(MAJOR!) DMEPOS Provider Enrollment Moratorium Announcement [2.25.26]

February 26, 2026 General

WHAT HHS & CMS JUST FILED: The U.S. Department of Health and Human Services (“HHS”) and Centers for Medicare & Medicaid Services (“CMS”) just filed [2.25.26] a notice announcing a 6-month, nationwide temporary moratorium on Medicare enrollment for certain DMEPOS supplier “medical supply company” specialty types.

The moratorium is NATIONWIDE (all states/territories/DC) and – starting on the effective date [scheduled for Feb. 27, 2026] – CMS will not enroll new suppliers (and no new practice locations for existing businesses) in the covered specialty types, unless the supplier’s enrollment application was received by the Medicare contractor before the moratorium’s effective date.

Covered supplier types (who is included): The moratorium applies to these seven DMEPOS supplier specialty 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 prosthetic and orthotic personnel;
  • Medical supply company with registered pharmacist; and
  • Medical supply company with respiratory therapist.

For moratorium applicability only, CMS defines a “medical supply company” as a business whose principal function is furnishing DMEPOS supplies directly to another party (e.g., beneficiaries with an order – often via mail order – and/or other providers/suppliers). CMS notes the moratorium would generally not apply where DMEPOS is not the principal function (examples given: grocery stores, pharmacies, inpatient/outpatient providers).

CMS also says it will closely screen DMEPOS applications submitted during the moratorium to ensure an applicant is not actually a medical supply company.

PRACTICAL IMPACTS:

Impact on DMEPOS suppliers looking to enroll as a (brand) new provider OR establish a new business location”

If you are a medical equipment company that fits into one of the seven medical supply company specialties, you should expect:

  • No new Medicare enrollment during the moratorium period.
  • No enrollment of new practice locations for those same specialty types during the moratorium.

Takeaway: for “newco” entrants or existing businesses looking to establish a new practice location, the gating issue is whether CMS views your business’s principal function as furnishing DMEPOS supplies directly to beneficiaries. If yes, and you fall into one of the seven types, Medicare enrollment is effectively paused for 6 months (subject to extensions).

Impact on buying/selling majority ownership in an existing enrolled DMEPOS supplier 

Baseline rule: “changes in ownership” are generally not blocked by the moratorium.

CMS reiterates the regulatory principle that a temporary enrollment moratorium does not apply to changes in ownership.

So, for many DMEPOS transactions, a typical change of ownership (“CHOW”) for an already-enrolled supplier should not be stopped solely because of the moratorium.

The major ownership “trap door”: non-exempt change in minority ownership (“CIMO”) within 36 months can turn the deal into a barred “new enrollment”

CMS specifically calls out 42 CFR § 424.551:

If a DMEPOS supplier undergoes a non-exempt CIMO within 36 months of its initial enrollment (or within 36 months of its most recent CIMO), the supplier must enroll as a brand-new supplier; it must undergo a survey and become newly accredited, and the supplier’s current enrollment is terminated.

CMS then makes the key linkage to this moratorium:

Because that “reset” is treated as an initial enrollment, the moratorium would prohibit the supplier (if it is one of the seven medical supply company specialty types) from reenrolling during the moratorium – and the usual moratorium exemption for changes of ownership would not apply in this § 424.551 scenario.

Takeaway (majority buy/sell):

  • If the target is a medical supply company specialty and your transaction structure is (or could be deemed) a non-exempt CIMO, diligence needs to focus on whether the supplier is within that 36-month window from initial enrollment or last CIMO – because the transaction can force a termination + “brand new” re-enrollment, which would be blocked during the moratorium.
  • If the transaction is a change in ownership that does not trigger the § 424.551 “brand new supplier” requirement, the moratorium is generally not intended to block the ownership change itself.

BOTTOM LINE:

  • New entrant or location enrollment: effectively paused for 6 months if you fit the “medical supply company” definition and one of the seven specialties.
  • M&A / majority ownership: generally not barred as a “change in ownership,” but if your deal triggers a non-exempt CIMO within 36 months (causing termination and “brand new” enrollment), the moratorium can indirectly block the post-transaction ability to stay enrolled (for covered specialty types).

REFERENCES:

DISCLAIMER:

THIS PUBLICATION IS NOT INTENDED TO PROVIDE LEGAL ADVICE NOR DOES IT FORM ANY ATTORNEY-CLIENT RELATIONSHIP. CONTACT AND ENGAGE COMPETENT HEALTHCARE COUNSEL TO DISCUSS YOUR FACT-SPECIFIC SCENARIO.

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