The Trump administration announced a six-month moratorium on new Medicare enrollments for hospice and home health agencies while freezing billions of dollars in federal Medicaid payments to California to combat health care fraud.

On Wednesday, Centers for Medicare & Medicaid Services Administrator Dr. Mehmet Oz and Vice President JD Vance announced the moves during a White House news conference as part of a broader administration effort to root out waste, abuse and fraudulent health care billing practices, according to CBS News.

“There will be no new hospices or home health care open in this country,” Oz said. “If you have the program now, you can keep it. You can go to ones that already exist. We’re not taking away any services. But there will be no new ones, licenses granted, until we can figure out a better way of working across government.”

According to CMS, the moratorium will allow federal investigators to conduct targeted probes, perform advanced data analysis and accelerate the removal of providers suspected of fraudulent activity, per CBS News.

CBS News investigation uncovers potential hospice fraud in California

The administration cited growing evidence of abuse within the hospice industry, particularly in California.

A 2023 report from the U.S. Department of Health and Human Services Office of the Inspector General estimated that suspected hospice fraud nationwide totaled approximately $198.1 million.

A recent CBS News investigation showed potential fraudulent hospice activity in Los Angeles County. The probe found that more than 700 of the county’s roughly 1,800 hospice providers displayed multiple warning signs associated with fraud under state guidelines.

In response to the investigation, Oz announced in March a separate initiative to decertify hospice providers accused of defrauding taxpayers by using stolen patient identities or overbilling Medicare for hospice-related services.

“If they do not aggressively prosecute Medicaid fraud, we are going to turn off the money that goes to these anti-fraud units,” Vance said during Wednesday’s news conference.

Why did the administration freeze $1.3 billion in Medicaid payments to California?

Vance also stated that the administration would withhold $1.3 billion in federal Medicaid payments from California, arguing that the state has not done enough to address fraud within its public health insurance system.

“The state of California has not taken fraud very seriously,” Vance said, according to The New York Times.

Alongside the funding decision, Vance announced a nationwide review of state-level Medicaid fraud control units, watchdog agencies responsible for investigating misuse and improper spending within Medicaid programs.

The administration sent letters to these offices requesting proof that they are “aggressively” pursuing fraud investigations. Vance warned that states that fail to provide proof could lose funding.