Insights^

On April 2, 2026, the Centers for Medicare & Medicaid Services (CMS) released a final rule that will revise the Medicare Advantage (MA) Program, the Medicare Prescription Drug Benefit Program (Part D), and the Medicare Cost Plan Program for Contract Year 2027 (PY27).  A CMS fact sheet can be found here.  The regulation is effective June 1, 2026, and will be applicable to MA and Part D coverage beginning January 1, 2027.

MA & Part D: Updates to Star Ratings

The Medicare Advantage (MA) and Part D Star Ratings program evaluates plan performance on a 1-to-5-star scale across up to 43 measures for MA-PD contracts, 33 for MA-only, and 12 for Part D, covering categories like outcomes, intermediate outcomes, process, patient experience, and access.  Ratings are based on CMS administrative data, enrollee surveys, and plan-submitted information.  These ratings influence quality bonus payments (QBPs) for MA plans (up to 5-10% added to benchmarks for 4+ star plans), beneficiary rebates (50–70%), marketing rules, and the way consumers are presented plan options in the Medicare Plan Finder.

In keeping with the Trump administration’s effort to deemphasize equity programs, the final rule eliminates the Biden-era Excellent Health Outcomes for All reward (formerly the Health Equity Index or HEI).  This reward—finalized in the 2023 final rule for implementation in PY 2027—was intended to incentivize high measure-level performance among enrollees with specific social risk factors (SRFs), such as dual eligibility for Medicare and Medicaid, receipt of the low-income subsidy, or disability.  For PY 2027, the Biden-era reward would have given plans an HEI score ranging from -1 to 1 based on a subset of measures, and those plans with positive HEI scores would have received a bonus added to their overall Star Rating (0.4 for the top third, 0.267 for the middle third, and 0.133 for the bottom third).  CMS finalized this provision exactly as proposed, removing the HEI/Excellent Health Outcomes for All reward while retaining the historical reward factor (which similarly rewards plans but emphasizes improvement efforts in clinical care, outcomes, and patient experience across the entire patient population).  The change applies beginning with the 2027 Star Ratings.

Continuing the administration’s deregulation theme, the final rule removes 11 of the 12 measures that were proposed for removal, starting from the 2027 measurement year.  Removals take effect for the 2028- or 2029-Star Ratings, depending on the measure.  CMS finalized these 11 removals exactly as proposed, with the sole modification that it did not finalize the proposed removal of the Diabetes Care – Eye Exam (Part C) measure (which will remain in the Star Ratings program).  The measures removed under the final rule are:

• Plan Makes Timely Decisions about Appeals (Part C, 2029)
• Reviewing Appeals Decisions (Part C, 2029)
• SNP Care Management (Part C, 2029)
• Call Center – Foreign Language Interpreter and TTY Availability (Part C, 2028)
• Call Center – Foreign Language Interpreter and TTY Availability (Part D, 2028)
• Complaints about the Health/Drug Plan (Parts C and D, 2029)
• Medicare Plan Finder Price Accuracy (Part D, 2029)
• Statin Therapy for Patients with Cardiovascular Disease (Part C, 2028)
• Members Choosing to Leave the Plan (Parts C and D, 2029)
• Customer Service (Part C, 2029)
• Rating of Health Care Quality (Part C, 2029)

Additionally, CMS finalized two technical updates to the Star Ratings program.  CMS is adding a new Part C Depression Screening and Follow-Up measure to address behavioral health gaps.  The new measure begins with the 2027 measurement year and will first affect the 2029 Star Ratings.  CMS also finalized a technical clarification (originally proposed in the CY 2026 rule) regarding contract consolidations.  This clarification specifies how enrollment-weighted measure scores are calculated when a surviving or consumed contract lacks data for a particular measure due to the consolidation (changes applicable to the 2027 Star Ratings).

As finalized, these changes will, in the aggregate, have the practical effect of increasing QBPs to plans.  Simulations using 2025 Star Ratings data (accounting for changes implemented in the 2026 Star Ratings) show 63% of contracts with no change in overall rating, 13% increasing by half a star, and 24% decreasing by half a star.  Four percent of contracts would gain QBP eligibility, and three percent would lose QBP eligibility.  The shifts in Star Rating status are projected to result in an $18.56 billion net increase in Medicare Trust Fund spending over the 2027–2036 window (0.21% of MA payments).  This is higher than the $13.18 billion estimate that appeared in the proposed rule (the difference is attributable to retaining the Diabetes Care – Eye Exam measure).  Much of that increase is still expected in PYs 2028 and 2029.

