Assistant Secretary Keane testifies at Senate HELP Committee. During the Senate Health, Education, Labor, and Pensions (HELP) Committee hearing, Democrats discussed guardrails for artificial intelligence (AI) use in healthcare and legislative solutions that would use technology to increase healthcare affordability. Republicans highlighted the positive effects of healthcare AI but raised concerns about bad actors in new health information technology programs. Members of both parties recommended bills to improve health technology.
Assistant Secretary Keane highlighted the December 2025 request for information on AI in healthcare. He stated that the administration’s top priority was to create a patient-centered health system where records follow the patients. Committee Chair Cassidy (R-LA) raised concerns about information blocking even when patients have given consent for their information to be shared. Keane responded that his agency has sent out notices of nonconformity in collaboration with the Office of Inspector General.
House Oversight Committee hears from Minnesota governor, attorney general as other states receive Congressional inquiries. The hearing largely focused on fraud in the Feeding Our Future program. Democrats stated that the hearing was partisan and noted that Republican-led states have not been targeted by antifraud efforts. They also focused on the long-term harms of cuts to Medicaid. Republicans argued that the Walz administration should have stopped all Medicaid payments once it identified signs of fraud, and raised concerns about political bribes from the Somali-American community to avoid fraud investigations.
Governor Walz and Attorney General Ellison acknowledged that there has been fraud within state programs in Minnesota but emphasized that fully withholding funds and deploying Immigration and Customs Enforcement agents is impeding the state’s ability to prosecute fraudsters. Walz stated that withholding Medicaid funds was a form of political retaliation by the Trump administration for not sharing Minnesota’s voter rolls. Ellison highlighted his office’s Medicaid fraud convictions and noted that Minnesota’s Medicaid fraud control unit is ranked fifth in the nation.
In addition to the House Oversight Committee hearing, the House Energy and Commerce Committee sent letters on March 3, 2026, to New York, California, Washington, Massachusetts, Pennsylvania, Vermont, Nebraska, Colorado, Oregon, and Maine seeking information on Medicaid fraud by March 17, 2026. It remains to be seen whether states will be able to fully respond by that date, and what steps the committee may take next. House Energy and Commerce Health Subcommittee Ranking Member DeGette (D-CO) issued a statement condemning the letters as a partisan exercise, noting that they overwhelmingly targeted Democratic states, with Nebraska as the sole exception.
CMS requests program integrity information from New York Medicaid. In a continuation of CMS’s scrutiny of fraud prevention and program integrity efforts within state Medicaid programs, CMS sent a detailed letter to New York’s Medicaid program outlining the agency’s concerns. CMS noted that New York’s Medicaid program has the second highest costs in the nation and its per beneficiary spending is 36% higher than the national average. CMS attributed this in part to high expenditures and rapid growth in long-term care services in the state. CMS also called out concerns about claims for personal care, home health, adult day care, nonemergency medical transportation, and behavioral health services, noting that these issues warrant immediate state attention and corrective action. CMS posed about 50 questions to the state, focused on oversight of fraud, waste, and abuse and improper payments; provider screening, enrollment, and revalidation; program integrity infrastructure and accountability; and high-risk billing patterns and systemic vulnerabilities.
OPM issues RIF proposed rule. Following a series of RIFs by various federal agencies, including the US Department of Health and Human Services (HHS), and subsequent lawsuits over the RIFs last year, OPM issued a proposed rule this week to change the RIF process. The proposed policies would prioritize performance over tenure when agencies determine which employees would be retained in a RIF. Comments are due by May 4, 2026. This follows a separate proposed OPM rule from February 2026 that would centralize RIF appeals within OPM as opposed to the Merit Systems Protection Board. Comments on that proposed rule are due March 12, 2026.
Minnesota sues CMS, HHS amid ongoing fraud investigations. Minnesota filed a federal lawsuit following last week’s announcement that CMS will defer $259 million in federal matching funds for Minnesota’s Medicaid program, including $243 million for potentially fraudulent claims related to home- and community-based services. In January 2026, CMS announced that it would withhold $2 billion annually from the state because of concerns that Minnesota was not addressing fraud within 14 home- and community-based service categories and was not in compliance with federal program integrity requirements. Minnesota appealed that noncompliance decision in January. The state noted that a hearing, as allowable under federal law, has not yet been scheduled.
In this lawsuit, Minnesota alleged that CMS extinguished the state’s right to a hearing related to the January notice of noncompliance by taking last week’s deferral action, because both actions relate to the same federal funding. Minnesota requested that the judge issue a temporary restraining order to block the deferral.
Federal court rules in favor of hospitals in 340B case. On March 3, 2026, a federal judge in Washington, DC, ruled that the Health Resources and Services Administration (HRSA) cannot use its 340B registration process to restrict use of 340B drugs by hospital “child sites” otherwise eligible to participate in the 340B program. The ruling concluded that HRSA lacks authority under the 340B statute to impose requirements delaying covered entity access to 340B discounts.
The House will be out of session next week, but the Senate will remain in town. Focus on the floor is likely to remain on foreign affairs and funding for the US Department of Homeland Security. The Senate Aging Committee will discuss Chinese influence on the US drug supply. We await the release of the president’s fiscal year 2027 budget request, which is reportedly not expected until the end of March.
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