For home health agencies, the rapidly evolving regulatory environment has created a new strategic constraint: CMS has implemented a temporary, nationwide moratorium on new Medicare enrollment for home health agencies (HHAs).
Effective May 13, 2026, the moratorium affects initial Medicare enrollment applications for new HHAs, new HHA branches and practice locations, and certain changes in majority ownership that require a new enrollment. CMS has stated that the moratorium will remain in effect for six months, with the possibility of extension in additional six-month increments.
The policy is designed to address fraud, waste, and abuse risks in the home health sector. For compliant agencies, however, it also creates immediate questions about expansion, acquisitions, geographic growth, and future planning.
This article explains what the moratorium means, who may be grandfathered in, and how healthcare organizations can respond through stronger healthcare regulatory compliance and operational planning.
What the CMS Moratorium Does
CMS’s official provider enrollment moratoria guidance states that the current moratorium applies nationwide to initial Medicare enrollment for HHAs and hospices.
According to the Federal Register notice, CMS may impose temporary enrollment moratoria when it determines that a provider type presents a significant potential for fraud, waste, or abuse.
The current policy affects:
- New HHA enrollment: Brand-new home health agencies cannot enroll in Medicare during the moratorium.
- New branches and practice locations: Existing HHAs generally cannot add new Medicare-enrolled branches or practice locations during this period.
- Certain ownership changes: Non-exempt changes in majority ownership that trigger the 36-month rule may require a new enrollment and therefore be blocked.
- Post-May 13 applications: Applications received by the Medicare Administrative Contractor (MAC) on or after the effective date may be denied because of the moratorium.
The moratorium applies across all states, territories, and the District of Columbia. A prospective agency cannot avoid the restriction simply by choosing a different state or shifting its planned launch to a nearby market.
Who Is Grandfathered In?
The most important grandfathering consideration is not simply whether an agency existed before May 13. It is whether the relevant enrollment application was received by the applicable MAC before the moratorium took effect.
Applications received by the MAC before May 13, 2026, are generally not subject to the moratorium. This may include applications for:
- A new HHA
- A new branch
- A new practice location
- An ownership change that otherwise requires initial enrollment
Documentation matters. Agencies should preserve evidence showing:
- Application submission date: Retain confirmation records, correspondence, and transmission receipts.
- MAC receipt: Verify that the application was actually received by the MAC before May 13, rather than merely prepared or internally approved.
- Application status: Monitor whether the application remains pending, requires correction, or has been returned.
- Resubmission history: Understand that a returned or rejected application may need to be resubmitted after the effective date, potentially placing it under the moratorium.
A submitted application is not automatically safe if it was incomplete, returned, or rejected and must be filed again. Before assuming that a project is grandfathered in, review the enrollment record carefully with your MAC and qualified regulatory advisors.
What the Moratorium Means for Existing HHAs
Existing Medicare-enrolled HHAs are generally allowed to continue operating and billing Medicare, provided they remain compliant with applicable requirements.
CMS has emphasized that the moratorium does not terminate current enrollments. It is primarily directed at new enrollment events rather than the normal operation of agencies already participating in Medicare.
Existing agencies may generally continue with:
- Ongoing patient services: Continue delivering approved home health services to Medicare beneficiaries.
- Routine enrollment maintenance: Complete required revalidation and information updates.
- Provider information changes: Update telephone numbers, contact information, and other applicable enrollment details.
- Permitted relocations: Relocate an existing practice location when the change satisfies applicable Medicare requirements.
- Certain ownership transactions: Complete changes of ownership that do not require an initial enrollment.
That protection should not be interpreted as a permanent exemption from oversight. Existing agencies remain subject to surveys, audits, payment reviews, documentation requirements, quality reporting, and enforcement activity.
In fact, the moratorium signals that CMS is applying more aggressive program-integrity controls across the home health industry. Strong healthcare regulatory compliance is therefore not optional; it is central to protecting billing privileges and organizational continuity.
How Expansion Plans Are Affected
The most immediate impact will be felt by agencies planning to grow through new locations.
New Branches and Practice Locations
CMS treats an HHA branch as a practice location for enrollment purposes. As a result, opening a new branch in another county, metropolitan area, or state may be treated as a new enrollment event and blocked during the moratorium.
This applies even when:
- The parent HHA is already Medicare-certified.
- The proposed branch will operate under the same ownership.
- The agency has existing staff available.
- The location is in a market where patient demand is strong.
- The branch is part of an expansion plan approved before May 13 but not submitted to the MAC before that date.
Do not assume that a new office is merely an internal operational change. Determine how CMS and your MAC will classify the proposed location before signing a lease, hiring staff, or committing capital.
Geographic and Service-Area Expansion
A change to an agency’s geographic service area is more nuanced. The moratorium clearly restricts new branches and practice locations, but CMS has not provided the same level of public detail for every possible service-area modification.
A service-area expansion may be more defensible when it:
- Uses the existing location: No new branch or practice location is established.
- Maintains operational control: The agency can supervise staff, documentation, scheduling, and quality across the expanded area.
- Meets state requirements: Licensure, survey, staffing, and service-area rules are satisfied.