MA: Operational Reforms

Per President Trump’s executive order (EO) #14192 (“Unleashing Prosperity through Deregulation”), the final rule includes several reforms intended to reduce the regulatory burden on plans and, therefore, the marginal operational costs passed on to beneficiaries by those plans.  CMS finalized all the following changes exactly as proposed:

• Exempting account-based plans from creditable coverage disclosures: Currently, group health plans, including account-based arrangements such as Health Reimbursement Arrangements (HRAs), Flexible Spending Accounts (FSAs), and Health Savings Accounts (HSAs), must disclose their creditable prescription drug coverage status to CMS and Medicare-eligible individuals. CMS finalized the amendment to exclude these plans, as they do not directly offer drug coverage but only reimburse expenses.  In practice, this eliminates redundant paperwork for about 7,049 entities (mostly HR managers), saving approximately 585 hours and $90,266 annually.
• Rescinding mid-year notices for unused supplemental benefits: MA organizations must mail individualized mid-year notices by July 31 detailing unused supplemental benefits from the Evidence of Coverage. CMS finalized the complete rescission of this requirement.  Practically, this reduces administrative burdens, yielding annual savings of $1.36 million in printing/mailing, plus prevented one-time costs of approximately $499,000 for system updates.
• Eliminating health disparities activities in MA quality improvement programs: Under § 422.152(a)(5), MA organizations must incorporate activities to reduce health disparities into their Quality Improvement (QI) programs. CMS finalized the removal of this requirement.
• Eliminating health equity requirements for MA Utilization Management (UM) Committees: Current rules at § 422.137(c)(5) require a health equity expert on UM Committees, and §§ 422.137(d)(6)–(7) mandate annual health equity analyses of prior authorizations. CMS finalized the rescission of these provisions.  In practice, this streamlines committee operations by saving about 6,040 hours and $814,000 annually in data aggregation and posting, enabling focus on core UM functions.
• Waiving the LI NET call center hours requirement: The Limited Income Newly Eligible Transition (LI NET) program currently requires toll-free call centers to be open from 8 a.m. to 8 p.m. in all regions. CMS finalized the amendment to limit hours to 8 a.m.–7 p.m. ET, Monday–Friday.  This adjustment accounts for low call volumes and 24/7 pharmacy support, saving $800,000–$1 million annually in operational costs.
• Removing restrictions on the time and manner by which beneficiaries can have conversations with licensed agents and brokers: Current regulations impose specific timing restrictions on beneficiary outreach, including a 12-hour delay requirement between educational events and marketing events in the same location and a 48-hour waiting period between completion of a Scope of Appointment form and a personal marketing appointment. CMS finalized the removal of these timing restrictions (along with the related prohibition on collecting Scope of Appointment forms at educational events).  This change provides greater flexibility for plans, agents, and beneficiaries while preserving core consumer protections.

MA: Supplemental Benefits and Seriously Ill Beneficiary Supplemental Coverage Items (SSBCI)

Continuing its focus on reducing regulatory burden while clarifying allowable supplemental benefits, CMS finalized several targeted reforms to supplemental benefits and SSBCI administration.  CMS finalized these provisions largely as proposed (with only minor technical refinements):

• Cannabis clarification: CMS refined the regulatory language to state more precisely that cannabis products that are illegal under applicable State or Federal law are not allowable as SSBCI.
• Public posting of SSBCI eligibility criteria: CMS finalized the requirement that MA organizations publicly post their plan-developed objective eligibility criteria for SSBCI on their website to increase transparency for beneficiaries.
• Debit card rules for supplemental benefits: CMS codified and clarified requirements for administering supplemental benefits through debit cards, including real-time electronic verification at the point of sale and limiting cards to the specific plan year. CMS did not finalize the proposed prohibition on marketing the dollar value of supplemental benefits on the debit card itself.

MA: Special Enrollment Period Reforms

The MA program currently includes a Special Enrollment Period (SEP) for enrollees affected by a “significant” provider network change, such as terminations of providers or facilities, where significance is determined, case by case, by CMS and the MA organization based on factors like the scale of the termination.  Affected enrollees – those assigned to, receiving care from, or who received care within the past three months from the terminated provider – can switch MA plans or disenroll to Original Medicare, but only if notified of eligibility.  MA organizations must send termination notices, but these do not always include detailed SEP information, and separate notifications may be required for eligibility.  CMS guidance (but not rules) requires that certain other SEPs, such as those for CMS sanctions, contract violations, or exceptional circumstances, receive CMS approval.

