Weekly Spotlight
Medicaid Under Pressure: Work Requirements, Fraud Enforcement, and Rural Funding Collide
The fault lines in American health coverage deepened this week as Congress moved closer to imposing Medicaid work requirements while the Trump administration opened new fronts in its fraud enforcement campaign.
An Urban Institute analysis funded by the Robert Wood Johnson Foundation estimated that between 4.9 million and 10.1 million people could lose Medicaid coverage in 2028 under H.R. 1 work requirements. The range depends on how aggressively states implement eligibility checks: between 2 million and 3.1 million from more frequent redeterminations alone, and 3 million to 7 million from the work requirements themselves. Researchers noted that Arkansas’ earlier pilot found 95% of affected enrollees were already working or qualified for an exemption, and the requirements did not increase employment. Caregivers, students, the self-employed, people with irregular schedules, and adults over 50 face particularly high risk of losing coverage due to compliance burdens.
Whether those requirements will land with full force on January 1, 2027, remains an open question. At an AHIP forum, Salo Health Strategies’ Matt Salo warned that systems, government decisions, and member outreach are not ready for full enforcement, predicting that negative coverage-loss stories would be politically damaging. National Association of Medicaid Directors Executive Director Kate McEvoy disagreed, citing a “Herculean effort” between CMS and states on system functionality. CMS itself signaled that Medicaid managed care organizations will be key players during implementation, with the administration planning to reinstate flexibilities from the post-pandemic redetermination process.
Meanwhile, the administration deployed fraud enforcement as a separate lever against state Medicaid programs. CMS notified Minnesota’s Medicaid Director on March 19 that it approved the state’s corrective action plan for addressing fraud, but the approval followed a threat to withhold more than $2 billion in federal funds that Georgetown’s Center for Children and Families characterized as “weaponizing” fraud enforcement. House Democrats then accused CMS Deputy Administrator Kimberly Brandt of misleading Congress when she testified that CMS could not meet with the state before taking action, citing litigation constraints that Democrats said did not hold up.
The administration’s fraud claims face scrutiny beyond Minnesota. A STAT investigation found that despite assertions of widespread fraud in Medicaid home-based care, officials have not produced supporting evidence. After DOGE released spending data showing home care expenditures had more than doubled between 2018 and 2024, an independent analysis found irregular activity by individual actors rather than systematic fraud. The claims threaten home and community-based services that older Americans and people with disabilities depend on.
Adding to the pressure, KFF Health News reported that at least 10 states plan to use their share of the $50 billion federal Rural Health Transformation Program to “right-size” rural hospital services, potentially cutting inpatient or other service lines. Congressional Republicans created the fund as part of H.R. 1 to offset Medicaid cuts in rural communities, but Montana’s $233 million first-year award includes language about “downsizing” hospital services, suggesting the safety net may shrink rather than stabilize.
Tags: #PATIENT #PAYER #HOSPITAL
Centers for Medicare and Medicaid Services (CMS)
CMMI Roundup
The CMS Innovation Center was the subject of multiple developments this week, from a sweeping GAO review to new model launches and leadership signals on AI and value-based care.
- A GAO report found CMMI obligated $11.4 billion from 2011 through 2024 to test 70 models, with only four achieving net savings and expanding nationwide. Annual obligations peaked at $1.3 billion in FY2015 and have declined nearly 40% to $789 million. Sources: CMS Innovation Center: Obligations and Model Testing Progress
- Accelerating State Pediatric Innovation Readiness and Effectiveness (ASPIRE) Model launched as a 10-year voluntary program for up to five state Medicaid agencies to improve care coordination for children and youth up to age 21 with complex medical and behavioral needs. Sources: CMS.gov, Fierce Healthcare, STAT, Inside Health Policy
- CMMI AI Lead Bullish On Future Of ACCESS Model, Downplays Tech Focus
- CMMI Signals Medicaid-Focused, MAHA Models Coming Soon
- CMMI Leader: Could AI Lessen The Quality Measure Reporting Burden?
- KFF published an explainer on the BALANCE Model, a new CMMI demonstration program to expand Medicare and Medicaid coverage of GLP-1 drugs for obesity. The model is part of a broader strategy including MFN deals with Novo Nordisk and Eli Lilly, TrumpRx, and semaglutide price negotiation set for 2027. Sources: What to Know About the BALANCE Model for GLP-1s in Medicare and Medicaid
- A bipartisan bill introduced March 26 would establish a permanent, full-risk ACO program within traditional Medicare, building on successful CMMI models. Sources: Bipartisan Bill Would Set Up Permanent Full-Risk ACO Program In Traditional Medicare
Tags: #PAYER #PROVIDER #DRUG #PATIENT
Medicare Advantage Roundup
Medicare Advantage sustainability, payment rates, and enrollment policy drew attention from stakeholders and the administration this week.
