By Jody Godoy

May 13 (Reuters) - The Trump administration will temporarily block new home health and hospice providers on Wednesday from enrolling in Medicare, a senior administration official said, citing concerns about widespread fraud.

The nationwide moratorium is the latest move by Vice President ‌JD Vance's anti-fraud task force to crack down on healthcare scams, including those that affect Medicare, a U.S. government program providing health ‌insurance to elderly and disabled Americans.

The Trump administration has singled out some Democratic-led states, including California and Minnesota, as not doing enough to combat fraud. But it also ramped up oversight ​of hospices in Georgia and Ohio last year.

"Widespread fraud has gone on for far too long. But under the Vice President's task force we are finally putting a stop to the massive scale fraudsters ripping off the American people once and for all," a spokesperson for Vance said.

Vance's task force is expected to announce the change, which has not been previously reported, along with other policy shifts later on Wednesday.

The pause would give the Centers for Medicare & Medicaid Services, ‌the government agency that oversees federally funded health insurance ⁠programs, time to make a full accounting of hospice and home health expenditures under the Medicare program and create additional guidance, the official said.

One of the concerns behind the pause was the speed at which fraudulent home health and ⁠hospice businesses can be created, the official said.

DIFFERENT APPROACHES FROM INDUSTRY

In 2024, 1.8 million Medicare beneficiaries received hospice care at a cost of $28.3 billion, according to the Medicare Payment Advisory Commission. The same year, 2.7 million patients on Medicare received home healthcare at a cost of $16 billion, according to the agency which advises Congress on healthcare spending.

Vance's ​task ​force has recently taken action against hospice services, particularly in California, where the state ​auditor said in 2022 that lax oversight had enabled large-scale ‌fraud.

Industry groups had urged different approaches as the Trump administration weighed potential action.

The National Partnership for Healthcare and Hospice Innovation said in March it supported temporarily pausing hospice provider enrollments. The National Alliance for Care at Home warned against overly broad action that could deter doctors and patients from recommending or seeking care.

Major home health operators in the U.S. include BrightSpring Health Services, private equity-backed Matrix Medical Network, and UnitedHealth. Chemed Corporation subsidiary VITAS Healthcare is among the top hospice care providers.

BROADER CRACKDOWN

Tens of billions of dollars are estimated to be lost in the United States through healthcare fraud each year, ‌translating into higher costs for patients and employers, according to the National Health Care ​Anti-Fraud Association.

The administration of U.S. President Donald Trump has also sought to tackle other healthcare ​sectors it has deemed a fraud risk. The administration in February ​paused Medicare enrollments by suppliers of durable medical equipment, such as prostheses.

The fraud crackdown started in Minnesota, where the Trump ‌administration said in February it would withhold $259 million in Medicaid ​funds.

Trump has repeatedly invoked a scandal ​in Minnesota that dates back to 2020, in which 47 people were accused of defrauding $250 million from a state-run, federally funded child nutrition program. Many of the defendants in that case were Somali Americans, according to local news reports.

The controversy prompted Trump earlier this year to send ​in thousands of federal immigration officers as part of ‌a migrant crackdown. He shifted tactics to a less aggressive approach after federal officers shot dead two people protesting his policies.

In ​announcing the fraud task force in March, Trump said, without providing evidence, that fraud allegations were higher in Democratic-led states than ​in Republican-led states.

(Reporting by Jody Godoy in New York, Editing by Rosalba O'Brien)