In the PY 2027 proposed rule, CMS proposed to modify the SEP for provider terminations by renaming it from “Significant Change in Provider Network” and eliminating the “significant” determination requirement, making eligibility automatic for affected enrollees upon any no-cause provider or facility termination.  The SEP would begin in the month of eligibility notification and last for two additional calendar months, usable once per network change, with MA organizations assessing eligibility via beneficiary attestations rather than solely through 1-800-MEDICARE.  Termination notices would be enhanced to include mandatory details on SEP eligibility, start/end dates, Annual Enrollment Period (AEP), MA Open Enrollment Period (MA-OEP), Medigap guaranteed issue rights, and impacts on employer/union coverage.

CMS did not finalize these proposed modifications to the provider termination SEP.  The existing “Significant Change in Provider Network” SEP remains unchanged.  CMS acknowledged broad stakeholder interest in the topic but stated it will continue to consider the extent to which rulemaking may be appropriate in this area.

Separately, CMS proposed codifying the requirement for prior CMS approval of certain SEPs at §§ 422.66(g), 423.32(k), and 423.36(g), mandating that MA organizations obtain approval via CMS-operated mechanisms (e.g., 1-800-MEDICARE, Online Enrollment Center, or notices) before transmitting elections for specified SEPs like contract violations or sanctions.  CMS finalized this provision exactly as proposed.  The final rule adds explicit language to the affected SEP provisions in §§ 422.62(b) and 423.38(c) and corresponding limitations in §§ 422.66(g), 423.32(k), and 423.36(g) to require CMS approval prior to use of these SEPs.  This codifies longstanding policy and guidance without adding new burden.

MA: Requests for Information (RFIs)

CMS includes several RFIs in the PY27 Proposed Rule to gather public input on enhancing the Medicare Advantage program.  The Final Rule included the following commentary from CMS regarding stakeholder feedback and the agency’s reaction to the responses…

• Dually Eligible Individual Enrollment Growth in C-SNPs and I-SNPs: CMS sought comments on the significant growth in dually eligible individuals enrolling in chronic condition special needs plans (C-SNPs) and institutional special needs plans (I-SNPs) rather than dual eligible special needs plans (D-SNPs). Stakeholders expressed strong concerns about care fragmentation and recommended requiring State Medicaid Agency Contracts and D-SNP-like integration rules for plans with high dual enrollment.  CMS will consider the feedback received for potential future rulemaking.
• Future Directions in Medicare Advantage Risk Adjustment: CMS solicited input on modernizing the MA program through risk adjustment, including leveraging AI and alternative data sources for next-generation models to promote data transparency, quality improvement, competition, taxpayer savings, and fraud reduction. Stakeholders supported greater data transparency and alignment with Original Medicare data, while stressing privacy protections.  CMS will consider the feedback for possible future rulemaking or demonstration projects.
• Future Directions in Medicare Advantage Star Ratings: CMS requested feedback on simplifying and streamlining the Star Ratings program, including reducing timelines from measure development to implementation and shortening the lag between measurement years and payment application. Stakeholders supported simplification but many opposed broad measure removals due to potential impacts on oversight of SNPs.  CMS will consider the input for potential future rulemaking.
• Quality Bonus Payments in Medicare Advantage: CMS sought information to refine the Quality Bonus Payment structure and its impact on rebates, including options to shorten new-measure implementation timelines and delink bonuses from MA bids. Stakeholders provided input on refining the structure to better balance quality incentives with cost containment.  CMS will consider these comments for future policy development.
• Well-Being and Nutrition: CMS solicited input on tools and policies to improve overall health, happiness, and life satisfaction in MA, including emotional well-being, social connections, self-care, and nutrition strategies. Stakeholders offered ideas for expanding supplemental benefits related to food, housing, and social connections to support prevention and wellness.  CMS will consider the feedback received for potential future rulemaking.
• Marketing and Communications Oversight: CMS sought comments on modernizing agent/broker regulations and marketing requirements, including redefining the TPMO definition, modifying translation thresholds, and revising testimonial standards. Stakeholders offered broad support for burden-reducing changes such as adjustments to disclaimers and retention periods.  CMS will consider the feedback for potential future rulemaking.
• Other Medicare Advantage Program Areas: CMS solicited input on deregulation and simplification across various MA aspects, such as updating medical loss ratio calculations, streamlining network adequacy reviews, and revising SNP Model of Care requirements. Stakeholders expressed widespread support for further deregulation and streamlining to reduce administrative burden.  CMS will consider the comments for future efforts to streamline the program.