- CMS Medicare chief Chris Klomp said his team is evaluating models that would automatically enroll beneficiaries into either an MA plan or an ACO, arguing either option would be better than fee-for-service. NAACOS signaled cautious support for the ACO path. Sources: Healthcare Finance News, Inside Health Policy
- 8 Medicare Advantage numbers to know in 2026
- MA Stakeholders Highlight Political Risk Of Inadequate Rates, Want RA Changes Delayed
- New Healthcare Advisory Committee will look at Medicare Advantage sustainability
Tags: #PAYER #HOSPITAL #PATIENT
ACA Marketplace in Flux as Subsidy Expiration Reshapes Enrollment and Regulation
The expiration of enhanced ACA premium tax credits is reshaping the marketplace on multiple fronts. A KFF survey found 80% of returning enrollees report higher costs, with about 1 in 10 now uninsured. New CMS data confirmed average premiums increased 58%, driving a jump in bronze plan enrollment, while overall marketplace selections dropped by approximately 1.2 million. The Trump administration proposed sweeping 2027 exchange regulations, including stepped-up income verification and new agent scrutiny, while claiming progress against enrollment fraud, even as unauthorized complaints rose to 341,906 in 2025. Analysts at Brookings and Georgetown argue the consumer-facing restrictions may prevent eligible enrollees from obtaining coverage, and a federal judge previously stayed similar provisions. Separately, major hospital and insurance lobbies jointly urged CMS to abandon its proposal to allow plans without provider networks, and Senate Democrats condemned the rule for promoting what they called “junk coverage.” CMS officials indicated some of the more significant proposals are on a longer trajectory and will not be finalized this year.Source(s):1 in 10 ACA enrollees dropped coverage after subsidy lapse: pollACA premium spike funnels more consumers into high-deductible plans: CMSTrump Team Claims Successes Against ACA Fraud While Pushing for More ControlsTrump team touts ACA fraud wins while seeking tighter controlsInsurer, Hospital Lobbies Coalesce, Tell Admin To Scrap Proposal On Non-Network PlansACA Exchange Rule Faces Bipartisan Industry and Congressional PushbackTags: #PATIENT #PAYER #HOSPITAL
Prior Authorization Reform: Costs, Lawsuits, and AI in 2026
Prior authorization requirements cost the U.S. healthcare system an estimated $35 billion annually, with each transaction costing practices $20 to $30, according to a Health Affairs policy brief. Approximately 90% of requests to private payers are approved initially, suggesting the process adds cost without meaningful clinical value. The Electronic Frontier Foundation sued CMS seeking records on the agency’s Medicare AI prior authorization pilot, including vendor agreements and evaluations of accuracy, bias, and hallucinations. Meanwhile, CMS rules requiring payers to speed up decisions and improve transparency take effect in 2026, and stakeholders are weighing risks and benefits of AI to streamline the process.Source(s):The Current Prior Authorization LandscapeTech nonprofit sues CMS over Medicare AI prior authorization pilotWhat to Expect for Prior Authorization in 2026Tags: #PAYER #PROVIDER #HOSPITAL
No Surprises Act Arbitration System Under Fire as Costs Top $5 Billion
The No Surprises Act’s independent dispute resolution (IDR) system is facing growing scrutiny over cost, exploitation, and calls for legislative reform. A STAT investigation revealed that HaloMD, a Texas-based company, filed more arbitration cases than any other entity in the first half of 2025. HaloMD, three Team Health entities, and SCP Health together filed 44% of all disputes, with providers winning nearly 90% of cases and HaloMD’s payouts averaging over nine times typical in-network rates. Four Blue Cross Blue Shield plans have sued the company for allegedly flooding the system with ineligible disputes. The IDR system has cost more than $5 billion in administrative expenses, fees, and higher payments in its first two years. Industry leaders say the law is protecting patients from surprise bills but its arbitration mechanism is being overused. Elevance Health’s Dr. Catherine Gaffigan defended the company’s new facility administrative policy in response to American Hospital Association criticism, arguing for restored balance in the law’s implementation.Source(s):No Surprises Act Arbitration Under Scrutiny as HaloMD Dominates Federal IDR Process‘This is Crazy’: Health Experts Call for Changes to the No Surprises ActRestoring balance to the No Surprises ActTags: #PAYER #PROVIDER #HOSPITAL
