Insights^

On September 15, the Senate Finance Committee held a hearing to consider the nominations of Chris Klomp, to be Deputy Secretary of Health and Human Services (HHS), and Dr. Ge Bai, to be Assistant Secretary of Planning and Evaluation. Senators focused on the nominees’ fitness for the roles as well as their views on vaccines. Members also discussed other topics such as hospital competition and pharmacy benefit manager (PBM) transparency. Ranking Member Ron Wyden (D-OR) shared that he would be voting against the nomination of Mr. Klomp. Both nominations must next be voted out of the Finance Committee before advancing to the full Senate for confirmation votes.

OPENING STATEMENTS

• Chairman Mike Crapo (R-ID)
• Ranking Member Ron Wyden (D-OR)

WITNESS TESTIMONY

• Chris Klomp, to be Deputy Secretary of HHS – Testimony
• Ge Bai, PhD to be Assistant Secretary of Planning and Evaluation – Testimony

MEMBER DISCUSSION WITH MR. KLOMP

Leadership and Competency

There was bipartisan interest in Mr. Klomp’s leadership skills and competence for the role of HHS Deputy Secretary. Chairman Mike Crapo (R-ID) asked how Mr. Klomp would describe his leadership style and how he would use it to ensure the department fulfills its intended objectives. Mr. Klomp shared that he has had the chance to lead in many different settings, but what he has seen consistently across all teams is the importance of building trust. Mr. Klomp continued that trust is built on competence, respect, and integrity, which allows for conversations and collaborations which he said he hopes to deliver across HHS.

Sen. Raphael Warnock (D-GA) questioned if Mr. Klomp and HHS Secretary Kennedy had ever disagreed on a decision. Mr. Klomp responded that he has a reputation with the Secretary and President Trump for speaking plainly and sharing his opinion, even when he disagrees, and he was nominated with that knowledge in mind.

Vaccines

Committee Democrats voiced many concerns about vaccine rhetoric in the Trump administration. Ranking Member Wyden asked Mr. Klomp if he believed the Measles, Mumps, and Rubella (MMR) vaccine causes autism. Mr. Klomp stated that the MMR vaccine is the most effective public health tool to prevent measles and that he does not believe the MMR vaccine causes autism. Ranking Member Wyden and Sen. Ben Ray Lujan (D-NM) both pressed Mr. Klomp on statements made by President Trump that called into question the safety of the MMR vaccine. Mr. Klomp responded that he believes in the safety of the MMR vaccine, but that President Trump believes in the power of parental choice for vaccines. Sen. Michael Bennet (D-CO) asked if Mr. Klomp thinks conflicting messaging about vaccines from the president and CMS administrator is an issue. Mr. Klomp shared that HHS needs to communicate guidance clearly and earn the trust of the American people, and he stated that he is concerned about the increase in vaccine hesitancy.

Sen Ron Johnson (R-WI) asked for Mr. Klomp to explain why studies into the COVID-19 vaccine and vaccine injuries were ended by the department without being released. Mr. Klomp expressed his view that any research conducted by HHS should be published.

Pharmacy Benefit Managers (PBMs)

Sens. James Lankford (R-OK) and Marsha Blackburn (R-TN) asked how Mr. Klomp plans to implement new PBM regulations regarding price transparency. Mr. Klomp said he is not an expert in PBM practices, but he is committed to ensuring experts lead implementation strategies and will lend technical expertise to Congress as needed.

Mifepristone

Sen. Catherine Cortez Masto (D-NV) questioned the current safety review being conducted by the FDA on mifepristone, highlighting that it has been approved for over 20 years. Mr. Klomp stated that he has not been closely involved with the review but understood that the FDA is following regulatory guidance to rereview the drug now that it can be prescribed without an in-person visit with a provider. Sen. Steve Daines (R-MT) encouraged the FDA to complete the review and asked if the agency is on track to publish the review by the end of 2026. Mr. Klomp assured the senator that the review was being conducted and is on track to publish any required reports.

