The Trump administration on Wednesday announced a nationwide moratorium on new suppliers of certain medical devices, citing the need to address “fraud, waste and abuse” in the industry that provides wheelchairs, prosthetic limbs and other equipment.
“The amount of fraud is so vast that it’s easier to open one of these providers than it is to open a bank account,” Mehmet Oz, administrator of the Centers for Medicare and Medicaid Services, said at a press conference with Secretary of Health Robert F. Kennedy Jr. and Vice President J.D. Vance about tackling health care fraud.
The moratorium will not stop the flow of medical equipment, but it will impact an overlooked but important area of health care for the elderly and people with disabilities. Equipment and equipment includes gauze, oxygen tanks, urinary catheters, breast implants, and more for post-mastectomy patients.
The decision to enact the moratorium was made after an analysis of current and historical Medicare enrollment and claims data, according to a Federal Register notice. The affected companies (suppliers of durable medical equipment, prosthetics, orthotics and consumables) account for only a small portion of the agency’s $1.7 trillion budget, but the industry has recurring problems with fraud. Previous federal investigations have found that Medicare improperly paid suppliers $34 million from 2015 to 2017 and $22.7 million from 2018 to 2024.
CMS has issued moratoriums in the past to address misconduct by home health agencies and ambulance providers. The suspension lasts six months, but federal law allows for an additional six-month extension. Oz did not specify specific goals that CMS hopes to achieve by the end of the moratorium.
“We appreciate the CMS Administrator’s demonstrated commitment to stopping criminals from enrolling in the DMEPOS program,” said Josh Markus, CEO of Medical Services Company and Chairman of the Board of AAHomecare, which represents providers and manufacturers of home medical equipment and services. “We want to work with CMS to strengthen enrollment practices without harming patients and communities by mandating a complete suspension of new enrollments for existing providers.”
Federal health department leaders also announced the upcoming CMS tip line for reporting fraud and a “pause” of $259.5 million in Medicaid funding to Minnesota.
