In a Notice to be published in the Federal Register on February 27, 2026, the Centers for Medicare and Medicaid Services (CMS) is imposing a nationwide (including all states, territories and the District of Columbia) moratorium on the initial Medicare enrollment of many new fee-for-service durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) suppliers. The initial term of the moratorium is six months, but it can be extended.
This moratorium will have significant implications for the DMEPOS industry. It will effectively put de novo expansion plans on hold for many DMEPOS suppliers for the next six months (and perhaps longer). In conjunction with the newly implemented 36-month rule for changes in majority ownership, it could have significant implications for planned transactions. It will also complicate the plans of some organizations trying to enter the DMEPOS industry. Finally, as explained below, the reach of this moratorium also may be felt well beyond Medicare and well beyond the initial six months.
Details of the CMS Moratorium Notice
According to the CMS Notice, the moratorium is based on “longstanding program integrity problems within the overall DMEPOS supplier sphere.” CMS consulted with the Department of Health and Human Services – Office of Inspector General (OIG) and the Department of Justice in reaching its conclusion that the moratorium is needed to address longstanding fraud, waste, and abuse in the DMEPOS industry.
The moratorium applies to the initial enrollment of the following seven supplier types:
- Medical supply company.
- Medical supply company with orthotics personnel.
- Medical supply company with pedorthic personnel.
- Medical supply company with prosthetics personnel.
- Medical supply company with prosthetics and orthotic personnel.
- Medical supply company with registered pharmacist.
- Medical supply company with respiratory therapist.
For purposes of the moratorium, a medical supply company is considered a business whose principal function is to furnish DMEPOS directly to another party. It applies regardless of whether that other party is a beneficiary with a medical order or a medical provider or supplier.
CMS specifically notes that a grocery store, pharmacy, or inpatient/outpatient medical provider generally does not have a principal function to provide DMEPOS; as such, this moratorium would generally not apply to initial Medicare enrollment applications from these types of organizations. Further, where a specific type of personnel is mentioned above, the supplier must have at least one such individual serving in an employment, advisory, contractual, or other role for the moratorium to apply.
The moratorium does not apply to any of the following:
- Any enrollment application that has been received by the Medicare contractor prior to the date the moratorium was imposed.
- Changes in ownership (except non-exempt changes in majority ownership that require an initial enrollment due to the 36-month rule, because such enrollment is barred during the moratorium).
- Changes in practice location (however, this regulatory exception will not apply as a practical matter to DMEPOS suppliers because each practice location must be separately enrolled and thus a change of practice location for a DMEPOS supplier requires a new, initial enrollment which is barred during the moratorium).
- Changes in provider or supplier information (such as phone number or address).
CMS cautions medical supply companies from attempting to circumvent the moratorium by enrolling in another DMEPOS supplier type. Such circumvention could lead to the supplier being effectively banned from Medicare for many years and subject to OIG investigation and possible criminal, civil, or administrative penalties.
Under the applicable regulations, temporary moratoria are effective for a period of six months but can be extended for additional six-month periods. CMS has previously exercised its authority to implement moratoria on new enrollments, such as home health agencies and ambulance suppliers in certain counties. These moratoria were extended multiple times and expanded to additional counties and then certain states in their entirety. This underscores the possibility that this moratorium on initial Medicare enrollment for certain DMEPOS suppliers could last well beyond the initial six-month period.
On its face, this moratorium only applies to enrollment in the Medicare program. CMS indicated in the Notice that each individual state should decide whether some form of a DMEPOS moratorium is appropriate for their respective Medicaid and CHIP programs. Even though CMS is not applying the moratorium to Medicaid and CHIP programs, such programs and some commercial payors often require Medicare enrollment as a prerequisite to their own enrollment; as such, the bar against enrollment in Medicare may practically be a bar to participation in some state programs or some commercial payors.
Please reference our prior publication on the newly-implemented restrictions under the 36-month rule that limits changes in majority ownership of certain DMEPOS suppliers.
If you have any questions regarding how this may impact your organization or transaction, please contact the authors.