Health Care Law Blog

In May 2026, the Centers for Medicare & Medicaid Services (CMS) implemented a nationwide six-month moratorium on new Medicare enrollments for home health agencies (HHAs) and hospices. The moratorium has raised immediate questions for providers and investors, particularly regarding whether ownership changes or restructuring transactions may be impacted.

1. Scope of the Moratorium

The moratorium, effective May 13, 2026, is aimed primarily at:

• New Medicare enrollment applications for HHAs and hospices; and
• Certain ownership transactions that require a new enrollment, including non-exempt changes in majority ownership under CMS’s “36-month rule.”

Importantly, the moratorium does not apply to existing Medicare-enrolled providers that are making permissible updates to their enrollment information, provided those updates do not trigger a new enrollment requirement.

2. Key Distinction: CHOI vs. CHOW

A critical issue in evaluating transactions during the moratorium is whether the transaction is characterized as:

• A Change of Information (CHOI) – generally involving updates to ownership or control that do not require a new enrollment; or
• A Change of Ownership (CHOW) – which may trigger a new enrollment depending on the circumstances.

For transactions involving indirect upstream ownership changes, where:

• The enrolled provider entity remains the same,
• There is no change in direct ownership of the provider, and
• The provider continues operating under its existing Medicare certification,

The transaction may properly be treated as a CHOI. In those cases, the transaction is typically reportable to CMS but does not fall within the moratorium’s restrictions.

3. The 36-Month Rule: Where Risk Arises

The primary area of risk is CMS’s so called “36-month rule”, which was originally meant to put an end to “churning” of provider numbers of home health agencies which had no legitimate business. In 2024, the 36-month rule was also extended to hospices agencies. Under this rule, a change in majority ownership (i.e., more than 50% direct ownership) within 36 months from an agency’s initial Medicare enrollment can:

• Prevent the transfer of the existing Medicare provider agreement; and
• Require the new owner to enroll as a new Medicare provider.

If a transaction triggers a non-exempt change in majority ownership:

• The provider may be required to submit a new enrollment application; and
• That application could be denied during the moratorium period, preventing the provider from billing Medicare until approved.

Accordingly, even where a transaction appears to be a routine restructuring, careful analysis is required to confirm that no change in majority ownership has occurred. These rules are very technical and can be a trap for the unwary.

4. Michigan Considerations

States are generally required to comply with federal enrollment moratoria under the Affordable Care Act, unless doing so would adversely impact beneficiary access.

In Michigan, Medicaid provider enrollment is administered through the CHAMPS system. While there is no clearly identified Michigan-specific moratorium tied directly to this federal action, state policy recognizes that temporary enrollment limits may be imposed for high-risk provider categories, including home health and hospice.

5. Practical Takeaways for Providers and Investors

For existing Medicare-enrolled HHAs and hospices, the moratorium does not necessarily preclude ownership restructuring but it does increase the importance of proper transaction characterization.

Transactions involving indirect or minority ownership changes are often permissible as CHOIs, but any transaction that could be viewed as shifting majority control should be closely scrutinized.

Before proceeding with a transaction, providers should consider:

• Whether the transaction could be construed as a change in majority ownership;
• Whether it triggers a new enrollment requirement; and
• Confirming treatment with the applicable Medicare Administrative Contractor (MAC) or CMS representative.

Bottom Line

The CMS moratorium is targeted at new entrants and certain ownership transfers, not routine updates for existing providers. However, the intersection with the 36-month rule creates meaningful risk if a transaction crosses into majority ownership territory.

Careful structuring and proactive confirmation with CMS or the appropriate MAC remains essential to preserving uninterrupted Medicare billing privileges.

If you have questions about how the CMS enrollment moratorium or the 36-month rule may affect a pending transaction, contact our health care law team.