Biotechnology and US Competitiveness

Sens. Bill Cassidy (R-LA) and Daines both highlighted increased concerns about the US’s ability to remain competitive with China in the biotechnology sphere. Mr. Klomp agreed and shared that the FDA is working to streamline the research and development process while ensuring that US biotechnology companies are not harmed.

Other Topics

• Sen. Sheldon Whitehouse (D-RI) raised the issue of Rhode Island’s lower Medicare Wage Index compared to other local states and Mr. Klomp committed to working with him.
• Sen. Elizabeth Warren (D-MA) pressed Mr. Klomp to ensure the release of the contract deals made with pharmaceutical companies for TrumpRx. Mr. Klomp answered that information is available on the TrumpRx website.
• Sen. Cortez Masto questioned the change in federal funding for Medicare Fraud Control Units at the same time the administration has publicly called for combating fraud. Mr. Klomp stated that he would look into it to better understand the issue.
• Sen. Cassidy asked how Mr. Klomp would address what he described as a lack of regulatory alignment between the Food and Drug Administration (FDA) and CMS for the approval of and reimbursement for new medical devices. Mr. Klomp acknowledged the issues that the differences between the agencies can cause and said he would work to reduce stakeholder frustration if confirmed.

Member Discussion with Dr. Bai

Member discussion with Dr. Bai was much more limited. Sen. Johnson asked Dr. Bai if she has an estimate of the level of fraud across HHS funding. Dr. Bai responded that addressing fraud is a structural issue, not a surface-level issue.

Sen. Cassidy questioned some states’ proposed policies to cap hospital expenditures and asked for her thoughts on the topic of price controls. Dr. Bai shared that capping prices is addressing the symptom but not the cause of increased prices and that competition is needed to decrease costs.

On September 15, the House Energy and Commerce Health Subcommittee held a hearing to examine legislative proposals to reform Medicare provider payment and bolster health care cybersecurity. Members expressed urgency on physician payment reform and signaled interest in moving the legislation discussed before the end of Congress. Democratic members also took the opportunity to highlight their disagreements with H.R. 1, otherwise known as the One Big Beautiful Bill Act. The member discussion section below is organized by bill. Bills for which there was not significant discussion include only the bill description.

OPENING STATEMENT

• Health Subcommittee Chairman Morgan Griffith (R-VA-9)
• Health Subcommittee Acting Ranking Member Lizzie Fletcher (D-TX-7)
• Full Committee Chairman Brett Guthrie (R-KY-2)
• Full Committee Ranking Member Frank Pallone (D-NJ-6)

WITNESS TESTIMONY

• Greg Garcia, Executive Director for Cybersecurity, Healthcare and Public Health Sector Coordinating Council (HSCC) – Testimony
• Anthony Pudlo, PharmD, MBA, MS, CEO, Tennessee Pharmacists Association (TPA) – Testimony
• Murad Alam, MD, MSCI, MBA, FAAD, President, American Academy of Dermatology Association (AADA) – Testimony
• Rebecca Andrews, MS, MD, MACP, Immediate Past Chair, Board of Regents (2026-2027), American College of Physicians (ACP) – Testimony
• Eilean Attwood, MD, MPH, Immediate Past Chair of the Committee on Health Economics and Coding, American College of Obstetricians and Gynecologists (ACOG) – Testimony
• Gabi Conecker, MPH, Co-Founder and Executive Director, Decoding Developmental Epilepsies – Testimony

MEMBER DISCUSSION

H.R. 9693, Patients First Act

This bill would provide a permanent annual inflation update to Medicare physician payments tied to the Medicare Economic Index (MEI) minus 1, raise the budget neutrality threshold, establish a 5-year hybrid payment pilot for independent primary care practices, and reform the Merit-based Incentive Payment System (MIPS) quality reporting program.

