Policy Digest — March 23, 2026

Weekly Spotlight

The Trump administration’s use of Medicaid fraud enforcement as a political and policy tool escalated this week, with a congressional hearing exposing its partisan fault lines even as the administration extended its investigative reach to Florida—the first Republican-led state to receive a formal inquiry.

The mechanics of the crackdown have been visible for months. CMS Deputy Administrator Kim Brandt testified before the House Energy and Commerce oversight subcommittee that the agency has shifted from a “pay and chase” model to intercepting suspicious payments before disbursement, using roughly 280 machine-learning models to flag billing anomalies. The agency suspended $5.7 billion in suspected fraudulent Medicare payments in 2025 and revoked more than 5,500 providers’ billing privileges. The same day, President Trump signed an executive order creating a national fraud task force led by Vice President Vance and FTC Chairman Andrew Ferguson, designed to coordinate enforcement across HHS, Treasury, and DOJ.

But the accompanying congressional hearing quickly revealed how deeply political the effort has become. Republicans argued fraud investigations are not politically motivated, pointing to the Florida inquiry as proof. Democrats countered that of 12 congressional fraud probe letters sent to states, 10 went to states with Democratic governors. “It is time for Republicans to drop the pretense that this is all about fraud,” said Rep. Frank Pallone (D-NJ). “It is about covering up for their terrible health policies.” Chair Brett Guthrie (R-KY) responded that it was “frustrating this can’t be bipartisan.”

Hours before the hearing, CMS Administrator Oz had posted on social media announcing a formal inquiry into Florida—demanding 30 days of documentation on provider screening, DME oversight, telemedicine fraud, and referral processes, framing the state as having “an environment of pervasive fraud” extending beyond previously identified Medicare schemes. Florida Attorney General James Uthmeier publicly welcomed the inquiry.

A KFF Health News investigation this week traced how the Minnesota model is being developed into a multistate playbook. The administration has threatened to withhold over $2 billion in future Medicaid payments to Minnesota and already deferred $260 million, both of which Minnesota is fighting in court. Oz said the techniques “could be applied to other states” and launched social media campaigns alleging fraud in California, Florida, Maine, and New York.

What the administration frames as accountability, Medicaid experts increasingly describe as blunt-force enforcement that risks real patient harm. Georgetown’s Andy Schneider called withholding $2 billion from Minnesota “the nuclear option,” noting no clear relationship between that action and actually reducing fraud in a state that had already implemented significant controls. One Minnesota man died after losing in-home care services during the crackdown. Medicaid fraud prosecutions in the state have actually stalled, as the U.S. attorney’s office grapples with staff losses and an immigration caseload surge. The amount of money Minnesota stands to lose is equivalent to roughly two-thirds of its rainy-day fund. “People will die,” said Sumukha Terakanambi, a disability policy advocate with Duchenne muscular dystrophy. “People will lose critical supports and will no longer be able to participate in their community the way they want to.”

The Republican-aligned Paragon Health Institute has published a brief explicitly calling for similar enforcement actions nationwide—suggesting what began as a fraud enforcement campaign is being developed into a broader model for reshaping Medicaid oversight itself.

Tags: #ALL

Centers for Medicare and Medicaid Services (CMS)

ACA Subsidy Expiration Is Hitting Hard: 80% of Returning Enrollees Face Higher Costs, Middle-Aged Adults Delaying Care Until Medicare

A KFF follow-up survey of 1,117 adults who held ACA Marketplace coverage in 2025 found that 80% of those who re-enrolled report higher costs in 2026—including 51% who say costs are “a lot higher”—following the expiration of enhanced premium tax credits at year-end 2025. A majority (55%) are cutting back on food or household expenses to afford coverage, 17% are not confident they can continue paying premiums through the year, and 9% of 2025 enrollees are now uninsured. Three-quarters of registered voters say health care costs will influence their midterm vote, with Democrats more than twice as likely as Republicans to say it will have a major impact. The political stakes are sharpest among adults ages 50-64, who experienced some of the steepest increases and are now delaying medical care—including colonoscopies and CT scans—until they qualify for Medicare at 65. ACA rules allow insurers to charge older adults up to three times the premiums of younger enrollees, and health policy experts warn that deferred care will generate significantly higher Medicare costs as conditions worsen untreated.
Source(s):
Cost Concerns and Coverage Changes: A Follow-Up Survey of ACA Marketplace Enrollees
Many ACA Customers Are Paying Higher Premiums. Most Blame Trump and Republicans, Poll Finds.
Rising Health Costs Push Some Middle-Aged Adults To Skip the Doc Until Medicare
Tags: #PAYER #PATIENT #ALL

Medicare Advantage Roundup

Medicare Advantage faced scrutiny and a significant policy trial balloon this week.

