The Centers for Medicare & Medicaid Services (CMS) has announced a six-month nationwide temporary moratorium on the Medicare enrollment of seven types of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) medical supply companies, effective upon publication in the Federal Register on February 27, 2026. This measure affects new suppliers and additional practice locations throughout the United States, including territories and the District of Columbia. Providers currently enrolled in Medicare may continue billing without interruption. However, new enrollment applications submitted after the effective date will be denied. DMEPOS suppliers and pharmacies must promptly evaluate their enrollment status, supplier classifications, and compliance frameworks to address the implications of this development.

CMS derives its authority from section 1866(j)(7) of the Social Security Act, as implemented through 42 CFR 424.570. The agency has previously utilized this provision for targeted moratoria, beginning in 2013 with restrictions on home health agencies in counties such as Miami-Dade (Florida) and Cook (Illinois), later expanded to ambulance suppliers and additional regions in Florida, Texas, Michigan, Pennsylvania, and New Jersey. These measures were extended in six-month increments through January 2019, with selective lifts, such as the 2017 removal of non-emergency ambulance restrictions in Texas following Hurricane Harvey.

CMS's Analysis and Supporting Data

CMS's determination rests on an evaluation of Medicare fee-for-service enrollment and claims data from 2023 through October 2025, supplemented by consultations with the HHS Office of Inspector General (OIG) and Department of Justice (DOJ). Small DMEPOS suppliers—those associated with fewer than 25 enrollments per tax identification number—accounted for approximately 85% of payments, with medical supply companies comprising a significant portion. These seven supplier types exhibited a 17% revocation rate since 2023, substantially higher than the average across more than 80 DMEPOS specialties. They also ranked prominently in metrics for payment suspensions (five types in the top 10), law enforcement referrals (six in the top 10), and benefit integrity unit complaints (all seven in the top 15).

As of October 2025, nearly 80,000 DMEPOS suppliers were enrolled in Medicare, including over 6,000 medical supply companies (7.5% of the total). Annual new enrollments for these types average approximately 600 (300 per six months). CMS maintains that this established network, combined with mail-order capabilities and enrollment opportunities for other supplier types such as pharmacies, ensures beneficiary access.

OIG reports provide additional context, including a May 2024 audit on off-the-shelf orthotic braces (A-09-21-03019) identifying vulnerabilities in supplier practices and a February 2025 review of intermittent urinary catheters (A-09-22-03019) estimating $35.1 million in improper payments due to documentation deficiencies. Pending OIG work includes examinations of surety bonds and enrollment screening. CMS references recent DOJ enforcement actions involving medical supply companies, such as a California case resulting in over $24 million in alleged improper wheelchair claims and a Virginia judgment exceeding $12 million related to brace prescriptions.

Notably, medical supply companies submitted more than 70% of claim lines for 32 prefabricated orthotic brace codes on CMS's Master List of DMEPOS Items (vulnerable items subject to face-to-face and prior authorization requirements under 42 CFR 414.234), and over 80% for off-the-shelf braces.

Scope of the Moratorium and Key Exceptions

The moratorium applies to the following supplier types, defined as entities whose principal business is furnishing DMEPOS supplies to beneficiaries, providers, or others (e.g., via mail order):

• 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

• Medical supply company with respiratory therapist

The presence of specified personnel in any employment, advisory, or contractual capacity qualifies the supplier. Each practice location requires separate enrollment under 42 CFR 424.57(b)(1), rendering new sites subject to the moratorium as initial enrollments.

Exceptions include:

• Enrollment applications received by Medicare contractors prior to the publication date

• Changes in existing practice locations (provided the move is not into a moratorium area)

• Updates to provider/supplier information (e.g., address or phone)

• Certain changes in ownership (excluding those requiring initial home health agency enrollment)

A critical consideration: Non-exempt changes in majority ownership within 36 months of initial enrollment (or prior change) necessitate a new enrollment under 42 CFR 424.551, subjecting the entity to the moratorium.

CMS will conduct rigorous screening, including site visits and online verification, to prevent circumvention. Submission of false information risks denial, a reapplication bar of up to 10 years (42 CFR 424.530(a)(4) and (f)), revocation (42 CFR 424.535(a)), and referral to the OIG. Judicial review of the moratorium decision is unavailable under section 1866(j)(7)(B); denials may be appealed solely on applicability through 42 CFR Part 498, with application fees refunded.

For Medicaid and CHIP, CMS has not imposed a uniform moratorium but encourages states to consider aligned measures unless beneficiary access is adversely affected. States retain discretion and may consult CMS.

Strategic Considerations for DMEPOS Providers

This moratorium carries significant operational and transactional implications. Mergers and acquisitions warrant caution: Ownership changes within 36 months will trigger re-enrollment, potentially delaying market entry. Providers should model transactions to align outside this window or explore structures minimizing CMS scrutiny.

Supplier reclassification offers a pathway: Entities primarily engaged in pharmacy dispensing or other functions may qualify under alternative types, preserving expansion options. Approximately 30% of U.S. retail pharmacies are independent, providing a model for eligible pivots.

Post-moratorium, affected suppliers face "high" categorical screening for six months (42 CFR 424.518(c)(3)(iii) and 455.450(e)(2)), demanding impeccable applications. States adopting Medicaid parallels could impact dual-eligible services, necessitating coordinated advocacy.

CMS emphasizes beneficiary access through the existing supplier base, but localized shortages may prompt early lifts under criteria such as disaster declarations or implemented safeguards (42 CFR 424.570(d)). Providers should monitor for extensions, as CMS evaluates at each six-month interval.

Key Actionable Implications

• Immediate Enrollment Review

  Verify if applications predate publication; prepare appeals citing exemptions where applicable.

• Classification Assessment

  Conduct thorough audits to confirm non-applicability or viable alternatives like pharmacy enrollment.

• Ownership Due Diligence

  Time changes in majority ownership to avoid moratorium overlap; document straw ownership risks.

• Medicaid Coordination

  Engage state agencies proactively to influence or adapt to parallel restrictions.

• Compliance Enhancement

  Prioritize documentation for Master List items (e.g., braces, catheters) to mitigate heightened audit risks.

• Operational Optimization

  Leverage current enrollment for growth in permitted areas; maintain accreditation and surety bonds.

• Forward Monitoring

  :Track OIG data releases and CMS notices for extension signals or lifts.

How MDRXLaw Can Assist

MDRXLaw, a leading boutique firm in healthcare and pharmacy law, provides executive-level guidance tailored to DMEPOS challenges. Our practice encompasses pharmacy regulatory compliance, enrollment application reviews, denial appeals, PBM audit defenses, and healthcare transactions. We assist in supplier enrollments, CHOW, and compliance audits to navigate this moratorium effectively. Contact our team at (212) 668-0200 or info@mdrxlaw.com for a confidential assessment: mdrxlaw.com.