The Service Line

Four weeks from today, the Medicare enrollment freeze on new hospices and home health agencies is scheduled to end, and the federal government has not said whether it will let that happen. The Centers for Medicare and Medicaid Services (CMS) imposed the six-month nationwide moratoria on May 13, 2026, blocking applications for initial Medicare enrollment and certain majority-ownership changes, and told stakeholders it would give at least 60 days’ notice before extending them. Counting back from the November 13 expiration puts that notice date around September 14. As of October 14 and 15, trade press reported that CMS still had not said what it plans to do, and we found no extension notice in the Federal Register. Meanwhile, attorneys tell Home Health Care News that Medicare Administrative Contractors are denying applications filed before the freeze began, regardless of submission date, leaving some sellers and de novo builders stuck. If CMS extends, expansion stays frozen into 2027; if it lets the freeze lapse, those delayed filings hit contractors all at once. Confidence: High on the dates and CMS’s notice commitment; Low on what CMS does next, since silence is not a decision and the agency can extend by Federal Register notice at any time. Sources: CMS moratorium announcement, The Future for Hospice, Home Health Providers Under CMS Moratoria, Home Health Care News, Hospice, Home Health Moratoria: What Might Come Next, Hospice News.

Reimbursement: the Medicare advisory commission is opening an audit of the home health payment model itself

On October 9, the Medicare Payment Advisory Commission (MedPAC) staff presented a workplan to assess whether the Patient-Driven Groupings Model (PDGM), the home health payment system in place since 2020, actually aligns pay with patient care costs. The staff will test whether high-profit and low-profit case-mix groups are unevenly distributed across providers (patient selection), whether coding changes reflect real patient complexity or documentation practices, and whether coding on assessment items that drive payment moved differently from items that do not. One commissioner, Kenny Kan, warned that providers may already be using artificial intelligence tools to raise coding intensity, and said many “are way ahead of health plans.” Results are not expected until fall 2027, but this lands on top of a CY2027 proposed rule that already includes a temporary 3.0 percent PDGM behavioral cut, so operators should expect the recoupment argument to get a fresh evidentiary base. The final CY2027 rule, which would take effect January 1, has not yet been published as of today. Confidence: High on the study’s scope as presented; Medium on its eventual effect on payment, since MedPAC recommendations are advisory to Congress. Sources: MedPAC workplan on the accuracy of the skilled nursing facility and home health payment systems, MedPAC, MedPAC Launches PDGM Study, Home Health Care News, CY2027 Home Health PPS proposed rule, Federal Register.

Enforcement: hospice lawyers say data-driven revocations are treating clean agencies as guilty until proven otherwise

Lawyers quoted by Hospice News this week describe a federal fraud screen that is hitting legitimate hospices: Medicare license revocations can carry a 10-year ban on re-enrollment, medical directors must be reported as managing employees, and an affiliation with a suspect company can itself be treated as a fraud risk. Edo Banach of Foley Hoag put it bluntly: providers “are not presumed to be innocent. They are presumed to be guilty through these revocations.” The pressure is documented in CMS’s own numbers: about 800 Los Angeles hospices and home health agencies had Medicare payments suspended, tied to $1.4 billion in Medicare spending last year, with $70 million in funds held so far, and CMS’s enhanced oversight with prepayment medical review, first applied to new hospices in Arizona, California, Nevada, and Texas, was extended to Georgia and Ohio in 2026. For operators outside the original hotspot states, the practical exposure is documentation and ownership-disclosure hygiene, not just billing. Confidence: High on the CMS figures and state list; Medium on the characterization of revocation practice, which is practitioner commentary rather than agency data. Sources: CMS moratorium announcement, Period of Enhanced Oversight for New Hospices fact sheet, CMS Medicare Learning Network, Legitimate Hospices ‘Presumed Guilty’ in AI Fraud Hunt, Hospice News.

Who’s Buying: Optum calls home health a growth line while the biggest deals are being structured around sellers staying in

UnitedHealth Group’s Optum said on its third-quarter call on October 13 that home health visits grew 10 percent over the past year, and executives described expanding post-acute risk management with a payer partner, “from an inpatient hospital stay all the way through skilled nursing facility and home health.” The context is a shrinking footprint: Optum Health revenue fell 10 percent to $22.9 billion as it shed value-based patients, even as its operating earnings rose to $735 million from $41 million a year earlier. On the deal side, Aveanna Healthcare closed its $175.5 million acquisition of Family First Homecare in June (27 locations across seven states) with a stated aim of making sellers equity owners in the combined operations, part of a broader shift toward franchise buybacks with minority stakes and sellers kept on as operating partners. Confidence: High on the UnitedHealth figures; Medium on the structure trend, which rests on trade reporting of individual deals. Sources: UnitedHealth Group third quarter 2026 earnings release, SEC Form 8-K, UnitedHealth Touts 10% Increase in Optum’s Home Health Visits, Home Health Care News, Home-Based Care Deals No Longer End at the Closing Table, Home Health Care News.

Clinical Policy: nothing new from CMS this week, but one standing flexibility matters during the freeze

The scan produced no new clinical-policy action specific to this vertical. The one standing item worth restating: CMS’s moratorium FAQ says already-enrolled hospices can keep using telehealth for recertification face-to-face encounters, and the FY2027 hospice final rule keeps that available through December 31, 2027. Existing providers are not affected by the freeze and CMS regulations allow no exceptions for individual providers. Confidence: Medium, the telehealth timeline is relayed by a vendor blog summarizing the CMS FAQ and final rule. Source: Hospice enrollment moratorium countdown, Hospice Engine (supplement), CMS hospice and home health moratorium FAQs.

The Operator Metric: 44 hospice deals projected for 2026, versus 25 in 2023, and compliance now outranks growth

The Braff Group projects 44 hospice transactions in 2026, about 30 of them platform or bolt-on acquisitions, up from just 25 in 2023, after a three-year slump. But the price of admission has changed: Les Levinson of Robinson & Cole says compliance is “becoming the singular most important criteria” for buyers, and Cory Mertz of Mertz Taggart says buyers in enhanced-oversight states apply much lower tolerance for billing errors and recommends a billing and compliance audit before a sale, with the key valuation test being how transferable and sustainable current earnings are. The number to track this week is not a multiple, none was published, but your own audit-readiness: any operator planning a sale in the moratorium window should treat a clean pre-sale compliance audit as the gating item. Confidence: Medium, the 44-deal figure is a Braff Group projection relayed by Hospice News, not a closed-deal count. Source: What Hospice Buyers Are Looking For in 2026, Hospice News.