• KFF: Nearly All Medicare Advantage Beneficiaries in Terminated Plans Had Alternative Coverage in 2026
• CMS Medicare Director Klomp said his team is considering automatically enrolling new Medicare beneficiaries into Medicare Advantage plans or ACOs rather than traditional fee-for-service Medicare—an idea that appeared in Project 2025 and would be a significant win for the MA insurance industry, which has faced payment scrutiny and enrollment declines. Sources: Automatic enrollment in Medicare Advantage plans under consideration, top Trump health official says

Tags: #PAYER #PATIENT #ALL

Prior Authorization Roundup

Prior authorization remained a flashpoint this week, with new data on implementation shortfalls, a high-profile call to question whether the system is worth keeping, and reports that some practices are beginning to bill patients for the administrative burden.

• Are the Tradeoffs from Prior Authorization Worth It?
• Prior Authorization Interoperability Rule Implementation Lagging for Providers as 2027 Deadline Approaches
• Should Doctors Charge Patients for Prior Authorization? Some Practices Are Starting To

Tags: #PAYER #PROVIDER #PATIENT

No Surprises Act’s Independent Dispute Resolution Process Being Gamed, Reform Urged

An op-ed by the ERISA Industry Committee and PIRG argues the No Surprises Act’s independent dispute resolution (IDR) process has become a profit mechanism for a small number of out-of-network provider groups: the top three filers initiated 44% of all IDR cases in the first half of 2024 and prevailed 83-88% of the time at payouts exceeding four times the in-network rate, with IDR-related costs reaching $5 billion from 2022-2024. Nearly 40% of submitted cases were ineligible under the NSA, yet arbitrators allowed more than half to proceed. Sens. Cassidy and Hassan have backed the Trump administration’s reform efforts; the authors call for clearer arbitrator guidance, transparency requirements, and penalties for system gaming.
Source(s): Opinion: Congress must fix the No Surprises Act before it bankrupts patients and employers
Tags: #PAYER #HOSPITAL #PROVIDER

Trump Administration’s EHR Deregulation Proposal Raises Provider Burden and Patient Safety Concerns

A Trump administration proposed rule would remove 34 certification criteria from the ONC Health IT Certification Program, with the stated goal of reducing regulatory burden on health IT developers. The Medical Group Management Association and American Medical Group Association warned that removing requirements—including “real-world testing” conditions—could shift compliance costs to physician practices and create patient safety gaps if certified products fail in live clinical settings. HIMSS raised a further concern that removing certain FHIR-based criteria could inadvertently penalize providers under MIPS if their EHR vendors stop supporting required functionalities.
Source(s): Trump Team’s Health IT Plan Could Hurt Physician Practices, Health Groups Warn
Tags: #PROVIDER #HOSPITAL

Payers and Hospitals Jointly Oppose CMS Proposal to Allow Non-Network Plans on ACA Exchanges

In a rare cross-sector coalition, leading payer and hospital associations jointly rebuked a CMS proposal to allow non-network health plans on ACA exchanges for plan year 2027, arguing the move would undermine consumer protections and create confusion for enrollees seeking in-network care.
Source(s): Payers, hospitals pan CMS’ plan to bring non-network plans to ACA exchanges
Tags: #PAYER #HOSPITAL #PATIENT

MGMA: Only 2 of Nearly 40 CMMI Models Have Succeeded, Complicating 2030 Value-Based Care Goal

