Understanding the National Hospice Moratorium

Have you heard about hospice fraud in the news lately? As federal task forces clamp down on nationwide hospice fraud, Livingston’s ethical treatment practices allow us to maintain our gold standard of ethical, mission-driven care with minimal impact. Learn more about the recent hospice moratorium and how it impacts Livingston below.

 

What You Need to Know

 

On May 13, 2026, the Centers for Medicare & Medicaid Services (CMS) enacted a six-month nationwide moratorium halting all new Medicare enrollments for hospice and home health agencies. A “moratorium” simply means a temporary pause. In this case, CMS has temporarily paused the enrollment of new hospice providers into Medicare for a six-month period while federal officials continue to investigate and remove unethical providers. This moratorium largely does not impact established, mission-driven hospice organizations like Livingston who are already providing ethical care.

While a blanket freeze across all 50 states is an aggressive regulatory tool, federal officials have emphasized that it is a temporary, data-driven response to systemic vulnerabilities. By pausing the front-end enrollment process, CMS can prevent organized fraud rings from immediately opening new fraudulent hospices in a new location. In other words, CMS is temporarily turning off the water to better fix the leaky pipes.

 

The Roots of the Crisis: How We Got Here

 

To understand how the industry reached this point, it helps to look at the history of the Medicare hospice benefit.

When Congress first established hospice as a Medicare-approved benefit in 1982, it was designed around a community-based, non-profit model. It relied on deeply integrated local clinicians to provide holistic, end-of-life care.

In 2016, CMS implemented structural changes to the hospice payment system, shifting from a flat daily rate to a tiered reimbursement model (paying higher rates for the first 60 days of care). While this change was intended to better align payments with early administrative costs, they coincided with broader federal deregulation efforts of 2017-2020 that dramatically simplified the process for opening new agencies.

This unintended loophole allowed thousands of commercial, for-profit entities to rapidly enter the market. Without the deep community roots or capital investments of traditional providers, unscrupulous providers began creating shell companies. Often existing entirely on paper, these shell companies focused on maximizing short-term Medicare billings through unethical means. These shell companies targeted the Sun Belt – primarily California, Texas, Arizona, and Nevada – because of their rapid population growth, high concentrations of Medicare-eligible seniors, and historical regulatory gaps in state licensing laws.

Across the country, illegitimate paper-only agencies cropped up in clusters, often sharing a single empty office space with no actual clinical staff. Unscrupulous providers attempt to exploit vulnerable seniors through unsolicited marketing or identity theft.

In 2021-2022, state and federal administrations became acutely aware of the regulatory loophole and the sudden explosion of hospice fraud. Investigative journalists and healthcare advocates began sounding the alarm in 2021 on the explosion of licensed hospices. In March 2022, the California State Auditor released a landmark, comprehensive investigation that exposed the shell company loophole. In direct response to that March 2022 audit, California passed emergency legislation putting a state-level moratorium on new hospice licenses.

Unfortunately, the California moratorium wasn’t enough to protect our population; as soon as local unethical hospices shut down, new ones popped up across state lines. Ultimately, CMS determined that a national moratorium was merited. While the crackdown is dominating headlines now, this moratorium is in fact a continuation of both state and federal responses begun in 2022.

 

Impacts on Livingston

 

Ventura County’s healthcare landscape relies heavily on deeply rooted, visible, and physically active providers who deliver legitimate, face-to-face patient care. As unethical operators are rooted out of our county by federal investigators, some non-Livingston patients are being left adrift. This includes vulnerable seniors who were misled to believe hospice was their appropriate level of care, as well as others who legitimately and urgently require end-of-life care but have nowhere to turn.

Livingston’s clinical teams are working diligently to carefully navigate these complex needs in our community, ensuring that no local family falls through the cracks.

We fully support these rigorous federal oversight measures to root out hospice fraud, both nationwide and in our community. Cleaning up the industry not only protects vulnerable patients from exploitation, but it honors the clinical integrity of the dedicated professionals who provide legitimate, compassionate care every day. At Livingston, our compliance metrics remain exemplary. For us, safeguarding the hospice benefit is far more than a legal obligation: it is a fundamental part of the sacred promise we have made to Ventura County families for decades.