AMARILLO, TX – In the past, health care providers primarily focused on two separate enforcement tracks. On the one hand, CMS controlled provider enrollment, billing privileges, and revocations. On the other hand, the Health and Human Services-Office of Inspector General (“HHS-OIG”) controlled exclusions from federal health care programs and other enforcement actions related to fraud, waste, and abuse. While both agencies played important roles in program integrity, there was a fairly clear division of authority.
That was then.
The enforcement landscape is changing rapidly. During a recent HHS press conference on combating fraud, HHS Secretary Robert F. Kennedy, Jr. announced that HHS was granting CMS the authority to utilize federal health care program exclusion powers that historically were exercised by the OIG. CMS Administrator Dr. Mehmet Oz indicated that CMS intends to use the authority carefully, while HHS officials described the development as a “force multiplier” in the government’s anti-fraud efforts.
While the current administration has taken aggressive enforcement action against home health agencies and DME suppliers, this action could affect any health care provider, including DME suppliers, pharmacies, physician practices, and other health care organizations. The announcement should not be viewed as merely an administrative change. For DME suppliers, the takeaway is simple: CMS is no longer limited to enrollment remedies. It now appears positioned to reach for one of the government’s most powerful enforcement tools.
Revocation Is Serious. Exclusion Can Be Significantly Worse.
While the supplier moratorium has been in effect, there has been a significant surge in PTAN revocations. As Secretary Kennedy indicated in the press conference, CMS is turning artificial intelligence platforms (“AI”) toward the task of auditing supplier claims and supporting documentation.
Most suppliers are familiar with Medicare revocations. If CMS revokes a DME supplier’s enrollment, the supplier loses Medicare billing privileges to the effective date of revocation and may face reenrollment bars, repayment demands, and other consequences. Revocation can be financially devastating, particularly when it causes a sudden interruption in cash flow.
However, AI can and does make mistakes. In many cases, a professionally crafted corrective action plan (or “CAP”) can result in reversal of a revocation decision.
Exclusion is different. The exclusion authorities under the Social Security Act can prohibit an individual or business entity from participating in federal health care programs, including Medicare and Medicaid. Historically, exclusion authority belonged to the OIG. Depending on the basis for exclusion, the sanction can be mandatory or discretionary. In certain circumstances, exclusions can effectively end a provider’s ability to participate in federally funded health care programs for years and, in some cases, permanently.
As Secretary Kennedy stated, the expanded authority will enable both CMS and OIG to remove bad actors from federal health care programs and, in some instances, permanently prevent their return. When individuals are excluded, this often effectively bars any gainful employment or contracting with any entity whose services are reimbursed by a federal health care program.
Why This Matters
DME suppliers need to understand that this development is occurring at the same time CMS is already taking a far more aggressive approach to enrollment enforcement. According to CMS officials, the agency revoked 1,413 providers and suppliers during the first quarter of 2026 alone, representing a 40% increase and the largest quarterly increase on record.
In other words, the agency that already controls enrollment and billing privileges may now be able to pursue exclusions as well.
From the government’s perspective, this makes sense. CMS often identifies problematic conduct before other agencies because it sits closest to provider enrollment, claims data, screening activities, and program integrity operations. Giving CMS direct exclusion authority may allow the government to move more quickly against entities it believes are engaging in fraud, waste, or abuse.
From the provider’s perspective, however, the stakes have increased.
Many Questions Remain Unanswered
At this point, HHS has released limited information regarding how CMS and the OIG will share responsibility for exclusion decisions. Although Secretary Kennedy has announced the decision, little clarity has followed. In particular, neither HHS nor CMS has clarified:
- How CMS will coordinate with the OIG.
- Whether CMS will adopt the OIG’s existing exclusion standards.
- Whether CMS will develop independent procedures.
- How False Claims Act settlements may be affected.
- Whether self-disclosure resolutions will require additional CMS involvement.
Indeed, although announced, this exclusionary authority has not yet been given a clear starting date. These questions are particularly important because exclusion issues frequently arise over the course of fraud investigations, self-disclosures, negotiations over Corporate Integrity Agreements, and False Claims Act settlements. Historically, providers often negotiated exclusion-related issues with the OIG. The addition of CMS to the equation could significantly complicate future resolutions.