Full Committee Chairman Brett Guthrie (R-KY-2) and Reps. Troy Carter (D-LA-2), Greg Landsman (D-OH-1) and John Joyce (R-PA-13) asked Drs. Alam and Andrews how the bill’s reforms would address challenges physicians face under the system created by the Medicare Access and CHIP Reauthorization Act (MACRA). Dr. Alam identified 3 compounding problems: the lack of an inflation update, the inequality inherent in budget neutrality requirements, and administrative burdens driving health care consolidation. Dr. Andrews highlighted the 5-year hybrid pilot as allowing primary care practices to be compensated for care coordination work that fee-for-service does not cover.

Health Subcommittee Vice Chair Diana Harshbarger (R-TN-1) asked Dr. Andrews whether Medicare’s payment structure is contributing to the primary care workforce shortage. She said it is and pointed to the lack of an inflation adjustment since 2001 as a contributing factor. Rep. Erin Houchin (R-IN-9) followed up, asking what the reforms would mean for rural independent practices. Dr. Andrews called the bill “the first bit of hope I’ve had in a long time” and stated that payment stabilization would allow independent practices to maintain a viable business model.

Reps. Kim Schrier (D-WA-8) and Troy Balderson (R-OH-12) asked Dr. Alam about MIPS measures for dermatologists. He explained that current measures do not reflect actual quality, are rarely developed with specialist input, and cost physicians roughly 53 hours and $13,000 a year without improving care. He recommended building quality measurements across all specialties from existing clinical data registries.

Rep. Raul Ruiz (D-CA-25) pressed both Dr. Alam and Andrews on whether they would prefer full MEI reimbursement. Both said yes but called the Patients First Act a great first step at a time when change is needed.

H.R. 3164, Ensuring Community Access to Pharmacist Services (ECAPS) Act

This bill would create Medicare Part B coverage for pharmacist-provided testing and treatment of common respiratory illnesses, consistent with state scope-of-practice laws. Health Subcommittee Chairman Moran Griffith (R-VA-9) and Rep. Troy Carter asked about the impact of allowing pharmacists to test and treat certain illnesses. Dr. Pudlo explained that pharmacists help triage patients into the health care system when other providers are unavailable and that the bill would allow pharmacists to provide services in Medicare that they already provide under other coverage.

Full Committee Chairman Guthrie and Health Subcommittee Vice Chair Harshbarger asked Dr. Pudlo how this care could reduce costs. He explained that pharmacists prevent patients from going to more expensive settings like emergency departments, which reduces the costs Medicare must cover.

Rep. Nanette Barragan (D-CA-44) questioned how community pharmacists can help address vaccination disparities among Black and Latino seniors on Medicare. Dr. Pudlo stated that access alone does not reduce disparities, but trust built over years of patient relationships creates conditions for preventive conversations and education.

H.R. 1254, Rural Obstetrics Readiness Act

This legislation would create an obstetric readiness training program for rural facilities without dedicated labor and delivery units, fund federal equipment grants, and establish a pilot teleconsultation program connecting OB-GYNs with clinicians in rural facilities facing obstetrics emergencies.

Health Subcommittee Chairman Guthrie asked Dr. Attwood how to build the maternal health workforce pipeline in rural communities beyond payment reform. She described the benefits of cross-specialty obstetric emergency training programs that this bill would formalize and scale nationally.

Health Subcommittee Acting Ranking Member Lizzie Fletcher (D-TX-7) questioned how maternity ward closures impact patient access to care and maternal mortality outcomes. Dr. Attwood said closures mean longer distances, delayed care, and compounding safety risks, noting that more than 50 maternity wards have closed or announced closure plans since passage of the reconciliation bill. Rep. Mike Kelly (R-PA-16) followed up asking how training and equipment can bridge the gap caused by closures. Dr. Attwood explained that working directly with trainees is the first step, but it is equally important to ensure they have the tools they need to keep the mom and baby safe.

Rep. Cliff Bentz (R-OR-2) pressed Dr. Attwood on liability as a barrier for clinicians managing obstetric emergencies without dedicated OB staff and for teleconsultation. She acknowledged the financial pressures and stated that stabilizing Medicare physician payment rates, which inform Medicaid rates covering about 40% of births nationwide, would be one necessary piece. Dr. Attwood further explained that teleconsultation models already exist in other specialties, which she argued demonstrates they can function effectively with the right relationships and training programs in place.