The Medical Group Management Association noted that CMMI has tested nearly 40 alternative payment models, of which only two have been deemed successful—raising significant questions about the feasibility of CMS’s goal to transition all Medicare and Medicaid payments to value-based arrangements by 2030.
Source(s): MGMA outlines path and pitfalls in CMS 2030 value-based care push
Tags: #PROVIDER #PAYER #HOSPITAL

MedPAC Annual Report: Hospital Payments Adequate for 2027, But Safety-Net Targeting Needs Reform

MedPAC’s annual report to Congress found Medicare payments to hospitals broadly adequate and recommends 2027 updates follow the statutory formula —a projected 2.3% increase—without additional adjustment. All-payer hospital operating margins improved from 5.2% to 6.5% between 2023 and 2024. The overall Medicare margin remains negative at -12.1% for 2024, but MedPAC found the figure for efficient hospitals was -1%, not warranting extra payment. MedPAC renewed its push to replace DSH and uncompensated care payments with a new Medicare Safety Net Index targeting hospitals serving high shares of dual-eligible patients, and continued to advocate for expanding site-neutral payment policy to on-campus outpatient departments.
Source(s): MedPAC says hospital payments are sufficient, urges better safety-net targeting
Tags: #HOSPITAL #PAYER #PROVIDER

Unannounced Medicare Drug Negotiation Proposed Rule Surfaces at OMB

A proposed rule related to the Medicare Drug Price Negotiation Program quietly appeared at the Office of Management and Budget for review at the end of February without appearing in CMS’s prior regulatory agenda. OMB lists the rule as economically significant but has provided no further details; the agency has not yet held meetings with outside stakeholders. The rule’s listing notes it has no international implications, suggesting it is not directly tied to the Most Favored Nation drug pricing agenda. CMS separately confirmed on March 13 that all manufacturers of drugs selected for the third round of negotiations have agreed to participate.
Source(s): Unannounced Medicare Drug Negotiation Rule Hits OMB Review
Tags: #DRUG #PAYER

Food and Drug Administration (FDA)

FDA Approves JenaValve Trilogy: First Transcatheter Device for Severe Aortic Regurgitation

The FDA granted premarket approval to JenaValve Technology’s Trilogy transcatheter heart valve system, making it the first and only transcatheter device approved in the U.S. for patients with symptomatic, severe aortic regurgitation (AR) at high or greater risk for surgical valve replacement. Unlike conventional TAVR valves designed for aortic stenosis, Trilogy uses proprietary locator technology to attach directly to the native aortic leaflets without relying on annular calcification for anchoring. Approval was supported by the ALIGN-AR pivotal trial. The approval comes two months after Edwards Lifesciences abandoned its $1.2 billion acquisition of JenaValve following an FTC antitrust injunction; Edwards continues development of its competing J-Valve system for AR.
Source(s):
JenaValve’s Trilogy valve secures FDA’s 1st approval in aortic regurgitation
JenaValve snags FDA approval in aortic regurgitation
First TAVR System Approved for Severe Aortic Regurgitation
JenaValve Gets FDA Nod for Trilogy Transcatheter Heart Valve (THV) to Treat Aortic Regurgitation
JenaValve wins FDA nod for Trilogy heart valve system
Tags: #DEVICE #PROVIDER #PATIENT

FDA Direction Roundup

The FDA’s operating direction drew both institutional attention and pointed criticism this week.

• FDA Schedules June Public Hearing on Commissioner’s National Priority Voucher Pilot Program
• Former FDA Commissioner Califf: Political Influence at FDA Is ‘a Serious Problem’

Tags: #DRUG #DEVICE #ALL

Department of Health and Human Services (HHS)

Trump Plans Appeal of Vaccine Ruling as States and Clinicians Face Ongoing Confusion