CMS Final Rule Mandates Electronic Claims Documentation, Ending Fax and Mail
CMS issued a final rule standardizing the electronic exchange of medical records and claims documentation, effectively ending the use of fax machines and snail mail for these transactions. The Administrative Simplification rule, effective May 26, 2026, gives HIPAA-covered entities until May 26, 2028, to comply. CMS projects the mandate will save the healthcare industry approximately $781 million annually.Source(s):CMS Final Rule Mandates Electronic Claims Documentation, Ending Fax and MailCMS final rule ends fax machines and snail mailTags: #PAYER #PROVIDER #HOSPITAL
CMS Pushes AI “Cultural Shift” Across Medicaid and Medicare
CMS Administrator Mehmet Oz called for a “cultural shift” at an AHIP conference, saying he wants every CMS employee to see how AI can improve their work. CMS officials outlined plans for AI in patient experience, cost reduction, and fraud detection, including a new Medicare App Library with commitments from major tech companies to build AI-powered digital health tools. Medicaid Director Dan Brillman urged states to deploy AI at every possible point using federal funds. A KFF poll released the same day found about a third of Americans use AI for health information, with roughly three-quarters expressing privacy concerns.Source(s): Medicaid’s AI ‘cultural shift’Tags: #PAYER #PATIENT
Medicare Must Keep Pace With Innovation
AdvaMed President and CEO Scott Whitaker argued that Medicare must keep pace with innovation in its coverage decisions for FDA-authorized breakthrough medical technologies.Source(s): Medicare Must Keep Pace With InnovationTags: #DEVICE #PROVIDER
Food and Drug Administration (FDA)
MedTech and AI Roundup
Several FDA clearances and pilot developments this week advanced the integration of AI into medical device procedures and regulation.
- Philips wins FDA clearance for imaging device developed with Edwards
- Cleveland Clinic pilots AI tool for valve procedures
- FDA Follow-Ups On Digital Health Pilot Shaping AI Regulations
Tags: #DEVICE #PROVIDER
FDA solicits feedback on controversial national priority voucher review pathway
The FDA has scheduled a June 12 public hearing to gather input on the Commissioner’s National Priority Voucher program, which was introduced last June and has resulted in four accelerated drug reviews to date.Source(s): FDA solicits feedback on controversial national priority voucher review pathwayTags: #DRUG
FDA Advisory Committees: More Transparency Needed on Conflict of Interest Determinations
A GAO report found the FDA needs greater transparency in its conflict-of-interest policies for advisory committee members. Reviewing 17 meetings of opioid-related committees from June 2018 through May 2025, GAO found an average of 29 members invited per meeting, with 15 recusals for financial conflicts and one waiver granted.Source(s): FDA Advisory Committees: More Transparency Needed on Policies for Making Conflict of Interest DeterminationsTags: #DRUG #DEVICE
Department of Health and Human Services (HHS)
CDC Leadership Vacuum Deepens as Trump Misses Nomination Deadline
The Trump administration missed its Federal Vacancies Reform Act deadline on March 25 to nominate a permanent CDC director, extending a leadership vacuum that began when Susan Monarez was fired last August. Acting director Jay Bhattacharya told staff a nomination was imminent, though his own acting title expired the same day. Key Republican senators including Bill Cassidy and Lisa Murkowski are demanding a candidate who balances MAHA priorities with scientific credibility. Three candidates are reportedly under consideration: former Kentucky Gov. Ernie Fletcher, Mississippi health director Daniel Edney, and Johns Hopkins cardiologist Joseph Marine. A KFF Health News investigation documented the toll on a demoralized workforce that has weathered more than 1,000 firings, funding cuts, and ongoing instability.Source(s):CDC dilemma: Nominee may need both MAHA and science chopsTrump Misses Deadline for CDC Director NomineeDemoralized CDC Workforce Reels From Year of Firings, Funding Cuts, and a ShootingTags: #ALL
Vaccine Policy Roundup
Federal vaccine policy faced upheaval on multiple fronts this week, from ACIP disruption to declining childhood coverage.
