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New Medicare enrollment rules could put compliant hospitals at risk

Enrollment changes buried in the 2027 home health proposed rule would apply to every Medicare provider and broaden CMS’s power to deny or revoke billing privileges, prompting hospitals and 18 other groups to push back.

3 min read
New Medicare enrollment rules could put compliant hospitals at risk

Executive takeaway

Boards should treat Medicare enrollment as an enterprise risk: confirm who owns enrollment data, how affiliations and managing employees are tracked, and how fast errors are fixed.

Article

What CMS proposed

The calendar year 2027 home health payment rule, published July 6, includes Medicare enrollment provisions that would reach far beyond home health agencies. They would expand the grounds on which CMS can deny or revoke enrollment, report sanctions and enforce rules across all providers and suppliers. The changes include new definitions of affiliates and managing employees, which would widen the circle of people and organizations whose conduct could count against an enrolled provider.

Why hospitals are worried

On Aug. 31, a coalition of 19 organizations led by LeadingAge, including the American Hospital Association, the Federation of American Hospitals and the Catholic Health Association, filed comments asking CMS to rethink the approach. The groups said they support fighting fraud but warned that the proposals blur the line between deliberate misconduct and honest mistakes.

Their concerns include:

  • Sanctions triggered by technical or documentation errors, or by conflicting guidance from CMS and its contractors.
  • Liability for the conduct of third parties a provider cannot control.
  • Denials tied to Medicare debt, payment suspensions or terminations without any materiality threshold.
  • Retroactive revocation and bars on reapplying, often without a chance to fix the problem first.
  • A problem with one enrollment spreading to a provider’s other enrollments or to other federal programs.

In separate comments filed Aug. 28, the AHA said the changes would add significant reporting burden and could jeopardize the enrollment status of compliant providers.

What the coalition wants

The groups asked CMS to move the enrollment changes into a standalone rule, as it has done since 2003. They want materiality and intent standards, a due diligence safe harbor for third-party relationships, a narrow definition of managing employee, retention of the current five-year lookback for affiliation disclosures, and a right to correct errors before losing billing privileges.

Questions for the board and compliance committee

  • Ownership. Who maintains enrollment records for every hospital, clinic and group practice in the system?
  • Affiliations. Can we produce a current list of owners, managing employees and affiliated entities on short notice?
  • Vendors. Do contracts with billing companies and staffing firms include screening and notice obligations?
  • Response time. How quickly can we correct an enrollment error once it is found?

Archive entry for Sep 4, 2026, added Nov. 11, 2026.

Sources

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