CMS can now exclude providers from federal healthcare programs

The Centers for Medicare and Medicaid Services (CMS) can now exclude providers, suppliers, and other participants from federal programs like Medicaid.

Department of Health and Human Services (HHS) Secretary Robert F. Kennedy Jr. officially delegated the authority to CMS in an Oct. 14 notice, fulfilling a commitment he made during a press conference in July.

Previously, CMS could only revoke a person or group’s ability to bill Medicare. Now, CMS can also exclude them from other federal healthcare programs. Until now, the HHS Office of the Inspector General (OIG), an independent oversight agency, had been the only department with exclusion authority over every federal healthcare program.

Legal experts told Healthcare Brew there are questions about how this change will work. If the CMS administrator were to exercise this new power, it means stakes would be higher for providers and suppliers as the current administration ramps up its efforts to root out fraud and abuse. Rooting out fraud has been a priority for the Trump administration, though as Healthcare Brew has previously reported, experts say it’s not as widespread as the administration claims.

“The effect of exclusion means that you really can’t have a job at any kind of organization that bills federal healthcare programs. So it’s a much more serious and wide-reaching action than CMS revoking your Medicare [billing privileges],” Tony Maida, a partner at law firm McDermott Will & Schulte, told Healthcare Brew.

The details. Both Maida and George Breen, a member of the Epstein Becker and Green law firm, told Healthcare Brew that questions remain about if CMS and OIG will have different standards or appeals processes for exclusion. Breen recommends federal healthcare program participants ask CMS and OIG for clarity about this process.

“CMS, for all practical purposes, is a blank slate in the exclusion arena,” Breen said. “Right now, we don’t know what CMS would consider to be conduct which would justify exclusion, as compared to some lesser punishment.”

There are some criminal offenses that legally must always result in exclusion from federal healthcare programs, like patient abuse or neglect or a felony conviction for healthcare-related fraud. For other actions including engaging in kickbacks schemes and misdemeanor healthcare fraud convictions, exclusion is up to the OIG (and now CMS).

In 2025, CMS revoked 5,586 providers’ and suppliers’ billing privileges for “inappropriate behavior,” according to its Center for Program Integrity’s annual report. In the six months leading up to March 31, 2026, the OIG reports that it excluded 1,212 individuals and groups from federal healthcare programs.

An HHS spokesperson told Healthcare Brew that this new power makes CMS a “force multiplier for program integrity efforts.”

“This collaborative model means more eyes on the problem and faster response times, while preserving OIG’s independence as the dedicated watchdog,” the spokesperson said.

Now that CMS has this authority, providers and suppliers should take extra caution to ensure they’re compliant with CMS regulations, Maida said.

“It’s more important than ever to have a good, effective compliance program to make sure you have the support for the services that you’re providing,” Maida said.

Other efforts to reduce healthcare fraud include a plan announced by Vice President JD Vance and other officials in September to remove 760,000 Affordable Care Act enrollees for alleged improper enrollments. KFF Health News reported in October, however, that some people’s coverage should not have been canceled and was recently reinstated.

“Giving CMS this authority strengthens the agency’s ability to act directly when it identifies misconduct and helps streamline enforcement while preserving OIG’s independent authority,” a CMS spokesperson told Healthcare Brew via email.