Part D: Implementing Certain Provisions of the Inflation Reduction Act (IRA) of 2022

The IRA significantly redesigned the Medicare Part D benefit to lower beneficiary costs, including eliminating the coverage gap phase, reducing the annual out-of-pocket (OOP) threshold starting at $2,000 (with annual indexing based on per capita Part D costs or CPI-U), and removing enrollee cost sharing in the catastrophic phase (setting it to $0 after the OOP threshold is met).  It also terminated the Coverage Gap Discount Program (CGDP) and replaced it with the Manufacturer Discount Program (MDP).  The IRA granted CMS temporary authority to implement these changes through sub-regulatory program instructions and guidance through 2026.  CMS finalized the codification of these reforms in the Contract Year 2027 final rule.

• CMS finalized the termination of the CGDP as proposed. The CGDP (under which manufacturers provided 70% discounts on applicable drugs for non-LIS beneficiaries in the coverage gap) technically terminated on January 1, 2025, but continues to handle discounts and reconciliations for drugs dispensed before that date.  The final rule permanently sunsets the program.
• CMS finalized the establishment of a new Subpart AA to codify the MDP for 2027 and beyond largely as proposed. Manufacturers must enter agreements covering all labeler codes for applicable drugs and provide 10% discounts in the initial coverage phase and 20% in the catastrophic phase (calculated on negotiated price including dispensing fees, taxes, and units), with phase-ins for specified manufacturers (based on 2021 Part D spending ≥1% or 2.5% for LIS/non-LIS) and small manufacturers (one drug ≥80% of expenditures).  The final rule includes detailed rules on aggregation, acquisitions, terminations, audits, disputes, and civil penalties, with only minor technical refinements from the proposal.
• CMS finalized the codification of OOP changes for 2027 and beyond exactly as proposed by revising § 423.100 to limit “coverage gap” definitions to 2006–2024, amending § 423.104(d)(4) for pre-2025 applicability, eliminating the initial coverage limit post-2024 (§ 423.104(d)(3)(iii)), setting the reduced OOP threshold at $2,000 for 2025 and indexing it annually (§ 423.104(d)(5)(iii)(G)–(H)), and confirming $0 cost sharing in the catastrophic phase (§ 423.104(d)(5)(i)).

In addition to the core IRA codifications described above, CMS finalized several related technical and operational updates to Part D program rules.  These include clarifications to true-out-of-pocket (TrOOP) calculations, specialty-tier cost-sharing rules, reinsurance payment methodologies, and implementation details for the Selected Drug Subsidy.  CMS finalized all these technical provisions exactly as proposed.

On March 18, 2026, the House Ways and Means Health Subcommittee held a hearing focused on improving kidney health. Both Republicans and Democrats recognized the need to increase funding for and awareness of kidney disease in order to better address the needs of the community. Democrats also took the opportunity to argue that provisions within the One Big Beautiful Bill Act will reduce health care coverage and therefore harm this community.

OPENING STATEMENTS

• Subcommittee Chair Vern Buchanan (R-FL-16)
• Subcommittee Ranking Member Lloyd Doggett (D-TX-37)

WITNESSES

• Ms. Ashli Littleton, Home Dialysis Patient – Testimony
• Dr. Suzanne Watnick, MD, Health Policy Scholar, American Society of Nephrology – Testimony
• Dr. Robert Taylor, MD, Chief Medical Officer, DCI – Testimony
• Mr. John P. Butler, President and CEO, Akebia Therapeutics – Testimony

MEMBER DISCUSSION

Innovation and Education

Both Republicans and Democrats highlighted the lack of innovation in kidney care compared with other chronic illnesses and the need for education. Ranking Member Lloyd Doggett (D-TX-37) and Rep. Suzan DelBene (D-WA-1) both asked how to help incentivize kidney care research and how to encourage providers to use the new practices. Dr. Watnick explained that the National Institutes of Health (NIH) is devoting only $19 per patient with end-stage kidney disease, despite reports that investments can save money in the long run. She described the importance of KidneyX, a new program that incentivizes people to develop innovative solutions for kidney disease, in encouraging people to think more about prevention, treatments, and cures. In response from a question from Rep. Brian Fitzpatrick (R-PA-1) about why kidney innovation hasn’t kept pace with that of other chronic illnesses, Mr. Butler explained that the dollars currently don’t follow the patient, so a small provider risks the survival of a dialysis center if they administer new practices.

