HHS Delegates Exclusion Authority to CMS
The Centers for Medicare and Medicaid Services now has the power to exclude providers for fraud and other violations.
Updated on Oct. 15, 2026 in Healthcare
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Should federal health agencies have increased authority to exclude medical providers from government healthcare programs?
The Department of Health and Human Services has officially delegated permissive exclusion authority under the Social Security Act to the Centers for Medicare and Medicaid Services (CMS). This shift allows CMS to directly manage the exclusion of providers from Medicare and Medicaid programs.
Why it matters
By centralizing investigative and enforcement responsibilities within one division, the agency aims to streamline program integrity efforts and reduce redundancy. The change positions CMS to better develop the evidentiary basis for exclusion determinations.
The delegation of authority is governed by Section 1128(b) of the Social Security Act. This move grants CMS new powers to address healthcare fraud convictions, license revocations, excessive billing, and kickbacks.
The players
Department of Health and Human Services
This is the United States federal department tasked with protecting the health of all Americans and providing essential human services.
Centers for Medicare and Medicaid Services
This federal agency within the Department of Health and Human Services manages the Medicare program and works in partnership with state governments to administer Medicaid.
The details
The delegation was formalized through a notice in the Federal Register, allowing CMS to act on its own investigative findings regarding provider conduct. While CMS gains this enforcement power, the HHS inspector general retains their existing authority, and CMS must continue to follow all established HHS policies and guidelines.
Timeline
In 1988, HHS originally delegated exclusion authorities to the inspector general.
The new delegation to the CMS administrator took effect on October 14, 2026.
Market Landscape
This reorganization reflects a broader trend of consolidating enforcement power within specialized federal agencies to increase operational efficiency. It positions CMS to compete more effectively against bad actors in the healthcare market by eliminating previous administrative bottlenecks.
The change is designed to improve the integrity of Medicare and Medicaid by more efficiently identifying and removing non-compliant providers. Patients may see fewer fraudulent providers operating within these public health programs over the long term.
The takeaway
This policy change represents a significant administrative update intended to shorten the time between identifying healthcare fraud and taking enforcement action. The delegation ensures that CMS can act directly upon the evidence it develops during its own investigations.
Further reading
For more context on the federal oversight of medical services, visit the United States Healthcare section.
Live Poll
Should federal health agencies have increased authority to exclude medical providers from government healthcare programs?