- Robert Malone, the anti-vaccine activist appointed as ACIP vice chair, resigned, citing conflicts with HHS over whether to appeal a court ruling that stayed the panel’s votes, including seasonal COVID-19 and flu recommendations. The court stay creates access problems for pharmacists in states closely tied to ACIP guidance. Sources: Robert Malone Steps Down From ACIP, ACIP Court Ruling Could Create Vaccine Access Issues In Some States
- Kennedy’s former personal attorney petitioned HHS to add a broad range of conditions to the Vaccine Injury Compensation Program table, which would expand eligibility for federal compensation claims. Sources: RFK Jr.’s Former Lawyer Demands Additions To Vaccine Injury Table
- A CDC report found vaccine coverage by age 2 decreased for five vaccines in certain demographic groups among children born in 2021-2022. The data predates the CDC’s recent reduction in universally recommended childhood vaccines. Sources: CDC Report Spots Decreasing Coverage of 5 Vaccines
Tags: #PATIENT #DRUG #PROVIDER
Casey Means Surgeon General Nomination on the Brink of Collapse
President Trump said Sunday it is “possible” he would withdraw Casey Means’ nomination as Surgeon General, the clearest signal yet that the nomination lacks sufficient Republican support. Senators from both parties have expressed skepticism following a contentious hearing, and former Trump first-term officials publicly called Means unfit, citing her lack of an active medical license and history of dietary supplement sponsorships. The stalled nomination, now more than 10 months old, represents a test of the MAHA movement’s political influence within the party.Source(s):Trump says it’s ‘possible’ Means will be withdrawn as surgeon general nomineeCasey Means Surgeon General Nomination Stalls as Bipartisan Skepticism GrowsMAHA’s political power tested as surgeon general pick stallsTags: #ALL
NIH Grant Terminations Disproportionately Hit Women and Early-Career Scientists
A PNAS study found that the 2,291 NIH grant terminations in 2025, which rescinded $2.45 billion in funding, disproportionately affected women and early-career researchers. Women lost a larger share of their grant funding than men on average (57.9% vs. 48.2%), and among doctoral students and assistant professors, 60% of terminated grants were led by women.Source(s):NIH Grant Terminations PNAS StudySTAT: NIH cuts hit women, early-career scientists hardestTags: #PROVIDER
HIV Aid Workers Continue Unpaid After U.S. Funding Cuts
New data suggest HIV treatment outcomes in Uganda have not deteriorated as severely as feared after the Trump administration paused foreign aid. Community health workers whose U.S.-funded salaries were cut have continued working unpaid to ensure patients stay on medications.Source(s): He’s one reason why aid cuts weren’t as dire for the HIV population as predictedTags: #PATIENT
Inside the Political Empire Behind RFK Jr. and MAHA
A Boston Globe/STAT investigation profiles Tony Lyons, a publisher and Kennedy ally who has built a multimillion-dollar political operation spanning nonprofits, businesses, and a PAC under the MAHA banner. Lyons hosts administration officials on weekly activist organizing calls and convenes gatherings around the country. The network increasingly also cheerleads for President Trump.Source(s): We’re on the Inside Now’: Meet the Man Building a Political Empire Behind RFK Jr.Tags: #ALL
Medical School Accreditor Drops Requirement to Teach About Health Equity
The Liaison Committee on Medical Education (LCME) removed language from its 2027-2028 standards requiring medical schools to teach about health inequities and structural competency. The change comes amid Trump administration pressure, including a May 2025 executive order targeting DEI in accreditation and new DOJ investigations into admissions practices at Stanford, Ohio State, and UC San Diego.Source(s): Medical School Accreditor Drops Requirement to Teach About Health EquityTags: #PROVIDER
HHS Taps Diverse Crew For New Health Reform Advisory Panel
HHS appointed members to a new advisory panel charged with incorporating MAHA values into health care delivery and finance reform. The panel includes health guru Tony Robbins, a venture capitalist, an interoperability vendor, and several experts in value-based care.Source(s): HHS Taps Diverse Crew For New Health Reform Advisory PanelTags: #ALL
FTC Forms Healthcare Task Force for Coordinated Enforcement
The FTC is forming a Healthcare Task Force consolidating enforcement across its Bureaus of Competition, Consumer Protection, and Economics. Chairman Andrew Ferguson directed its creation in response to a Trump executive order calling for a more competitive healthcare system. The task force is seeking to expand membership to include HHS and DOJ.Source(s):FTC Healthcare Task Force (MedTech Dive)FTC Launches Healthcare Task Force (HCF News)Tags: #ALL
Heard on the Hill
Drug Pricing and PBM Reform Roundup
Drug pricing legislation and PBM oversight advanced on multiple fronts this week.