Subcommittee Chair Vern Buchanan (R-FL-16) and Rep. Judy Chu (D-CA-28) asked about preventing kidney disease and ensuring patients were well educated on their care options. Dr. Watnick expressed the importance of starting upstream in primary care offices to ensure providers are screening their patients for kidney disease and educating them on the possible signs. She also explained the importance of providers detailing all of the care options for a patient once diagnosed with kidney disease, so they can make the best choice for them.

At-Home Dialysis vs In-Center Dialysis

The Committee spent time working to better understand the differences between at-home and in-center dialysis treatment. Rep. Adrian Smith (R-NE-3) and Rep Carol Miller (R-WV-1) asked Ms. Littleton about her personal experience on home dialysis and how it has impacted her life. She explained that it is much more flexible and allows her to continue working while receiving her treatments on her own schedule. She also highlighted the importance of the staff-assisted program, which gives her more confidence in her own abilities and in the support she would receive should anything go wrong at home.

Rep. Greg Murphy (R-NC-3) and Rep. Rudy Yakym (R-IN-2) asked about the requirements and hurdles patients face in accessing home dialysis. Dr. Watnick identified the main barrier as education for not only patients, but also providers who do not know to mention it to their patients as an option. She explained that a lot of patients are very interested in the opportunity to receive dialysis at home once the treatment is explained to them. Dr. Taylor also explained that providers are incentivized to offer only in-center dialysis because they receive higher reimbursement rates for that care than for at-home dialysis.

Coverage of Care

Both Republicans and Democrats brought up the costs associated with accessing care. Ranking Member Doggett (D-TX-37) expressed concerns regarding changes to Medicare and Medicaid made by the One Big Beautiful Bill Act and how it would impact patients. He also brought up other concerns about access to care for Medicare beneficiaries, including those enrolled in Medicare Advantage. Dr. Watnick raised concerns about needing prior authorization in Medicare Advantage to receive life-saving dialysis and the lack of data-sharing within Medicare fee-for-service payments, which makes it difficult to provide correct care. Full Committee Chair Jason Smith (R-MO-8) asked about coverage of the Medicare payment policies in terms of innovation. Mr. Butler discussed the shortcomings of the Medicare payment policy, which are below what is typically spent caring for the patient, leading to care centers drowning in costs. He also discussed the lack of reimbursements for innovative care, which he said discourages providers, despite the two-year Transitional Drug Add-on Payment Adjustment (TDAPA) program. Rep. Claudia Tenney (R-NY-24) also asked if TDAPA would function better if it was patient driven rather than facility driven. Mr. Butler explained this would help spread the money across all types of care and give providers more stability as the money would follow the patient.

Kidney Transplants

While most of the focus was on dialysis, some Committee members emphasized the importance of ensuring access to transplants and improving that process. Rep. Murphy (R-NC-3) asked about the barriers to transplant. Dr. Taylor explained that the current regulatory controls restrict the ability to get kidneys to every patient until they are in kidney failure, which means a long dialysis process prior to the transplant. Rep. Danny Davis (D-IL-7) asked how to best help patients who need a transplant. Ms. Littleton voiced that there needs to be more accessible information on why kidneys are needed and what the donor process looks like. Rep. DelBene (D-WA-1) raised concerns about living donor costs and how best to address them. Dr. Watnick explained that living donations have remained stagnant while deceased donations have increased over the past 2 decades. She described the need for wage reimbursement and child-care expenses to allow people to donate their kidneys.

Care in Rural Communities

Multiple members focused on rural communities and the unique challenges they face when getting kidney care. Full Committee Chair Smith (R-MO-8) asked what the specific challenges are in delivering care in rural areas. Dr. Taylor explained that yearly adjustments to Medicare are not meeting needs, and clinics need higher reimbursement rates to keep their doors open. He further explained that there is typically only one clinic in a rural county, which is already difficult for patients to access, so it is vital that they remain open. Rep. Steven Horsford (D-NV-4) asked which policies Congress could pursue to strengthen the rural health infrastructure to address kidney care. Dr. Watnick described the need to ensure affordable healthcare, education for providers and patients, and the availability of providers whom people in rural communities can relate to.

On March 18, 2026, the House Energy and Commerce Health Subcommittee held a hearing to examine the US health provider landscape. Subcommittee members raised concerns about hospital consolidation, price transparency, the health care workforce, and the impact of the One Big Beautiful Bill Act, among others. While there was bipartisan concern about the high cost of health care, members did not agree on paths forward.