H.R. 6130, Alzheimer’s Screening and Prevention (ASAP) Act

This bill would create a Medicare coverage pathway for FDA-approved blood-based biomarker tests for early detection of Alzheimer’s disease and related dementias.

Health Subcommittee Chairman Griffith and Rep. Balderson asked how the bill would improve care and how it would provide cost savings. Dr. Andrews stressed the importance of early diagnosis in both improving care and reducing costs.

Rep. Paul Tonko (D-NY-20) asked Dr. Andrews about the challenges physicians face in diagnosing and managing Alzheimer’s and whether blood-based biomarker tests would help in earlier diagnoses. She explained that these tests produce probabilities rather than definitive answers, and that walking a patient’s family through those results takes time currently not covered by fee-for-service. She noted the hybrid payment pilot in the Patients First Act would help address that gap.

H.R. XXXX, Healthcare Cybersecurity and Resiliency Act of 2026

This legislation, which is a discussion draft, would expand cybersecurity resources across the health care system and require providers and plans to disclose the number of individuals affected when notifying them of a data breach.

Full Committee Chairman Guthrie and Rep. Balderson asked Mr. Garcia how to enhance cybersecurity capacity without creating duplication or excess burden. He explained that more regulation of the health care sector itself is not the answer, but that the focus needs to be on third-party technology vendors that supply hospitals and systems and are not held to the same standards. He added that funding for workforce development and technology, combined with mutual assistance across rural communities, would be most impactful.

H.R. 9908, Rural Hospital Cybersecurity Enhancement Act

This bill would direct the Department of Health Human Services (HHS) to develop a comprehensive rural hospital cybersecurity workforce strategy and expand training resources for rural providers.

Rep. Houchin asked how the bill would improve coordination between HHS, the Department of Homeland Security (DHS), and the health care sector and what gaps in the current federal response it would address. Mr. Garcia pointed to ongoing private-sector work in mutual assistance and partnership.

 H.R. 1521, Dental Optometric Care (DOC) Access Act

This legislation would prohibit private insurance companies from setting rates for certain dental and vision services for which the plan does not pay a substantial amount.

Rep. Buddy Carter (R-GA-1) asked about the consequences of independent practice consolidation on patient care, using vision management as an example. Dr. Alam explained that rural practices close first, resulting in longer wait times and advanced disease at diagnosis.

H.R. 8163, Provider Reimbursement Stability Act

This legislation would update the underlying structure of the Physician Fee Schedule to improve predictability for physician payments.

H.R. 1189, National Plan for Epilepsy Act

This bill would create a national coordinated plan for epilepsy research, care, and data collection across federal agencies.

H.R. 1616, Promoting Access to Diabetic Shoes Act

This legislation would remove administrative barriers for seniors accessing therapeutic diabetic shoes when their care is managed by a nurse practitioner or physician assistant.

H.R. 5737, Radiology Outpatient Ordering Transmission (ROOT) Act

This bill would fix the paused Appropriate Use Criteria program to support appropriate imaging utilization at the point of care.

H.R. 8622, Medicare Physician Data-Driven Performance System Act

This legislation would create a new outcomes-based Medicare physician payment model focused on value over volume.

H.R. 7863, Promoting Fairness for Medicare Providers Act

This bill would align Medicare reimbursement for a narrow group of procedures involving high-cost medical supplies, paying physician offices at 90% of what Medicare would pay an ambulatory surgical center for the same service.

H.R. 4331, Access to Claims Data Act

This legislation would require HHS to establish a process allowing qualified clinical data registries to access Medicare claims data to support research and quality improvement.

H.R. 7905, Diabetes Foot Health Access and Modernization Act

This bill would recognize podiatric physicians under Medicaid and clarify Medicare documentation requirements for therapeutic shoes for people with diabetes.

H.R. 6214, Kidney Care Access Protection Act

This legislation would protect Medicare beneficiaries with kidney disease from losing coverage for dialysis and other treatments under employer-sponsored health plans.