The Trump administration is planning to appeal the federal court ruling that blocked HHS Secretary Kennedy’s vaccine policy overhaul, and experts warn relief for health groups may be short-lived if an appeals court acts quickly. The ruling has created immediate unintended consequences: it may have removed free access to an RSV monoclonal antibody for infants, since that recommendation was authorized by Kennedy’s reconstituted ACIP; as of Tuesday, the CDC website still reflected Kennedy’s changes rather than the reinstated pre-June 2025 schedule; and an ACIP member whose appointment was invalidated by the ruling publicly declared—then retracted—a claim that the panel was being disbanded. The 20 states that still follow current CDC guidelines are hesitant to act on the ruling until the agency formally restores the previous schedule. Separately, Sen. Bernie Sanders pressed HELP Committee Chair Bill Cassidy to hold a hearing on Kennedy’s vaccine misinformation campaign, noting that Kennedy had also overhauled the Interagency Autism Coordinating Committee with members who support the debunked vaccine-autism link.
Source(s):
Federal court blocks RFK Jr.’s moves to upend US vaccine policy
Federal judge stalls health secretary RFK Jr.’s overhaul of vaccine policy
Health Groups Hailed a Vaccine Ruling, but Their Relief May Be Short-Lived
ACIP Member’s Miscommunication on Vaccine Panel’s Future Adds to Confusion After Court Ruling
Tags: #ALL

Bhattacharya Promises Full NIH Budget Spending as Grants Remain 74% Below Historical Averages

NIH Director Jay Bhattacharya testified before the House Appropriations Subcommittee on Labor, HHS, and Education on Tuesday, promising the agency will spend its full $48.7 billion 2026 budget by year-end—despite awarding 74% fewer competitive new grants than the prior four-year average at the same point in the fiscal year, with monetary value of awards running 62% below historical averages. Bhattacharya distanced himself from last year’s DOGE-driven upheaval, calling it a “learning experience.” Members from both parties expressed satisfaction with his management and warned the White House not to seek another round of NIH cuts in the FY2027 budget request.
Source(s):
Despite boosted funding, NIH still slow to award grants: analysis
NIH will spend its full budget this year, agency director promises House appropriators
NIH Director Sails Through House Appropriations Oversight Hearing
Tags: #ALL

White House Asserts Control Over HHS, Elevates Medicare Chief Klomp as Kennedy’s Deputy

The White House moved to assert tighter operational control over HHS, elevating CMS Medicare chief Chris Klomp to serve as Kennedy’s deputy with broad authority to steer the department toward drug affordability and nutrition priorities ahead of the 2026 midterms, according to the Wall Street Journal. The move followed frustration with disorganization and messaging missteps at HHS, including a delayed response to the Texas measles outbreak and backlash over mental health grant cuts. HHS Deputy Secretary Jim O’Neill was removed from his Senate-confirmed role and FDA oversight was reassigned as part of the reshuffle.
Source(s): White House moves to temper HHS before midterms: WSJ
Tags: #ALL

FDA and NIH Launch Coordinated Push to Reduce Animal Testing, NIH Commits $150M

HHS announced a coordinated initiative to reduce reliance on animal testing in drug development. The FDA released draft guidance to help drug companies explore non-animal methods for assessing safety and efficacy, and the NIH committed more than $150 million in the first round of awards to institutions developing research methods that better simulate human biology. The FDA announced it would phase out animal testing requirements for monoclonal antibodies in April 2025; the NIH subsequently said it would stop funding projects relying solely on animal models.
Source(s):
FDA and NIH announce more initiatives to reduce animal testing in drug development
NIH Commits $150M To Human-Based Research In Push To Reduce Animal Testing
Tags: #DRUG #DEVICE #PROVIDER

Federal Workforce Morale at Historic Low; HHS Near Bottom With 2.6% Reporting High Motivation

A Partnership for Public Service survey of more than 10,000 federal workers found government-wide employee engagement at 32 out of 100, with 58% saying engagement worsened since 2024. HHS, previously among the top three large agencies for engagement, fell to third-last at 20.4 out of 100; just 2.6% of HHS respondents said political leaders generated high motivation, and only 22.5% of all respondents felt confident they could report a legal violation without retaliation. The Partnership’s CEO described the workforce as “fundamentally traumatized.” OPM had canceled the statutory 2025 Federal Employee Viewpoint Survey, prompting the Partnership to conduct its own.
Source(s): Survey of 11,000 feds underscores ‘layer cake of trauma’
Tags: #ALL

HHS/CDC Leadership Roundup

HHS leadership dynamics continued to evolve this week as both the CDC director vacancy and MAHA-aligned regulatory moves drew attention.

