supply company types. Thus, most CIMOs involving covered DMEPOS suppliers submitted on or after February 27, 2026, will be denied during the moratorium period because they are considered new enrollment.

Treatment of Pending and Future Applications

CMS will continue processing enrollment applications it received prior to the moratorium’s effective date. Initial enrollment applications for covered supplier types submitted on or after that date will be denied and must be refiled once the moratorium is lifted. Suppliers should therefore avoid submitting new Medicare enrollment applications for affected medical supply company types during the moratorium, as any such filings will be denied as a matter of policy rather than on their individual merits.

CMS does not grant case‑by‑case exceptions to the moratorium, and appeals are limited to whether the moratorium applies to that supplier, not whether it is appropriate or should be waived. In practice, suppliers cannot successfully appeal by arguing they are low‑risk or that local access needs justify an exception.

Medicaid and CHIP Considerations

Federal law requires state Medicaid programs to comply with Medicare moratoria unless doing so would harm beneficiary access, and CMS has encouraged states to consider similar actions for DMEPOS. For this moratorium, CMS has left implementation details to each state, which may choose whether to adopt a parallel Medicaid or CHIP moratorium, and, if so, for which provider types and areas.

DMEPOS suppliers should therefore monitor state Medicaid and CHIP communications for any state‑specific enrollment freezes or related guidance.

Practical Steps for DMEPOS Suppliers and Investors

DMEPOS suppliers, prospective entrants, and investors should consider the following actions during the moratorium period:

• Confirm ownership timelines. Identify DMEPOS medical supply companies within the 36‑month CIMO window and assess whether pending or planned transactions would be treated as new enrollments and therefore blocked.
• Adjust transaction and filing strategy. Include the moratorium in transaction timelines, closing conditions, and regulatory covenants; avoid triggering CIMOs that would require a new enrollment during the moratorium period.
• Consult with counsel regarding any proposed or pending DMEPOS transactions or ownership changes to assess how the moratorium and CIMO rules may affect deal timing, structure, and enrollment strategy.

For more information, please contact AGG Change of Ownership attorneys Jessica Grozine or Maggie Callahan.

The Arnall Golden Gregory Change of Ownership (“CHOW”) team leads all regulatory aspects of healthcare transactions for investors, operators, managers, capital partners, and developers of every size in all 50 states. The team streamlines the regulatory process so that clients close their transactions on or ahead of schedule. Whether obtaining licensure and Medicare/Medicaid approvals, structuring transactions to expedite closings, anticipating issues to minimize cash flow disruption, negotiating regulatory terms in deal documents, creatively resolving diligence issues, or advising on CHOW guidelines and compliance, the team provides extensive experience and practical solutions. To date, the CHOW team has served as primary regulatory counsel in transactions valued at more than $35 billion.