What DME Suppliers Should Do Now
The practical reality is that DME suppliers cannot wait for further guidance before taking protective action.
Suppliers should assume that CMS will continue expanding its program integrity activities and will actively use every enforcement tool available. Whether exclusion authority is used sparingly or aggressively, organizations should be ready.
To strengthen its compliance program, a prudent supplier should consider:
- Conducting enrollment audits to ensure all PECOS information is accurate.
- Reviewing ownership and control disclosures in PECOS.
- Validating state licensure and accreditation requirements.
- Strengthening exclusion-screening processes.
- Investigating billing anomalies before regulators identify them.
- Promptly addressing overpayments and compliance concerns.
- Ensuring that compliance officers have meaningful authority and resources.
Most importantly, DME suppliers should not view exclusion risk as something that only affects organizations accused of outright fraud. Many significant enforcement actions begin with what appears to be a routine enrollment issue, documentation deficiency, licensing problem, or billing irregularity.
The Bottom Line
The recent HHS announcement may ultimately prove to be one of the most consequential health care enforcement developments of 2026.
Historically, exclusion was primarily the domain of the OIG. Going forward, CMS appears poised to play a direct role in determining which providers and suppliers can participate in federal health care programs.
Whether CMS uses this authority aggressively remains to be seen. What is clear is that federal regulators are sending a message: enforcement efforts are accelerating, coordination among agencies is increasing, and the consequences of noncompliance are becoming more severe.
Jeffrey S. Baird, Esq. is Chairman of the Health Care Group at Brown & Fortunato, PC, a law firm based in Texas with a national healthcare practice. He represents pharmacies, infusion companies, HME companies, manufacturers, and other healthcare providers throughout the United States. Mr. Baird is Board Certified in Health Law by the Texas Board of Legal Specialization and can be reached at (806) 345-6320 or [email protected].
Blinn E. Combs, Esq. is a member of the Health Care Group at Brown & Fortunato, PC, a law firm with a national healthcare practice based in Texas. He represents pharmacies, infusion companies, HME companies, manufacturers, and other healthcare providers throughout the United States. Mr. Combs can be reached at (806) 345-6355 or [email protected]
AAHOMECARE’S EDUCATIONAL WEBINAR
Asset vs. Stock Purchase of a DME Supplier
Presented by: Jeffrey S. Baird, Esq., Brown & Fortunato & Blinn E. Combs, Esq., Brown & Fortunato
Tuesday, October 6, 2026
1:30-2:30 p.m. CENTRAL TIME
We have not entered the dystopian “Brave New World” described by Aldous Huxley…but artificial intelligence (“AI”) is certainly a game changer. At its core, AI is the ability of a digital algorithm (essentially, a computer) to mimic certain functions of human intelligence. AI is touching all aspects of the DME supplier’s operations, including (i) e-prescribing, (ii) patient adherence, (iii) inventory control and resupply management, (iv) billing and prior authorization management, and (v) implementation of predictive patient ordering models. AI is increasingly being used by governmental agencies to investigate fraud and abuse. Examples are (i) flagging high risk prescription activity, (ii) flagging improper reimbursement claims, and (iii) improved coverage and pricing transparency. As stated in its June 23, 2026 press release, the Department of Justice stated: “To enhance the deployment of advanced analytic to target health care fraud…the Fraud Division will be provided cloud computing space in the CMS Integrated Data Repository environment in which to deploy advanced data analytics algorithms and artificial tools.” This program will (i) discuss existing and proposed federal regulations of AI, (ii) discuss examples of state regulations of AI, (iii) how DME suppliers can use AI to streamline operations and promote efficiency, and (iv) legal pitfalls DME suppliers need to be aware of as they utilize AI.
Registration will soon be posted for Artificial Intelligence and the DME Supplier on Tuesday, October 6, 2026, 1:30-2:30 p.m. CT, with Jeffrey S. Baird, Esq. and Blinn E. Combs, Esq., of Brown & Fortunato.