OPENING STATEMENT

• Subcommittee Chairman Morgan Griffith (R-VA-9)

• Subcommittee Ranking Member Diana DeGette (D-CO-1)

• Full Committee Chairman Brett Guthrie (R-KY-2)

• Full Committee Ranking Member Frank Pallone (D-NJ-6)

WITNESS TESTIMONY

• Mr. Richard Pollack, President and CEO, American Hospital Association – Testimony
• Dr. David H. Aizuss, MD, Chair, Board of Trustees, American Medical Association – Testimony
• Mr. R. Shawn Martin, Executive Vice President and CEO, American Academy of Family Physicians – Testimony
• Ms. Elizabeth Mitchell, President and CEO, Purchaser Business Group on Health – Testimony
• Dr. Anthony DiGiorgio, DO, MHA, Neurosurgeon, University of California, San Francisco Health – Testimony
• Ms. Barbara Merrill, CEO, American Network of Community Options and Resources – Testimony

MEMBER DISCUSSION

Hospital Consolidation

Subcommittee Republicans were very concerned about the loss of independent medical practices and increasing consolidation. Rep. Neal Dunn (R-FL-2) asked Mr. Pollack to explain how hospitals are consolidating, but Mr. Pollack shared that hospitals themselves are not the major driver of consolidation. Instead, Mr. Pollack emphasized the role of private equity and shared that many private practices seek to be part of a hospital system due to the burden of compliance and administrative costs. Additionally, he stated that hospital systems are often a lifeline for rural hospitals. Rep. Kat Cammack (R-FL-3) asked if the consolidation lowers prices for patients. Mr. Pollack explained that it reduces operating costs and often improves quality of care, but the reductions in cost are not seen by patients, as hospitals still maintain the contracted rates with insurers. Rep. John Joyce (R-PA-13) was curious about how larger hospital systems react to referrals to providers outside the system. Mr. Martin shared that, in his experience, it is not looked favorably upon, and Dr. DiGiorgio agreed, sharing that providers that he knows have been reprimanded. Rep. Nanette Diaz Barragan (D-CA-44) asked about how to prevent consolidation, and Dr. Aizuss responded that greater reimbursements under the Medicare Fee Schedule will prevent private practices from seeking to sell to larger systems.

Price Transparency

There were many suggestions for pricing transparency reforms during the Subcommittee hearing. Rep. John James (R-MI-10) highlighted H.R.5582, the Patients Deserve Price Tags Act. Ms. Mitchell expressed support for this bill, sharing that pricing information is helpful in increasing competition and accountability. Rep. Nick Langworthy (R-NY-23) suggested an advanced explanation of benefits would help patients understand the cost of care before they receive it. Mr. Pollack shared that the idea has promise, and he said that hospitals have been working with stakeholders to provide cost information to patients. Mr. Pollack continued to explain that many hospitals are committed to helping their patients but are confused by the many different laws and regulations that have been passed in the past decade regarding price transparency procedures.

Impact of Reconciliation Bill

Many Democrats were focused on the impacts of the One Big Beautiful Bull Act, specifically the changes to Medicaid. Full Committee Ranking Member Pallone (D-NJ-6) and Health Subcommittee Ranking Member DeGette (D-CO-1) were interested in how the bill’s changes will impact the delivery of health care services and which ones will be most affected. Ms. Merril shared her view that providers will see a reduction in reimbursement rates across the board, but home and community-based care will be greatly impacted as they are not required services. Rep. Raul Ruiz (D-CA-25) and Rep. Lori Trahan (D-MA-3) questioned what the effect will be on hospital systems. Mr. Pollack explained that, in his view, emergency departments will see higher patient volumes, and services for obstetrics, behavioral health, and pediatrics will be greatly reduced or eliminated. Mr. Pollack also said that in severe cases, hospitals will close.

Workforce

Rep. Marc Veasey (D-TX-33) highlighted the current physician shortage and asked for Dr. Aizuss to elaborate on the future impacts of this shortage. Dr. Aizuss shared that it will be more difficult for patients to receive care and that this problem will only get worse as less students attend medical schools in the future due to the high cost of tuition. Rep. Cliff Bentz (R-OR-2) wanted to know what strategies could be helpful in addressing this issue. Dr. DiGiorgio emphasized the need for more residency spots and suggested Congress find ways to increase physician autonomy, like private practices, to keep physicians in the workforce for longer.

