CMS’s New DMEPOS Enrollment Moratorium: What Suppliers Need to Know

On February 25, 2026, the Centers for Medicare & Medicaid Services (CMS) announced, among other actions, a six-month nationwide moratorium on Medicare enrollment for certain Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) suppliers (Moratorium). The Moratorium will take effect upon formal publication in the Federal Register, currently scheduled for February 27, 2026.

Enrollment Moratorium

CMS’s display copy notice invokes its statutory authority under section 1866(j)(7) of the Social Security Act and its existing federal regulatory authority at 42 C.F.R. § 424.570 to impose a temporary moratorium on Medicare enrollment of certain DMEPOS suppliers nationwide. 

The Moratorium will:

• Last six months from the date of Federal Register publication.
• Apply to initial enrollment applications for certain medical supply company categories identified by CMS.
• Subject moratorium-blocked applicants to heightened screening levels if they reapply within six months after the Moratorium is lifted.

The Moratorium applies to the following DMEPOS supplier types:

• 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

For purposes of the Moratorium, a “medical supply company” is defined as a business whose principal function is to furnish DMEPOS supplies (regardless of supply type) directly to another party, such as to (1) to beneficiaries with a medical order (e.g., via mail order), (2) medical providers and suppliers, or (3) both. CMS clarified that providers and suppliers whose principal function is not the provision of DMEPOS supplies (e.g., grocery stores, pharmacies, hospitals, or medical practices) will not be considered a medical supply company for the purposes of the Moratorium.

CMS also clarified that the Moratorium does not apply to Medicaid and Children’s Health Insurance Program (CHIP) programs, and that each state can decide whether a similar moratorium is appropriate for their respective Medicaid and CHIP programs in their respective jurisdictions.

Conflicting Guidance from CMS

The regulatory authority relied upon by CMS, 42 C.F.R. § 424.570, expressly states that a temporary moratorium does not apply to changes in ownership. Specifically, § 424.570(a)(1)(iii) states that a moratorium does not apply to: (1) changes in practice location; (2) changes in provider or supplier information; or (3) changes in ownership, unless the change independently triggers a requirement for a new Medicare enrollment application. 

Prior to the Moratorium, effective January 1, 2026, CMS implemented a 36-month change in majority ownership rule applicable to DMEPOS suppliers at 42 C.F.R. § 424.551. Under § 424.551, a change in majority ownership requires submission of a new Medicare enrollment application only if it occurs within 36 months of the supplier’s initial enrollment or its most recent change in majority ownership.

CMS’s press release states that the Moratorium “applies to all applications for initial enrollment and changes in majority ownership for medical supply companies.” This language appears broader than the regulatory text. However, CMS correctly describes the scope of the Moratorium with respect to changes of ownership in its DME Nationwide Moratorium Q&As. The Q&As clarify that the Moratorium can only apply if the 36-month rule is triggered by a majority change in ownership, requiring a new Medicare enrollment application. If a majority change in ownership occurs without implicating the 36-month rule (i.e., more than 36 months after initial enrollment or the last change of majority ownership), then the change of ownership should proceed in the normal course and would not be subject to the Moratorium. 

Why This Matters

The Moratorium has immediate operational and transactional implications for DMEPOS suppliers. CMS’s Q&As explain the Moratorium will not apply to enrollment applications “received by Medicare prior to the date the moratorium is imposed.”

This creates a potentially narrow but meaningful window to submit initial enrollment applications before the Federal Register publication date, anticipated February 27, 2026. Suppliers contemplating new DMEPOS enrollments or transaction structures requiring a new enrollment application should evaluate whether filing immediately is feasible.

The interaction between the Moratorium and the 36-month majority ownership rule makes transaction timing critical. Buyers and sellers must assess whether a contemplated majority change of ownership will trigger the 36-month rule and therefore require submission of a new Medicare enrollment application. If so, and if the application is filed after the Moratorium’s effective date, CMS will not process it during the six-month period. This could delay closings, affect valuation, alter financing assumptions, or necessitate alternative structuring.

The Moratorium also has potential implications for suppliers preparing to participate in the upcoming national DMEPOS competitive bidding remote item delivery (RID) round. Suppliers seeking to submit bids must ensure they are properly enrolled and able to furnish items throughout the entire competitive bidding area (CBA). In a nationwide round, that effectively means the ability to serve beneficiaries across the country. Certain state licensure regimes require in-state physical locations. Establishing those locations necessitates separate practice locations and, therefore, separate Medicare enrollments. Those new enrollments would be subject to the Moratorium, and suppliers may be unable to complete necessary enrollment expansions before bid submission or contract implementation. 

CMS’s Q&A suggests the Moratorium will be implemented for six months, with the option to extend it for additional six-month periods if necessary. This creates strategic and compliance risk for suppliers planning national coverage models.

If you have any questions regarding how the Moratorium may impact your organization or planned transaction, please contact the authors, your Foley relationship partner, or to our Health Care Practice Group and Health Care & Life Sciences Sector.