CMS Proposed New Fraud Prevention Model
The federal agency aims to shift toward proactive oversight of Medicare claims and provider investigations.
Updated on Oct. 7, 2026 in Healthcare
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The Centers for Medicare and Medicaid Services has published a draft operating model on SAM.gov to overhaul how it handles fraud prevention. The agency seeks to transition from chasing money after it is paid to stopping fraudulent payments before they occur.
Why it matters
By taking a more direct role in the prioritization and direction of investigations, CMS intends to modernize its defense against healthcare fraud. This shift aims to strengthen agency oversight of the private contractors currently responsible for reviewing claims.
Since March 2025, the Fraud Defense Operations Center has blocked nearly $2.5 billion in Medicare payments and taken action on approximately 800 providers. The current proposal remains open for feedback until the November 4 deadline.
The players
Centers for Medicare and Medicaid Services
This federal agency within the United States Department of Health and Human Services administers the Medicare program and works in partnership with state governments to administer Medicaid.
Mehmet Oz
He serves as the Administrator of the Centers for Medicare and Medicaid Services and oversees the agency's strategic priorities for healthcare program integrity.
The details
Under the proposed framework, CMS would take greater control over how private contractors conduct provider interviews and coordinate with stakeholders. Administrator Mehmet Oz is also pushing for improved data-sharing protocols with state medical boards to better identify fraudulent activity.
Timeline
The Fraud Defense Operations Center was established in March 2025.
Administrator Mehmet Oz addressed data sharing in a video on October 5, 2026.
The agency published the request for information on SAM.gov on October 7, 2026.
The submission period for the request for information ends November 4, 2026, at 11 a.m. ET.
Market Landscape
This proposal signals a move toward tighter federal control over the third-party investigative industry, challenging the autonomy currently held by private contractors. It positions the agency to prioritize proactive risk mitigation as the primary standard for Medicare fiscal integrity.
The transition to proactive fraud detection is intended to safeguard Medicare resources, which may eventually lead to more stable funding for federal health programs. Patients and providers should watch for potential changes to claim review processes and documentation requirements.
The takeaway
The government is moving to reclaim primary oversight of healthcare fraud investigations to prevent financial losses before they occur. This shift suggests that private firms will face stricter management and more rigorous performance standards in the future.
What happens next
The request for information submission period will conclude on November 4, 2026, at 11 a.m. ET, after which the agency is expected to review feedback for the development of the new operating model.
Further reading
For additional context on regulatory changes in the sector, visit the Healthcare section.
More information
Review the full draft proposal on the SAM.gov federal contracting portal.
Source note: This article includes information reported by Nextgov.
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