H.R. 8319, KIDNEY Remote Monitoring Act

This bill would expand Medicare coverage of remote monitoring services for patients with kidney disease to improve year-round access to care.

On September 14, 2026, the House Judiciary Subcommittee on the Administrative State, Regulatory Reform, and Antitrust held a field hearing to examine fraud and competition within the health care system. The hearing focused on combating alleged fraud in public health programs, addressing concerns about hospital consolidation, and dealing with health care workforce shortages. Only Republican members attended, so the hearing focused on the failures of Democratic initiatives such as the Affordable Care Act (ACA) and Medicaid expansion.

OPENING STATEMENTS

• Subcommittee Chair Scott Fitzgerald (R-WI-5)

WITNESS TESTIMONY

• Dr. Brian Miller, Associate Professor of Medicine, Johns Hopkins University; Vice Chairman, North Carolina State Health Plan – Testimony
• Dr. Brian Blase, PhD, President, Paragon Health Institute – Testimony
• Katherine Martin, Vice President of Health Affairs, University of North Carolina System – Testimony

MEMBER DISCUSSION

Health Care Fraud

Republicans who attended the hearing focused much of their discussion on concerns about alleged fraud in public health care programs. Representative Harriet Hageman (R-WY-At Large) highlighted recent Department of Justice enforcement actions against alleged health care fraud in states like California and Minnesota. Rep. Hageman asked the witnesses about the scope of fraud in the health care system. Dr. Blase responded that it is significant, and that states are incentivized to overlook fraud in public programs because they must return recovered funds to the federal government. When asked how Congress could shift toward more preventive anti-fraud measures, Dr. Blase recommended establishing a minimum premium payment for ACA plans and auditing federal Medicaid payments to states.

Other members raised questions and concerns about alleged fraudulent ACA enrollment and the witness’s views on policies related to expanded federal reimbursement tied to Medicaid expansion. For example, Subcommittee Chair Scott Fitzgerald (R-WI-5) asked Dr. Miller about his view on reported fraud within the ACA market. Dr. Miller said stronger eligibility verification and routine oversight of providers and brokers are needed to combat fraud in both ACA and Medicaid markets. Members such as Representative Russell Fry (R-SC-7) criticized the higher federal matching rate paid for the Medicaid expansion population as being unfair to the traditional Medicaid population. Dr. Blase agreed and said Congress should eliminate that higher rate. In response to a question from Rep. Hageman about recommendations that could be made through the congressional reconciliation process, Dr. Blase said Congress could reduce the higher reimbursement rate for the expansion population and make changes to the ACA marketplace to combat fraud.

Hospital Consolidation

Members and witnesses broadly agreed that whatever benefits consolidation may offer are generally outweighed in the health care sector by negative impacts on affordability, quality, and access. Members such as Representative Bob Onder (R-MO-3) focused their concerns on hospital mergers. Rep. Onder identified several policies he believes drive consolidation, including the expansion of the 340B drug program, hospitals being reimbursed more than other providers for the same services, hospitals being reimbursed at a higher rate than physicians, restrictions on physician-owned hospitals, certificate of need laws, the nonprofit exemption under the Stark law, and the ACA medical loss ratio. Other members also expressed opposition to certificate of need laws, restrictions on physician-owned hospitals, and the ACA medical loss ratio. Representative Chuck Edwards (R-NC-11) asked what tools exist to hold hospital systems accountable, short of removing them from Medicare. Dr. Miller agreed that the Centers for Medicare and Medicaid Services should have more enforcement tools but emphasized that the priority should be allowing more competition.

Health Care Workforce Shortages

Rep. Mark Harris (R-NC) raised concerns about nursing shortages, saying that North Carolina currently faces one of the largest nursing shortages in the country. He also highlighted the state’s $40 million allocation to address this shortage. Rep. Fitzgerald asked the witnesses what challenges providers face in filling residency slots, and Ms. Martin explained that graduate medical education slots increasingly flow to large, consolidated hospital systems rather than to smaller and rural providers. Rep. Edwards added that physician distribution must be addressed so that rural districts are not left behind as systems consolidate.

