CMS is proposing new authority to deny or revoke Medicare enrollment for physicians, ASCs and other providers and suppliers, including grounds tied to provider density in a given market, certain misdemeanor convictions and retroactive payment recoupment.
The proposal is tucked inside the CY 2027 Home Health Prospective Payment System proposed rule, issued July 1, but its program integrity provisions would apply across every Medicare provider and supplier type, not just home health agencies.
For ASC and physician practice leaders, the most consequential piece is a new ground for denial or revocation: enrollment that presents a high risk of fraud, waste and abuse because a provider or supplier operates in a limited geographic area with an excessive concentration of other providers or suppliers. As written, the standard is tied to market density rather than an individual practice’s billing or compliance record, meaning a well-run ASC in a specialty-heavy market could face added scrutiny for reasons unrelated to its own conduct.
The agency also wants authority to deny or revoke enrollment for providers or suppliers convicted within the past 10 years of misdemeanors related to sexual assault or financial misconduct, expanding a revocation trigger that has historically focused on felony convictions.
The proposal would make enrollment revocations retroactive to the date a provider first fell out of compliance, rather than the date CMS issues a revocation notice. That would let the agency recoup payments a provider already received and kept in good faith while enrolled, well before any notice of a problem arrived.
CMS Administrator Mehmet Oz, MD, said in a news release announcing the proposed rule that the changes would give the agency “stronger tools to protect Medicare beneficiaries and taxpayer dollars from fraud, waste and abuse.”
The 269-page proposed rule is open for public comment. It also carries a $420 million, or 2.4%, payment increase for home health agencies in 2027 — the vehicle CMS chose to attach the enrollment changes to.
The proposal lands amid a broader run of Medicare fraud enforcement this year. CMS in February halted new enrollment for certain durable medical equipment suppliers and said it had suspended $5.7 billion in suspected fraudulent Medicare payments. The Department of Justice’s 2026 National Health Care Fraud Takedown last month charged 90 physicians and other licensed medical professionals among 455 defendants, and resulted in the suspension of 1,079 providers and revocation of billing privileges for 1,403 providers. Taken together, the moves signal that provider-level enrollment scrutiny — not just claims-level audits — is becoming a bigger part of how CMS polices the program.
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