CMS Gains Exclusion Authority: What Healthcare Providers Should Be Watching

A recent announcement from U.S. Department of Health and Human Services (HHS) Secretary Robert F. Kennedy Jr. signals the possibility of a significant shift in federal healthcare program enforcement. While much of the attention has focused on the Trump Administration's efforts to address Medicaid fraud, a potentially more consequential development is the decision to allow the Centers for Medicare & Medicaid Services (CMS) to exercise exclusion authority alongside the HHS Office of Inspector General (OIG).

Historically, the OIG in conjunction with the U.S. Department of Justice has been responsible for excluding individuals and entities from participation in Medicare and Medicaid following certain fraud, abuse, patient safety or controlled substance-related violations. Exclusion can be one of the most severe enforcement actions available to the government, as it can effectively prevent providers from participating in federally funded healthcare programs individually and through future-formed corporate entities or employment opportunities.

Although details of the delegation have not yet been released publicly, healthcare industry observers expect the change could expand the government's enforcement capacity and increase the number of exclusion actions pursued. Questions remain regarding how CMS and OIG will divide responsibilities, whether CMS will focus on certain categories of cases and how this authority will interact with CMS' existing powers, including Medicare enrollment revocations.

For healthcare providers – particularly organizations with significant Medicare or Medicaid participation – the announcement serves as an important reminder to evaluate compliance programs, fraud and abuse controls, and risk assessment processes. Until additional guidance is issued, providers should monitor developments closely and prepare for the possibility of heightened enforcement activity.