Other Topics

• Rep. Hageman brought up the Rural Health Transformation Program (RHTP) and asked whether the witnesses advise states on it. Dr. Blase confirmed that Paragon Health Institute has a state reform initiative and that Paragon would be happy to advise states on the RHTP.
• Members, such as Rep. Tim Moore (R-NC-14), raised concerns about pharmacy benefit manager concentration and its effect on prescription drug prices. Dr. Blase expressed support for increased transparency, arguing that the PBM sector has limited transparency.

On September 3 and 4, 2026, the Medicare Payment Advisory Commission (MedPAC) met for its first public meeting of the 2026-2027 cycle. During the meeting, Commissioners discussed several topics, including the workplan on ambulatory surgical centers (ASCs) for this cycle, the use of post-acute care (PAC) services by beneficiaries in fee-for-service (FFS) Medicare and Medicare Advantage (MA), and the accuracy of MA risk adjustment at the plan level. MedPAC staff shared that they are planning to discuss all of these topics during the Spring 2027 meetings as well, and that the June 2027 Report to Congress will likely include a chapter on MA risk adjustment at the plan level.

ASC WORKPLAN

The session began with MedPAC staff providing an overview of current knowledge and prior MedPAC work on ASCs, highlighting recent growth in ASC use and changes to the ASC-covered procedures list. Next, staff summarized their proposed workplan analysis, which aims to understand factors associated with geographic differences in ASC supply and assess the impact of ASC growth on FFS surgical volume.

Commissioners had a few clarifying questions. One Commissioner suggested capturing ASC size in both the number of operating rooms and the number of medical specialties practicing, which staff clarified they planned to do. Another Commissioner questioned why MA data will not be included in the analysis. Staff responded that while they hope to incorporate MA data in the future, they are currently unable to do so. Lastly, when asked whether there was a clear relationship in Medicare reimbursement for a procedure performed in an ASC versus a hospital outpatient department (HOPD), staff responded that, generally, ASCs are reimbursed at about 60% of HOPD reimbursement.

Some Commissioners had suggestions on the planned site visits and informational interviews laid out in the workplan. One suggestion was to ask ASC professionals about their plans to start offering additional procedures as they move onto the ASC covered procedures list. Another suggestion was to also interview rural providers about their barriers to starting an ASC.

Commissioners also had comments on additional analyses they would appreciate seeing. Those included analyses on the following:

• Potential decreased waiting time for procedures
• The change in case mix for ASCs and HOPDs
• The quality of procedures being performed in ASCs, more specifically if there is an increase in ER visits or hospital readmittance after a procedure in an ASC
• How ASCs may both increase access to procedures and increase rates of inappropriate care

Overall, Commissioners expressed excitement about the proposed workplan and are interested in understanding how ASCs have changed care delivery. MedPAC plans to revist it the work during its January 2027 public meeting for an interim update.

EXAMINING PAC BY BENEFICIARIES IN FFS MEDICARE AND MA

The session began with MedPAC staff providing a descriptive analysis of PAC use across FFS Medicare and MA in 2023, emphasizing that this is preliminary data and that results adjusted for beneficiary characteristics will be presented in spring 2027. Staff found that MA beneficiaries had slightly fewer Acute-Care Hospital (ACH) and PAC stays, and they were less likely to receive PAC services after hospitalization but typically had longer ACH stays. Staff also found that FFS Medicare beneficiaries were more likely to utilize multiple facilities and have longer stays.

Commissioners had questions and comments about the material presented. One Commissioner asked about other aspects of payment structure. Staff responded that they are currently looking into this and will share more in the spring 2027 meetings. However, staff did say they found that MA plans use a mix of strategies including per-visit and per-stay. Some Commissioners raised questions about what happens to beneficiaries when they are waiting for appeal on payment denials, specifically who is responsible for paying for the care, who is in charge of the care, and is there a window of time for appeals? Staff said they would look into these questions.

