CMS now has the power to exclude providers from Medicare and Medicaid. Here is what that means for home health and hospice

In a one-page notice published Oct. 14, 2026, HHS Secretary Robert F. Kennedy Jr. delegated to the CMS administrator the authority to exclude individuals and entities from federal health care programs under section 1128(b) of the Social Security Act, effective immediately (Federal Register, 91 FR 65219). CMS asked for the power. The notice says CMS is "uniquely positioned" to build the evidence behind exclusions.

Key facts - What moved: section 1128(b) permissive exclusion authority, from the Secretary to the CMS administrator - When: published Oct. 14, 2026; effective immediately - Not delegated to CMS: mandatory exclusions, hearings, rulemaking - OIG keeps its own exclusion authority - Still open: how cases are split and how CMS exclusions will be made public - OIG excluded 2,837 individuals and entities in FY 2025

What exactly changed?

Until now, HHS's Office of Inspector General held the Secretary's exclusion authority, under a 1988 delegation. The new notice says that delegation is not affected, so OIG and CMS now share the permissive power. CMS cannot hold hearings or write regulations under it, and the Secretary keeps rulemaking. OIG's exclusions FAQ, updated Oct. 27, says OIG alone will continue to impose mandatory exclusions, the ones triggered by convictions for program fraud, patient abuse or neglect, health care felonies and controlled-substance felonies.

What can CMS exclude for?

The discretionary grounds in section 1128(b). Several bear directly on home health and hospice:

• (b)(6)(B): furnishing services "substantially in excess of the needs" of patients, or below professionally recognized standards
• (b)(7): fraud, kickbacks and other conduct under sections 1128A, 1128B or 1129
• (b)(8) and (b)(15): entities controlled by sanctioned owners or managers, and individuals who own or run a sanctioned entity
• (b)(16): knowingly false statements or omissions in an application to enroll as a provider

Some of these do not require a criminal conviction.

What does OIG still handle?

OIG says it will resolve permissive exclusion for HHS in False Claims Act settlements, so providers settling with the Justice Department do not need to negotiate separately with CMS. OIG said it has "no additional information to share regarding case allocation" and pointed questions about CMS's plans to CMS.

Will CMS exclusions show up on the LEIE?

Not settled. OIG's FAQ says it is "coordinating with CMS to make all exclusions public" and that implementation details are still being developed. That matters for any agency that screens staff and contractors against OIG's List of Excluded Individuals/Entities. We found no CMS guidance, procedures or list as of Oct. 29.

What happens to patients already on service?

The statute already answers part of this. Unless HHS finds that health and safety require otherwise, an exclusion does not cut off payment for home health or hospice care under a plan of care set before the exclusion until 30 days after it takes effect (section 1128(c)(2)(B)). For exclusions based on fraud or kickbacks under (b)(7), the law generally gives the provider a hearing before an administrative law judge before the exclusion starts.

How big is exclusion today?

OIG excluded 2,837 individuals and entities in fiscal 2025, according to the HCFAC fact sheet OIG posted Oct. 28. A Sidley Austin client alert notes Kennedy first said in July that CMS would get the power, and that CMS "has not yet indicated its approach." The change lands in the same fall that CMS is deciding whether to extend its home health and hospice enrollment moratoria. We will update this story when CMS publishes how it will use the authority.

Sources

• Federal Register, Statement of Delegation of Authority, Oct. 14, 2026
• HHS-OIG, Exclusions FAQs (updated Oct. 27, 2026)
• Social Security Act section 1128
• HHS-OIG, FY 2025 HCFAC fact sheet, Oct. 28, 2026
• Sidley Austin, Oct. 19, 2026

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This item has not been clinically reviewed. It is general information, not clinical, billing or legal advice.

Drafted with AI assistance from primary sources. Written and edited by the Home Health Brief newsroom under Monsaur Othman's editorial standards. Read how we use AI, our editorial policy and our corrections policy.

Informational only, not billing, legal or clinical advice. Check the linked primary source and your Medicare Administrative Contractor.