• Klomp Named to Lead CDC Director Search as Administration Prioritizes Permanent Appointment
• Kennedy’s Latest MAHA-Approved Plan Could Supercharge Peptide Boom
• RFK Jr.’s Food-as-Medicine Claims Overstate Evidence on Diet and Psychiatric Disorders, Experts Warn

Tags: #PATIENT #PROVIDER #ALL

Heard on the Hill

TrumpRx Reality Check: Reuters Finds One-Third of Drugs Cheaper in UK, Klomp Acknowledges Narrow Scope

The TrumpRx drug discount portal expanded to 54 listed drugs this week, but new reporting revealed significant limitations. A Reuters comparison of TrumpRx prices against UK National Health Service pharmacy payouts found that roughly one-third of listed drugs are actually cheaper in the UK—including Pfizer’s Xeljanz, AstraZeneca’s Farxiga, and multiple GSK inhalers, some between 67% and 82% cheaper abroad. CMS Medicare Director Chris Klomp offered a notably measured assessment at STAT’s Breakthrough Summit East, saying TrumpRx “was never meant for most” Americans—explicitly noting it is a cash-pay tool, not applicable to the 170 million Americans with commercial insurance or the 68 million on Medicare. The White House simultaneously intensified pressure on Congress to codify a Most Favored Nation drug pricing policy, but Republican lawmakers remain cool to the idea, characterizing it as government overreach; CMS expects to begin negotiating additional MFN deals starting in April.
Source(s):
TrumpRx List Grows To 54 Drugs, Many Nearing End Of Exclusivity
TrumpRx lists many medicines at prices higher than paid in UK
White House digs in on ‘most-favored nation’ drug pricing despite Congress’ cool reception
Trump’s Medicare director seeks to rein in expectations for TrumpRx
Tags: #DRUG #PAYER #PATIENT

Senate Democrats Launch Bold Health Insurance Reform Framework Targeting Big Insurance Ahead of Midterms

Senate Finance Committee Ranking Member Ron Wyden (D-OR) and 11 Senate Democrats released a framework outlining their priorities for overhauling U.S. private health insurance, framing it explicitly as a midterm election platform. The framework sets three goals: reversing GOP cuts that raised costs for ACA enrollees, simplifying coverage, and ending corporate profiteering by insurers—including reforming medical loss ratio rules and eliminating insurer practices that delay or deny care. The letter deliberately leaves open the Medicare-for-All versus ACA-build-out debate; staff aim to draft legislative text in 2027. Democrats characterized the effort as a response to the $1 trillion in Medicaid and ACA cuts enacted in the One Big Beautiful Bill Act.
Source(s):
Senate Democrats lay out plans to overhaul health insurance after setbacks under Trump
Democrats Seek Bold Ideas For Health Reforms With Eyes On Midterms
Democratic senators detail plans to take on ‘Big Insurance’
Tags: #PAYER #PATIENT #ALL

Hassan Report on GSK Flovent Reignites Debate on Authorized Generics and Medicaid Rebate Avoidance

Sen. Maggie Hassan (D-NH) released a report finding that GSK controlled the U.S. market for its Flovent asthma inhaler for more than 20 years through an authorized generic partnership that allowed the company to avoid Medicaid rebates tied to price hikes. After GSK withdrew the branded product and introduced an identical high-priced authorized generic, more than 78% of parents reported their child had to switch medications, 18% experienced worsening symptoms, and 9% had greater asthma flare-ups. Hassan called for legislation to prevent other companies from using the same tactic; the report reignited the broader debate between PBMs and manufacturers over pricing strategy accountability.
Source(s):
GSK’s management of Flovent allowed it to ‘game the system’: Hassan
Hassan’s Report On GSK Inhaler Reignites PBM-Manufacturer Debate
Tags: #DRUG #PAYER #PATIENT

Bipartisan Bill Would Exempt Physicians and Healthcare Workers From $100K H-1B Visa Fee