Multiple Commissioners discussed site-neutral payments, with differing views on its effectiveness. One Commissioner suggested including site-neutral as a variable in determining how MA plans deviate from FFS and what it would look like to move towards that model. A number of Commissioners raised concerns about this idea, stating that beneficiaries receive various levels of care in each facility and they have different incentives. For example, home-health is inclined to focus on collective health and ensure the beneficiary does not end up in the hospital or a facility; however, other PAC facilities typically focus on restoring functionality and discharging to the home. MedPAC staff expressed appreciation for this conversation but reiterated that they are looking more broadly at utilization of care, not specifically payment policies.

Commissioners also offered the following suggestions for additional analysis by MedPAC staff:

• Stratify data by dual-enrolled and non-dual-enrolled beneficiaries
• Examine the data by conditions to get better view of level of care provided
• Expand on beneficiaries admitted to PAC facilities from their community versus from the hospital
• Look into overall cost and length of care considering hospital stay, specifically if a longer hospital stay leads to shorter or longer PAC facility stay
• Conduct interviews with both hospital discharge planners and beneficiaries who were denied care

ACCURACY OF MA RISK ADJUSTMENT AT THE PLAN LEVEL

MedPAC staff began this session by sharing that the presentation is an expansion on the conversation Commissioners had at their March 2026 meeting, where they discussed their concerns with using FFS data to calibrate the risk model due to MA’s coding pattern and utilization differences. From their analysis, staff found current risk adjustment narrows the distribution of plan bids, indicating risk scores account for some variation. Staff then discussed the challenges with the current system, the policies that could improve accuracy, and plans for future work. They shared that there would be another session focused on risk adjustment in spring 2027, and that a chapter on the topic would likely be included in the June 2027 Report to Congress.

Commissioners had numerous comments on the policies proposed to improve the risk model’s accuracy and on MedPAC’s plans for future work. Commissioners overall agreed that the risk model should reflect MA characteristics to better predict annual spending; however, some voiced concern about the unintended consequences of recalibrating, specifically how plans currently invest excess revenue into supplemental benefits and lower premiums. A number of Commissioners expressed support for starting reforms with combating model input challenges, as they would improve accuracy more quickly. Commissioners encouraged greater use of objective utilization markers that are already available, including inpatient admissions and nursing home stays, to improve accuracy. A number of Commissioners also requested a high-cost risk pool for infrequent outliers to prevent skewed results and better assess their costs and needs. Other Commissioners also raised concerns about the prioritization of transparency and simplicity over accuracy, explaining the need for more complexity to better predict costs and provide better care for beneficiaries. Some Commissioners voiced skepticism about machine learning, at least until data quality issues are resolved, while others believed machine learning could improve the data quality concerns.

PUBLIC COMMENTS

At the conclusion of the session, MedPAC opened the floor for public comment. Shannon Woo, Director of Payment Policy at the American Hospital Association (AHA), flagged that prior authorization and the lack of quality niche providers already limit access to care for beneficiaries.

On August 4, 2026, the Senate Finance Health Care Subcommittee held a hearing on building a resilient health care future with biotechnology. The hearing centered around protecting and advancing U.S. biotechnology infrastructure, specifically the creation of novel and microbial drugs, to ensure the U.S. remains ahead of China. Members questioned witnesses about reliance on key starting materials, supporting the full ecosystem in which microbial drugs are created, and affordability of the drugs once they make it to market. There was bipartisan concern for ensuring affordability and innovation work together.