Other Topics

• Rep. Buddy Carter (R-GA-1) highlighted H.R.5256, the 340B ACCESS Act, and asked if Mr. Pollack would be supportive of the bill. Mr. Pollack shared that the 340B program benefits patients by providing additional services and that he could be interested in a conversation with Rep. Carter about his proposals.
• Rep. Erin Houchin (R-IN-9) highlighted the reimbursement differences between Medicare, Medicaid, and private payers. Dr. Aizuss agreed and emphasized the need for Medicare and Medicaid payment reform, including updates for inflation.
• Health Subcommittee Chairman Griffith expressed support for physician owned hospitals and questioned Mr. Pollack about his concerns. Mr. Pollack explained that while he is not opposed to physician-owned hospitals, they often do not provide all services, such as emergency departments and obstetric care, and many do not accept Medicaid. Dr. DiGiorgio responded that all hospitals expand access to care.

On March 17, 2026, the House Energy and Commerce Oversight and Investigations Subcommittee held a hearing on the role of the Centers for Medicare & Medicaid Services (CMS) in combating Medicare and Medicaid fraud. While both Democrats and Republicans agreed that fraud is hurting the program and its beneficiaries and should be stopped, they disagreed on the current practices CMS is using to assess state programs and identify fraud.

OPENING STATEMENTS

• Subcommittee Chairman John Joyce (R-PA-13)

• Subcommittee Ranking Member Yvette Clarke (D-NY-9)

• Full Committee Chairman Brett Guthrie (R-KY-2)

• Full Committee Ranking Member Frank Pallone (D-NJ-6)

WITNESS TESTIMONY

• Kim Brandt, Deputy Administrator and Chief Operating Officer, Centers for Medicare and Medicaid Services – Testimony

MEMBER DISCUSSION

Current Tactics Used to Find and Prevent Fraud

There was bipartisan questioning regarding the tactics CMS is currently using to identify and combat fraud. Full Committee Chair Brett Guthrie (R-KY-2) asked about the Fraud Defense Operation Center being referred to as the Fraud War Room. Ms. Brandt described this center as staffed by a mix of medical professionals and law enforcement, and she emphasized its data-driven approach to comparing Medicare and Medicaid spending with the state’s population enrolled in the programs. Rep. Diana Harshbarger (R-TN-1) asked Ms. Brandt about the most common types of fraud. Ms. Brandt listed fraud related to skin substitutes, genetic testing, hospice, home health, and durable medical equipment as being at the top of the list.

Vice Chairman Troy Balderson (R-OH-12) asked whether the provider verification and cross-check methods have been an effective tool. Ms. Brandt described them as very effective, specifically for on-site visits, background checks, fingerprinting, and data matching against the Social Security Death Masterfile. Rep. Lizzie Fletcher (D-TX-7) expressed concerns about the sharing of this data, to which Ms. Brandt explained CMS’s view that shared data can help identify types of fraud, but it must be protected.

Minnesota Investigation

Democrats used the Minnesota investigation as a cornerstone throughout their questioning. Subcommittee Ranking Member Yvette Clarke (D-NY-9) and Full Committee Ranking Member Frank Pallone (D-NJ-6) asked for more details on the steps taken as CMS has worked with Minnesota. Ms. Brandt explained that a team of experts from the Center for Program Integrity at CMS evaluated the corrective action plan submitted by Minnesota, and she personally communicated the feedback to them. Ranking Member Pallone then questioned the decision to withhold funds, given CMS historically withholds funds only when a state refuses to cooperate, which he argued Minnesota has done. Ms. Brandt said CMS only said it could withhold funds and that no action would be taken until the agency thoroughly reviewed the corrective action plan. She further explained that they determined Minnesota had adequate funds to sustain programming and said they would share the analysis with the subcommittee.

California Investigation

Another major topic for members of both parties was CMS’s investigation into alleged Medicare home health care and hospice fraud in California. Subcommittee Chair John Joyce (R-PA-13) and Rep. Kevin Mullin (D-CA-15) asked about these investigations. Ms. Brandt explained that she and Dr. Oz were recently in California and are planning to visit several states to conduct site visits to evaluate the condition of care centers and ensure that valid and legitimate services are being provided.

Future of Fraud Prevention in CMS

Republicans spent more time on the future of CMS’s anti-fraud efforts. Rep. Rick Allen (R-GA-12) and Rep. Harshbarger (R-TN-1) asked where Ms. Brandt sees current practices progressing. She explained they are working to create a 50 State Medicaid Program Integrity Playbook with the best practices so states can learn from one another. She further explained that they are working towards a “Stop and Cop” system, rather than a “Pay and Chase” system, to prevent money from being lost to fraud rather than attempting to recover it.