- Does not trigger initial enrollment: The change is treated as an information or service-area update rather than a new enrollment.
However, aggressive geographic growth can create compliance risk if the expansion effectively functions as a separate operating site. Before proceeding, collaborate with your MAC, state licensing authority, compliance leadership, and qualified counsel.
The 36-Month Rule and Ownership Transactions
The moratorium also intersects with the Medicare HHA 36-month rule.
Under this rule, certain changes in majority ownership within 36 months of initial enrollment or a prior change in majority ownership may require the HHA to enroll as a new provider. If a transaction triggers that requirement, the moratorium may prevent the agency from completing the new enrollment.
Not every ownership transaction is automatically prohibited. Depending on the facts, the transaction may be permitted when it:
- Falls outside the 36-month period: The ownership change does not trigger a new enrollment.
- Qualifies for an exception: Certain regulatory exceptions may apply.
- Allows assignment of the existing provider agreement: The transaction does not require initial enrollment.
- Involves an indirect ownership change: The structure may not create a prohibited CIMO.
Because ownership structures are complex, evaluate the enrollment consequences before executing a purchase agreement or restructuring plan. A transaction that appears operationally simple may have significant Medicare participation consequences.
What Agencies Should Do Now
The moratorium should not cause compliant agencies to stop planning. Instead, it should encourage more disciplined, staged growth.
Assess the following areas immediately:
- Expansion pipeline: Identify every planned agency, branch, practice location, acquisition, relocation, or ownership transaction.
- Enrollment status: Confirm which applications were received by the MAC before May 13, 2026.
- Documentation controls: Create a centralized file for submission confirmations, MAC correspondence, and application corrections.
- Local market strategy: Review patient demand, referral patterns, staffing availability, licensing requirements, and access-to-care considerations in each proposed region.
- Operational readiness: Validate that current systems can support additional volume before pursuing expansion after the moratorium ends.
- Compliance infrastructure: Strengthen policies for documentation, billing, ownership disclosure, credentialing, quality reporting, and internal auditing.
- Financial planning: Model the effect of delayed openings, postponed acquisitions, idle capital, and extended administrative timelines.
At LAP Strategies and Consulting, our healthcare consulting services help regulated agencies evaluate growth opportunities, eliminate operational bottlenecks, strengthen oversight, and build infrastructure for sustainable performance.
Frequently Asked Questions
Does the moratorium affect existing Medicare-enrolled HHAs?
Generally, no. Existing HHAs may continue operating and billing Medicare as long as they remain compliant with applicable requirements. The moratorium primarily restricts new enrollment events and certain ownership changes requiring initial enrollment.
What does “grandfathered in” mean under the moratorium?
An enrollment application is generally grandfathered when the applicable MAC received it before May 13, 2026. Agencies should verify receipt and preserve documentation rather than relying only on the date an application was prepared or submitted internally.
Can an existing HHA open a new branch during the moratorium?
Generally, no. CMS treats a new HHA branch as a practice location, and new practice-location enrollment is restricted during the moratorium.
Can an HHA expand into additional counties without opening a branch?
Possibly, depending on how the change is structured and how CMS, the MAC, and state authorities classify it. Confirm whether the change is a permitted service-area update or whether it effectively creates a new practice location.
Can an HHA be sold during the moratorium?
Some transactions may proceed, particularly when they do not require initial enrollment. However, a non-exempt change in majority ownership subject to the 36-month rule may be blocked. Obtain transaction-specific guidance before closing.
What happens to applications submitted after May 13?
CMS states that applications subject to the moratorium may be denied and may need to be resubmitted after the moratorium is lifted. Agencies should monitor CMS announcements because the moratorium may be extended.
Wrapping Up: Turn Regulatory Uncertainty Into Strategic Readiness
The CMS moratorium changes the timeline for new Medicare home health enrollment, but it does not eliminate opportunities for operational improvement or future growth.
For existing agencies, the priority should be to protect current enrollment, maintain strong healthcare regulatory compliance, and prepare infrastructure that can support expansion when restrictions ease. For organizations pursuing acquisitions or new markets, the priority should be transaction diligence, accurate enrollment analysis, and disciplined local implementation.
Your next steps should be to:
- Verify grandfathering status: Confirm MAC receipt dates for all pending applications.
- Classify expansion plans: Separate service-area updates from new branches and practice locations.
- Review ownership transactions: Determine whether the 36-month rule requires initial enrollment.
- Strengthen compliance controls: Audit documentation, billing, enrollment, and ownership records.
- Build scalable systems: Improve workflows, accountability, and performance visibility before adding volume.
- Seek specialized guidance: Collaborate with your MAC, state authorities, legal counsel, and healthcare consulting professionals.
In a dynamic regulatory environment, sustainable success depends on preparation. By investing in operational excellence today, you can reduce uncertainty, protect revenue, and position your agency for compliant, resilient growth when the next enrollment window opens.
For support with expansion planning, compliance infrastructure, or organizational development, contact LAP Strategies and Consulting.
This article is for general informational purposes and does not constitute legal, reimbursement, or regulatory advice. Requirements may change, and agencies should review current CMS guidance, MAC instructions, state requirements, and transaction-specific facts with qualified advisors.