OPENING STATEMENTS

• Senate Finance Health Subcommittee Chairman Todd Young (R-IN)
• Senate Finance Health Subcommittee Ranking Member Maggie Hassan (D-NH)

WITNESS TESTIMONY

• Alan Palkowitz, Ph.D., President and CEO, Indiana Biosciences Research Institute (IBRI) – Testimony
• Michelle Rozo, Ph.D., Vice Chair, National Security Commission on Emerging Biotechnology – Testimony
• Vera Luther, MD, MS, Section Chief of Infectious Disease and International Health, Dartmouth Hitchcock Medical Center, Dartmouth Health – Testimony
• Kevin Outterson, JD, LL.M., Austin B. Fletcher Professor of Law, and Executive Director and Principal Investigator of Combating Antibiotic-Resistant Bacteria Biopharmaceutical Accelerator (CARB-X), Boston University – Testimony

MEMBER DISCUSSION

Key Starting Materials

Members voiced concern with the U.S. reliance on China for the key starting materials needed to create antibiotics and microbial drugs. Senators James Lankford (R-OK) and Roger Marshall (R-KS) asked what could be done to bring the full supply chain back to the U.S. or its allies. Dr. Palkowitz explained that the U.S. needs to invest in research to make key starting materials less harmful to the environment and to drive innovation in manufacturing. Dr. Rozo stated that push and pull mechanisms, such as advanced drive innovation in manufacturing. Dr. Rozo stated that push and pull mechanisms, such as advanced market commitments and offtake agreements, can support innovation and help lower drug prices for purchasers. She also recommended funding new ways to make those chemicals through innovative manufacturing. Similarly, Mr. Outterson explained that the government needs to give companies more money to require them to produce their drugs in the U.S. to offset the costs.

Senator Mark Warner (D-VA) asked specifically what kind of investments the private sector is making to reduce dependence on China for key starting materials. Dr. Rozo shared that the biotechnology environment is hard to survive in because it takes too long for companies to see return on investments. She recommended independent investment funds to help reduce risk through strategic patient capital.

Supporting Innovation

Members from both parties spent time discussing how to best support the biotechnology industry as they create new drugs. Subcommittee Ranking Member Hassan (D-NH) asked if targeted tax incentives would help the smaller companies get started. Dr. Palkowitz agreed with her that the biggest challenge is collecting the initial financial backing and supported the tax incentives as long as it is done in scale to support the whole production pipeline. Senator Hassan then expressed support for recognizing biotechnology as critical infrastructure and asked for input on how this would strengthen national security. Dr. Rozo supported this idea saying it would enable threat information sharing and federal response in a crisis. Senator Bill Cassidy (R-LA) suggested Medicare paying an extra bit of money to the biotech companies so the medications will always be accessible rather than paying when they are needed. Dr. Luther said a subscription model is an excellent point and that this has already been recommended in the PASTEUR Act, which would allow for companies to get paid for the value they provide rather than the volume the drug is consumed. Mr. Outterson further explained that the biotech companies have simply responded to demand for the cheapest option by offshoring, so the government would likely have to pay a small premium to ensure the full supply chain is brought back to the U.S.

Subcommittee Chair Young (R-IN) focused on addressing the funding and research gap between early discovery and clinical trials. Dr. Palkowitz explained that the U.S. needs an ecosystem to work together to ensure science is ready to move forward and can be translated from the science to patient care. Full Committee Ranking Member Ron Wyden (D-OR) specifically asked how to direct resources towards accelerators to avoid the aforementioned research gap. Mr. Outterson stated that public-private partnerships are the way to bring innovations to patients and investments in innovative technology will also move the needle.

National Security Commission for Emerging Biotechnology Report

The National Security Commission for Emerging Biotechnology (NSCEB) released a report in April 2025 outlining a set of recommendations to “both advance our progress and slow that of our strategic adversaries, particularly China, in the race for biotechnology supremacy.” The Commission recommended mobilizing the private sector, attracting private capital, creating public-private partnerships, and investing in the talent pipeline. Subcommittee Chair Young (R-IN), who served as the Chair of the NSCEB, asked exactly which recommendations from the report that China seems to have enacted. Dr. Rozo, who served as Vice Chair of the Commission, explained that they have adopted strategic investments, industrial biomanufacturing and infrastructure to support those investments, and regulatory reform making it easier for products to move through their system. Senator Catherine Cortez-Masto (D-NV) followed up asking what we do in response to China taking our recommendations. Dr. Rozo stated that the Commission laid out an agenda to run faster and simultaneously stop national security concerns, but it is only impactful if it is public so there are risks.