July 22, 2026
By: Harry J. Nelson, Esq.
For much of my career as a healthcare lawyer, government enforcement at both the federal and state levels has moved through long, relatively stable stretches. Much of our work during those periods consists of helping healthcare providers understand the government’s priorities and perspective, adjust their compliance programs, and develop a reliable sense of how regulators are likely to respond.
Then, every once in a while, something changes. New agency leadership arrives. The media exposes a scandal. Legislators apply pressure, arguing that the existing approach is ineffective. The public loses confidence in the government’s ability to police its own programs. When that happens, the old assumptions about how agencies operate stop working. Healthcare providers have to recalibrate.
We are in one of those moments now with respect to Medicare and, to a lesser extent, Medicaid enforcement. Over roughly the past nine months, the federal government’s enforcement posture has undergone what feels like a tectonic shift. Beyond the volume of activity, there is an accumulation of enforcement tools being deployed at once: nationwide enrollment moratoria, large-scale payment suspensions and revocations, prepayment review, proposed retroactive recoupment, closer ownership and affiliation scrutiny, geographic risk profiling, and expanding use of predictive analytics and artificial intelligence across enormous federal datasets. These are not simply more prosecutions under familiar rules. They reflect a broader move toward identifying providers, networks, and business models as risky before (or soon after) the money moves.
Post-ACA Architecture Meets a New Political Moment
On one level, the government’s underlying perspective is not new. My career in healthcare law has included three decades of policymakers complaining that federal anti-fraud enforcement was too slow, fragmented, and reactive. The traditional “pay-and-chase” model allowed money to leave the government and then required investigators, auditors, and prosecutors to recover it later.
Fifteen years ago, the Affordable Care Act made program integrity a major priority. It strengthened provider screening, enrollment oversight, overpayment obligations, data sharing, and the government’s ability to prevent questionable actors from entering or remaining in Medicare. The government has now had years to accumulate data, connect claims to ownership and referral information, refine its analytics, and develop increasingly powerful administrative remedies. In that sense, the present crackdown is not an out-of-the-blue development. It is the mature form of an enforcement architecture built over the last decade and a half.
But, on another level, something has shifted. It is difficult not to notice how Minnesota’s highly publicized public-program fraud scandals offered a political template for aligning anti-fraud enforcement with a broader argument about ineffective governance. Minnesota is led by Governor Tim Walz, the 2024 Democratic vice-presidential nominee and a prominent political antagonist of the current administration. My sense is that federal officials recognized that aggressive intervention against fraud could serve two purposes at once: protecting federal programs while highlighting alleged failures by political opponents.
Once Minnesota became a national spectacle, California was an almost inevitable next target. It has enormous Medicare and Medicaid expenditures, a Democratic governor with a national profile, rapidly growing in-home services spending, and a genuine hospice fraud problem concentrated heavily in Southern California. The federal government’s July decision to defer more than $1 billion in Medicaid payments to California and Minnesota illustrates the dynamic. Federal officials describe the action as proactive fraud prevention. Governors Newsom and Walz describe it as politically motivated, and they aren’t wrong.
Both things can be true at the same time and part of the same story. Genuine fraud concerns can provide the factual basis for intervention while politically useful examples increase its urgency, visibility, and breadth. When enforcement policy and political strategy become mutually reinforcing, providers face a difficult environment. The pressure is not merely to identify actual wrongdoing. It is to demonstrate visible, immediate, and dramatic action.
Hospice Shows Both Sides of the Problem
The current hospice crisis is a good example. We have known for years that there were too many hospices in Southern California. Media investigations, state audits, and industry observers have repeatedly called attention to questionable clustering, identity theft, patient enrollment irregularities, kickbacks, shell companies, and billing for care that was never provided. California imposed its own moratorium on new hospice licenses and says it has revoked more than 280 hospice licenses while investigating hundreds of additional providers.
The federal response has now escalated dramatically. CMS imposed a six-month nationwide moratorium on new Medicare enrollments for hospices and home health agencies. It reported suspending payments to approximately 800 hospices and home health agencies suspected of fraud in Los Angeles alone. Separately, the Department of Justice’s June 2026 national healthcare fraud takedown charged 455 defendants in matters involving more than $6.5 billion in alleged false claims.
Some of the alleged conduct is grotesque. One Southern California case alleges that a hospice operator purchased information concerning recently deceased people, fabricated records, and billed Medicare for hospice services those individuals never received. Other cases involve non-terminal patients, stolen identities, kickbacks, phantom services, and medically unnecessary care.
No responsible provider should minimize this conduct. It exploits patients, steals from public programs, damages legitimate hospice care, and makes stronger enforcement inevitable.
But acknowledging real fraud does not require us to accept every enforcement response as appropriately tailored. In fact, my email inbox is full of honest providers who are the collateral damage: people doing their best to deliver bona fide hospice services in good faith and getting lumped in with bad actors. We are living through a wave in which legitimate operators are also being hit with payment freezes, revocations, enhanced review, and potentially retroactive clawbacks. Their misfortune is being in the wrong sector, in the wrong market, at the wrong moment. Although these providers are innocent, many may not survive the costs being imposed on them. The destruction of their businesses not only wreaks havoc on the people who work for them, but on the patient communities who depend on them.
What Providers Should Do Now
The first lesson of this moment is that compliance can no longer be organized only around individual claims. CMS is increasingly looking at the entire enterprise: enrollment records, ownership, management arrangements, affiliations, locations, referral relationships, marketers, vendors, billing patterns, and financial flows. Providers should begin by understanding their own data. What would CMS see as unusual? Rapid growth, concentrated referrals, distinctive coding patterns, high utilization, unusual patient geography, or a large number of related entities may all attract attention. An outlier may be entirely legitimate, but the organization should be able to explain it with contemporaneous evidence.
Enrollment information also needs to be treated as a continuing representation to the government, not an administrative form completed years ago. Ownership, control, managing employees, practice locations, banking information, licenses, and reportable changes must match the organization’s present reality.
Providers should scrutinize every participant in the revenue chain. Marketers, lead generators, telehealth prescribers, laboratories, pharmacies, DME suppliers, billing vendors, and management companies can create risk that ultimately lands on the enrolled provider.
Organizations also need an enforcement response plan. A payment suspension or revocation can
become existential within days. Leadership should know who will respond, where the relevant records are located, how the organization will explain its data, and what resources will preserve patient care and operations during an appeal.
Is This Permanent?
When I wrote From ObamaCare to TrumpCare: Why You Should Care, healthcare providers were anxious about whether a change in presidential administrations would fundamentally alter federal healthcare policy. The same question is looming now. Some features of the current crackdown are undoubtedly tied to political priorities. A future administration may communicate differently or exercise these authorities with more restraint.
But I do not think the system will return to what it was. Ultimately, healthcare fraud is a rare bipartisan issue. Every year, the government has better data, more powerful enrollment controls, stronger administrative remedies, and greater political incentive to prevent questionable payments before they occur. Once an agency acquires the ability to connect ownership, claims, affiliations, geography, and financial relationships — and to act on those connections — it rarely gives that ability back.
The political pendulum may move. The enforcement ratchet is likely to remain. Providers should respond without panic, but with an understanding of the moment. Honest providers need to consider the risks of how enforcement tools place them at risk without waiting for the government to become more discriminating in its targets. The challenge for providers is to understand and address the story that their data, enrollment records, contracts, and operations tell before the government tells it for them.
