New York Freezes Medicaid Enrollment

New York State Medicaid Director Amir Bassiri announced on July 30, 2026, a six-month moratorium on new Medicaid provider enrollments for six "high-risk" provider categories: laboratories, durable medical equipment (DME) suppliers, applied behavioral analysts, licensed home care service agencies (LHCSAs), pharmacies and managed long-term care plans. This announcement follows a similar move by the Centers for Medicare & Medicaid Services (CMS), which in May 2026 imposed nationwide Medicare enrollment moratoria for home health agencies and hospices, in addition to existing moratoria on laboratories and DME suppliers.

Though the state moratorium is expected to be temporary (according to Crain's Health Pulse) – intended to give the state time to implement its new revalidation process for enrolled providers, expected to be completed this fall – New York has a history of extending both formal and informal pauses on a variety of provider applications, including LHCSAs (2018, formally ended in 2020, but effectively not until 2022) and hospice providers (more than 15 years, primarily because of public need formulas that have never been updated). By altogether pausing enrollment and related change in ownership applications, New York will have time to complete the revalidation of current Medicaid enrollees.

The impact of the moratorium on pending and future transactions involving affected provider types remains uncertain. Unlike CMS, which issued guidance clarifying that its Medicare enrollment moratoria do not bar change of ownership transactions where the enrolled provider remains the same, Director Bassiri has not yet indicated how his office will treat such transactions during the moratorium period. Generally, in a stock acquisition, the enrolled provider entity remains unchanged, and New York requires only notification of new ownership – this would not appear to constitute a "new" enrollment application subject to the moratorium. Similarly, asset acquisitions in which the buyer is an existing licensed provider already enrolled in Medicaid should not trigger a new enrollment. Asset transactions, however, may be more directly affected when the acquiring entity does not hold an existing Medicaid enrollment, as the buyer would need to submit a new application.

Stakeholders currently negotiating or planning transactions involving the affected provider categories should carefully evaluate how the moratorium may affect timing, structure and closing conditions. Holland & Knight will continue to monitor additional guidance from the New York State Department of Health.