Bipartisan House legislation—the Physicians and the Healthcare Workforce Act—would exempt doctors and other healthcare workers from a $100,000 H-1B visa application fee that took effect in September 2025, and would prohibit new H-1B fees from being imposed on these workers. Sponsors include Reps. Lawler (R-NY), Bishop (D-GA), Salazar (R-FL), and Clarke (D-NY). Medical associations backed the bill, noting that international medical graduates comprise about one-quarter of U.S. practicing physicians and are disproportionately concentrated in rural and underserved communities. A survey by the Greater New York Hospital Association found 25% of member facilities had already paused or limited physician recruitment requiring H-1B visas.
Source(s):
New Legislation Would Shield Doctors From $100K H-1B Visa Fee
Bipartisan bill introduced to exempt healthcare workers from $100K H-1B visa fee
Tags: #PROVIDER #HOSPITAL

House E&C Hearings Signal Republican Interest in Physician-Owned Hospitals, Site-Neutral Payment, and Provider Consolidation

A pair of House Energy and Commerce health subcommittee hearings this week put provider affordability under the microscope. Republican members signaled support for lifting ACA restrictions on physician-owned hospitals, reforming Medicare physician payment, and curbing provider consolidation as strategies to lower health costs. The majority staff memo specifically highlighted site-neutral payment reform—standardizing reimbursement regardless of care setting—a longstanding priority strongly opposed by hospitals. Democrats repeatedly pointed to the $1 trillion in Medicaid cuts in the One Big Beautiful Bill and the failure to extend ACA subsidies as the primary cost drivers. A separate hearing featured the AHA CEO and AMA board chair on affordability and provider competition.
Source(s):
To tackle healthcare costs, representatives weigh curbs on provider consolidation
Consolidation, Physician Pay Reform Take Center Stage During E&C Health Affordability Hearing
Tags: #PROVIDER #HOSPITAL #PAYER

White House Sends Congress Blueprint for Federal AI Rules, Seeks to Preempt State Laws

The White House published a long-awaited AI policy framework urging Congress to codify a light-touch federal rulebook that would preempt state AI laws the administration says impose undue burdens on innovation. The blueprint calls on Congress to prevent states from regulating how AI models are developed or penalizing companies for how their AI is used by third parties, while preserving state authority over child safety protections. The administration explicitly directed Congress not to create any new federal agencies to regulate AI. Bipartisan support is considered unlikely.
Source(s): White House sends blueprint for national AI rules to Congress
Tags: #ALL

Notable Notes

AI in Health Care Roundup

Artificial intelligence in health care drew scrutiny from multiple directions this week, spanning regulatory stability, workforce disruption, and a pointed argument that rapid AI adoption is deepening medicine’s existing trust crisis.

• Which FDA Division Has the Most Stability As AI Tools Get Adopted Across the Agency?
• The healthcare roles least, most vulnerable to AI: Washington Post
• Opinion: The AI Push in Health Care Is Deepening Medicine’s Trust Crisis

Tags: #PROVIDER #PAYER #PATIENT

Telehealth Firm Admits to Selling Patient Records to Law Firms in Epic Interoperability Lawsuit

GuardDog admitted to accessing patient medical histories stored on Epic’s platform and selling some records to law firms engaged in unrelated civil litigation. The disclosure emerged in Epic’s lawsuit against Health Gorilla, the primary defendant, which maintains it did nothing wrong and accuses Epic of stifling interoperability. The case raises significant questions about data security and the limits of health data sharing under interoperability requirements.
Source(s): Telehealth company admits to sharing medical records with law firms as Epic’s lawsuit heats up
Tags: #PROVIDER #HOSPITAL #PAYER

Cardiac Device and Surgery Roundup

This week brought notable developments in cardiac surgical and device technology.

• FDA-Approved Sutureless Aortic Valve Implanted for First Time in U.S.
• Re-Operative Aortic Arch Repair: Canadian Multicenter Registry Identifies Risk Factors for Mortality

Tags: #DEVICE #PROVIDER

Hospitals’ Financial Performance Off to a Shaky Start in 2026

Rising bad debt and operating expenses challenged hospitals in January 2026, according to Kaufman Hall, with the consultancy warning those pressures are unlikely to abate through the year.
Source(s): Hospitals’ financial performance off to a shaky start in 2026: report
Tags: #HOSPITAL #PAYER