- Top Trump administration health official Chris Klomp said MFN drug pricing deals aim to increase prices in peer countries rather than lower U.S. prices. Legal scholars note drugmakers could exploit a timing loophole by delaying international launches beyond the deals’ three-year terms. Sources: MFN Drug Pricing Strategy Faces Loophole as Officials Signal Goal Is Raising Foreign Prices
- The White House has drafted legislative text for its drug pricing policy and is sharing it with more than a dozen major pharmaceutical companies. The draft includes a provision allowing cash-purchased drugs to count toward a patient’s deductible. Sources: STAT+: In private meetings, White House works to win pharma companies’ support for drug pricing bill
- Opinion: Washington is on the verge of true PBM reform
- Top PBMs by 2025 market share
Tags: #DRUG #PATIENT #PAYER
GOP Reconciliation Agenda Expands
The list of policy items Republicans are considering for their second budget reconciliation bill continues to grow. The ICE funding debate could create a legislative vehicle for health care reforms that would otherwise face filibuster hurdles in the Senate, providing an unexpected opening for policy changes. Source(s):Reconciliation Fight Over ICE Funding Could Open Door for Health ReformsThe GOP’s growing reconciliation wish list Tags: #ALL
Senate Democrats Offer Plan to Increase Insurance Coverage, Ease Healthcare Red Tape
A dozen Senate Democrats released a three-pillar plan aimed at expanding health insurance coverage and simplifying the insurance system. The proposal would reverse recent cost increases, guarantee coverage regardless of health status, and reduce administrative complexity. Source(s): Senate Democrats Offer Plan to Increase Insurance Coverage, Ease Healthcare Red Tape Tags: #PATIENT #PAYER
House Democrats Demand Kennedy Testify on HHS Budget
House Education and Workforce Committee Democrats are pressing HHS Secretary Robert F. Kennedy Jr. to testify before the committee on the president’s fiscal year 2027 budget request for HHS. Kennedy has not yet appeared before the panel. Source(s): Ed & Workforce Dems Demand To Hear From Kennedy On HHS Budget Tags: #ALL
Trump to send Congress his budget request April 3
President Trump plans to send Congress his budget request April 3 for the fiscal year beginning in October. The White House is also reviewing a Pentagon request for approximately $200 billion in emergency funding for military action in Iran. Source(s): Trump to send Congress his budget request April 3 Tags: #ALL
Notable Notes
White House Releases AI Policy Framework Calling for Federal Preemption of State Laws
The White House released a national policy framework for AI legislation on March 20, including more than 30 legislative recommendations across seven sections. Key provisions call on Congress to preempt state AI regulation, authorize regulatory sandboxes with liability protection for AI developers, establish child safety requirements for AI platforms, and affirm existing privacy protections for AI systems. The framework also addresses energy costs, creators’ intellectual property rights, and workforce impacts. Source(s):White House Releases AI Policy FrameworkWhite House AI Framework (PDF) Tags: #ALL
Stryker Cyberattack Disrupts Surgeries Nationwide as Recovery Continues
An Iran-backed cyberattack on Stryker, first disclosed March 11, has disrupted order processing, manufacturing, and shipping, forcing hospitals to reschedule surgical procedures. The DOJ seized websites linked to the Handala hacking group. Major health systems including CommonSpirit Health, Mass General Brigham, and Providence have been affected. Stryker said manufacturing capacity is ramping up but is still restoring systems two weeks after the breach. Source(s):Stryker Cyberattack Delays SurgeriesHow Stryker Is Faring in Wake of Massive Cyber Outage Tags: #DEVICE #HOSPITAL
Wearable Sensor Detects, Grades Aortic Stenosis
A chest-worn multimodal biosensor accurately detected the presence and severity of aortic stenosis in the proof-of-concept SENSE-AS study, published in JACC: Advances. The device integrates ECG, seismocardiogram, and phonocardiogram signals, providing assessments within minutes. The study enrolled 40 participants at Northwestern and will be presented at ACC Scientific Session 2026. Source(s): Wearable sensor detects, grades aortic stenosis Tags: #DEVICE #PATIENT
Health Care Jobs Growth Stagnating at Biggest For-Profit Firms
Large for-profit health care companies have not been driving U.S. health care job growth over the past five years, despite the industry being a major employment engine. Health insurers in particular are cutting jobs, some of which has not been previously reported. Source(s): STAT+: Health care jobs growth is stagnating at the biggest for-profit firms Tags: #HOSPITAL #PAYER