Vice President and CMS Announce Suite of New Administrative Actions to Further Federal Anti-Fraud Health Care Initiatives  

Last week, the White House and CMS announced a set of new administrative actions to further the Administration’s anti-fraud mission, including in particular CMS’s CRUSH (Comprehensive Regulations to Uncover Suspicious Healthcare) initiative, announced earlier this year. At a May 13, 2026 press conference, Vice President J.D. Vance, CMS Administrator Dr. Mehmet Oz, and CMS Deputy Administrator and Chief Operating Officer Kim Brandt outlined measures designed not only to identify and prevent fraud, but also to pressure states and their Medicaid Fraud Control Units (“MFCUs”) to take a more active enforcement role.

Increased Pressure on States and MFCUs Through Medicaid Funding

Vance announced that the federal government is deferring (i.e., withholding) approximately $1.3 billion in Medicaid reimbursement funding from California. The deferral stems from the Administration’s view that California has failed to appropriately investigate and prosecute Medicaid fraud despite receiving substantial federal funding for its MFCU.

California was not the only state subject to criticism. Administration officials pointed to an alleged lack of Medicaid fraud indictments across several states. For example, Vance criticized New York and its MFCU for allegedly securing only nine Medicaid fraud indictments in the last year.

In light of this alleged failure by certain states to take fraud prevention seriously, the Administration announced that all 50 states will receive letters requiring them to demonstrate that they are “effectively and aggressively prosecuting Medicaid fraud.” Vance warned that states failing to satisfy federal expectations risk losing funding. On the heels of funding pauses in Minnesota and now California, the federal government is taking serious, concrete steps to push the various state MFCUs to more aggressively combat fraud—and to partner with the federal government.

Hospice and Home Health Suspensions and Enrollment Moratoria

CMS also announced several significant administrative actions targeting sectors the agency views as particularly vulnerable to fraud and abuse.

Most notably, CMS announced six-month, nationwide moratoria on new Medicare enrollment for hospices and home health agencies, in a move Dr. Oz described as “shutting the door on fraud – preventing new bad actors from entering Medicare while we aggressively identify, investigate, and remove those already exploiting them.” During the six-month window, CMS intends to conduct targeted investigations and remove hospice and home health agency providers suspected of committing fraud from the Medicare program. The moratoria aim to shift enforcement from a reactive “pay-and-chase approach” to prevention-based oversight, per a Federal Register notice. The agency also announced the suspension of approximately 800 hospice and home health entities the Administration deemed potentially fraudulent.

Providers should expect continued reliance on predictive analytics and enrollment-based interventions as CMS expands its anti-fraud efforts. In light of the serious challenges posed by payment or enrollment suspensions, entities in allegedly high risk areas should ensure they understand what signals their data is sending to increasingly engaged CMS regulators and analysts.

Continued Expansion of Cross-Functional “War Rooms” and Enforcement Teams

Finally, Administration officials emphasized the continued development of cross-functional enforcement teams designed to identify and stop fraudulent payments before they are made, including through the use of data analytics and forensic audits.

Brandt highlighted Medicaid “war rooms,” through which HHS-OIG, DOJ, CMS, state agencies, and MFCUs coordinate investigative efforts and leverage administrative authorities such as payment suspensions, overpayment demands, civil monetary penalties, and exclusion. Officials emphasized that these teams are intended to identify fraud earlier in the payment cycle and facilitate faster administrative and enforcement responses. Taken together with the message to MFCUs, it is likely these partnerships will expand.

This post is as of the posting date stated above. Sidley Austin LLP assumes no duty to update this post or post about any subsequent developments having a bearing on this post.