Other Topics

• Rep. Randy Weber (R-TX-14) asked how CMS is working to educate the elderly about suspected fraudulent activity. Ms. Brandt explained that Dr. Oz is making videos encouraging beneficiaries to call HHS and CMS if they suspect fraud, and that they are working with state officials to improve patrols.

• Rep. Lori Trahan (D-MA-3) and Rep. Kim Schrier (D-WA-8) questioned the removal of the independent Inspector General and President Trump’s pardoning of a number of people who have been convicted of fraudulently using Medicare and Medicaid services.

• Rep. Paul Tonko (D-NY-20) raised concerns about Vice President Vance’s involvement in antifraud efforts as he was designated by President Trump to be the anti-fraud lead.

• Rep. Buddy Carter (R-GA-1) voiced apprehensions regarding skin substitute fraud and the possibility of adverse effects for those needing care. Ms. Brandt stated they have not seen any adverse effects yet.

On March 2, 2026, the Medicare Payment Advisory Commission (MedPAC) held the first day of its March meeting. The Commissioners held two sessions on the Medicare Advantage (MA) program, where they discussed the impacts of provider networks for beneficiaries as well as possible risk-adjustment policies. While the Commission is not planning to publish the work presented in these sessions in future reports to Congress, it was noted that the conversations would help guide future work by the Commission.

PROVIDER PARTICIPATION IN MA NETWORKS

MedPAC staff began the session by offering a comprehensive overview of MA networks and the beneficiary experience. Staff noted that provider participation in specific networks can change mid-year, which can greatly impact the beneficiary experience. Through 2023 claims and encounter data, MedPAC staff found that most clinicians participated in at least 1 MA network, with 75% of providers participating in 3 or more networks. Staff highlighted how mid-year provider network changes can be disruptive for enrollees as beneficiaries need to find new providers. MedPAC staff found that from February 2023 to June 2023, MA networks experienced a net increase in providers, with a 3% increase in primary care providers (PCPs) and a 1% increase in specialists. However, providers still left networks, with 6% of PCPs and 4% of specialists exiting by mid-year.

Commissioners were most interested in understanding the level of access beneficiaries have to providers, noting that provider participation in a network does not directly translate into beneficiaries having access in a reasonable amount of time. Some suggestions for ways to better measure access included understanding the types of care beneficiaries receive out of network, analyzing Consumer Assessment of Healthcare Providers and Systems (CAHPS) scores for correlation rates, and offering structured interviews with beneficiaries, providers, and hospitals.

A few Commissioners suggested that future work could examine reasons why providers left a network, with one Commissioner pointing out that a large decrease in provider availability in a single network may be due to a larger system deciding not to renew a contract. One Commissioner who works in the space shared that, in his opinion, there are significant differences between data from 2023 and data from 2026 due to changes that reward clinical performance. The Commissioner explained that many MA plans are taking actions to steer beneficiaries towards high-performing but lower-cost care options, and removing higher-cost providers, which may have an impact on network robustness.

The Chair wrapped up the session by sharing that overall, the core value of the health system is being able to see a provider when care is needed, and conversations about MA provider networks can be difficult due to data completeness issues.

CONSIDERATIONS FOR IMPLEMENTING MA ENCOUNTER DATA IN RISK ADJUSTMENT

The MedPAC staff member provided an overview of how risk adjustment affects payments to MA plans and policy decisions that would need to be made in order to calibrate a risk adjustment system. There were 3 options presented. Under the first option, MA and Fee-For-Service (FFS) scores would be calculated from an MA-based risk model. Under the second option, MA and FFS risk scores would be calculated from separate MA-based and FFS-based risk models. Under the third option MA spending-based benchmarks would be calculated from existing MA data sources. Each option had different impacts on coding intensity and favorable selection, as well as partially or fully delinking MA payments from FFS data.

The Commissioners were very receptive to the presentation. No Commissioners expressed support for the first option, while options 2 and 3 were both of interest for future consideration. There was a desire from many Commissioners to create an external anchor for calculating payments, with a fear that if there is not an external source, it could be very easy for payments to increase drastically.

Commissioners had a few other considerations for a possible model, including clearly defining what constitutes an encounter, understanding the effects of different coding intensities, and separating benchmark and risk-adjustment policies. Commissioners shared the sentiment that moving towards a risk-adjustment model would improve plan data collection and reporting, which could be beneficial for other analyses.

Overall, the Commissioners were supportive of the options presented but wanted more pressure testing to better understand the possible implications for beneficiaries before a recommendation could be discussed.