CMS Proposed New Fraud Prevention Contracting Model
Healthcare providers should prepare for stricter claims oversight as the agency shifts toward proactive fraud detection.
Updated on Oct. 7, 2026 in Healthcare
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Should federal agencies take a more direct role in managing private fraud investigation contracts?
The Centers for Medicare and Medicaid Services (CMS) has published a draft operating model for fraud prevention on SAM.gov, detailing a strategy to increase agency oversight of contractor investigations. The new framework aims to transition from recovery-based efforts to preventing fraudulent payments before they occur.
Why it matters
The agency seeks to curb financial losses by taking a greater role in the prioritization and direction of investigations, shifting the compliance landscape for providers. This move aims to pivot the agency's fraud strategy away from chasing money after it has been paid out.
The Fraud Defense Operations Center has blocked nearly $2.5 billion in Medicare payments and taken action on nearly 800 providers since its launch in March 2025. The agency is currently soliciting industry feedback on the proposed contracting model through November 4, 2026.
The players
Centers for Medicare and Medicaid Services
The federal agency responsible for administering Medicare and Medicaid and enforcing regulatory standards for healthcare providers.
Mehmet Oz
The current Administrator of the Centers for Medicare and Medicaid Services leading the agency's oversight and strategic initiatives.
The details
Under the proposed model, CMS would assume a more active role in leading investigation direction, while private contractors continue to review claims and conduct provider interviews. This structure is intended to improve coordination between the agency and stakeholders, emphasizing pre-payment verification. The agency is also seeking tighter integration of fraud data through improved contact points with state medical boards.
Timeline
March 2025: CMS launched the Fraud Defense Operations Center.
October 7, 2026: The agency posted the request for information on SAM.gov.
November 4, 2026: The submission period for feedback closes at 11 a.m. ET.
Market Landscape
This proposal marks a strategic evolution of the Fraud Defense Operations Center, which was established by the agency in March 2025. It aligns with broader federal efforts to modernize oversight as the agency seeks to transition from post-payment recovery to proactive prevention.
Healthcare operators should anticipate closer scrutiny of billing practices as CMS assumes a more direct role in investigation oversight. Review your internal claim-submission processes and ensure data-sharing compliance aligns with updated agency guidance.
The takeaway
The agency is moving toward a more proactive, centralized approach to identifying and blocking fraudulent activity before disbursements occur. Operators should monitor the November 4, 2026, deadline for industry feedback to understand how their specific operational requirements may change.
Further reading
For broader context on federal regulatory oversight in the sector, visit Healthcare.
More information
Review the full proposal details on the SAM.gov federal contracting portal.
Live Poll
Should federal agencies take a more direct role in managing private fraud investigation contracts?
