# CMS Assumes Permissive Exclusion Authority

An HHS delegation published October 14, 2026, and effective immediately authorizes the Centers for Medicare & Medicaid Services (CMS) to independently impose certain permissive exclusions from federal healthcare programs under Section 1128(b) of the Social Security Act; mandatory exclusions remain with the HHS Office of Inspector General (OIG). For life sciences companies and other contractors or suppliers participating in these programs, a CMS exclusion could separately affect eligibility, including apart from an OIG settlement.

- Companies should review reserved-rights language in settlements and other agreements for potential CMS exclusion exposure.
- During investigations and negotiations, organizations should seek clarity on CMS’s position rather than assuming an OIG resolution addresses all exclusion risk.
- Procurement teams should account for possible exclusion-related eligibility impacts when assessing suppliers and their continued participation in federal healthcare programs.

**Jurisdictions:** federal
**Industries:** Healthcare
**Topics:** Regulatory Compliance
**Published:** October 26, 2026

### Government Entities
- Centers for Medicare & Medicaid Services (CMS)
- U.S. Department of Health and Human Services (HHS)
- HHS Office of Inspector General (OIG)
- HHS Office of General Counsel (OGC)

### Sources
- [CMS Gets New Exclusion Authority: A New Enforcement Risk for Life Sciences Companies | MoFo Life Sciences - JDSupra](https://www.jdsupra.com/legalnews/cms-gets-new-exclusion-authority-a-new-4397477) - JD Supra