Senate committees continue to examine fraud in federal and state programs. Discussions spanned social services, public benefits, and immigration-related enforcement. During the Senate Homeland Security and Governmental Affairs Committee hearing, Democrats emphasized the need to safeguard taxpayer dollars but cautioned against using fraud concerns to unfairly target US citizens, stressing that fraud is a nationwide issue requiring a comprehensive national strategy, rather than a focus solely on one state. Republicans on the committee argued that Minnesota failed to adequately prosecute individuals involved in fraud, including within the Medicaid program. Witnesses described fraud as a systemic problem driven by outdated technology and weak oversight at the state and federal levels. Proposed policy solutions included increased independent third-party audits, enhanced data-sharing, receipt recertification, elimination of self-attestation, modernization of technology systems, and greater involvement of federal law enforcement.
While the focus of the Senate Judiciary Committee hearing was largely on illegal immigration and visa fraud in Minnesota and across the country, it contributed to the broader congressional discussion on combating fraud and strengthening enforcement across federal and state programs. Members emphasized the need for stronger prosecution efforts, and some senators raised concerns about potential vulnerabilities in public benefits programs, including Medicaid, as part of the continued conversation on preventing fraud and abuse.
House Energy and Commerce Health Subcommittee holds hearing on healthcare affordability, prescription drug supply chain. During the hearing, witnesses explained how pharmacy benefit managers, employer-sponsored insurance, biomedical innovations, consolidation, and drug pricing negotiations each influence the overall cost of prescription medications. Democrats urged the committee to conduct further investigation into President Trump’s most favored nation agreements with pharmaceutical companies. Ranking Member Pallone (D-NJ) asked Health Subcommittee Chair Griffith (R-VA) to work with him to obtain access to the full terms of those agreements, and Griffith agreed to do so. Republican committee members called for further investigations into the drug negotiations under the Inflation Reduction Act.
Senate Aging Committee discusses factors driving physicians from medicine. During the hearing, committee members heard testimony from several witnesses, who, along with senators on the committee, agreed that unsustainable administrative burdens contribute to physician burnout. Members and witnesses emphasized that the “cycle of burnout” must be addressed so physicians can spend more time caring for patients. Witnesses highlighted the need for substantive reforms, including expanded access to mental health resources and better support to ease the administrative aspects of physicians’ work. Republican members focused on the role of government regulation and intervention in driving burnout and expressed support for models such as direct primary care and concierge care to reduce administrative requirements. Democratic members, by contrast, stressed that changes to payment models, cuts to Medicaid, and caps on student loans could exacerbate burnout and worsen existing workforce shortages.
CMS releases proposed NBPP for 2027. The rule proposes changes to standards for qualified health plans (QHPs) participating on the Affordable Care Act marketplace, as well as new requirements for exchanges, agents, brokers, and web-brokers. The expansive rule totals 557 pages and was issued very late. It typically comes out in November or December of the prior year. A final rule is not anticipated until April 2026, and health plans are due to begin submitting their 2027 plans to states as soon as that month. The Centers for Medicare & Medicaid Services (CMS) press release on the proposed rule highlighted the goal of eliminating fraud across health insurance programs (another signal of the administration’s focus on program integrity, as reflected in multiple congressional hearings), and the proposed rule similarly emphasizes enhanced oversight and enforcement mechanisms.
Key proposals include:
Comments on the proposed rule are due by March 13, 2026. Read the CMS fact sheet here.
HRSA announces RFI for 340B Pilot Rebate Program. After recently withdrawing its 340B pilot rebate model after it was challenged in court, HRSA has issued a request for information (RFI) from the public to inform next steps as to the development and implementation of 340B rebate models. According to the RFI, it was issued to seek, “comments on whether HRSA should implement a rebate model under the 340B Program and how best to operationalize any such rebate framework for stakeholders. The information collected through this RFI will assist HRSA in evaluating the operational, financial, and access to drugs for patients of a rebate model on covered entities, manufacturers, and other stakeholders across the drug supply chain.” It further states that, “With the information collected from this RFI, HRSA will evaluate if a potential 340B Rebate Model Pilot Program is in the public’s interest and, if so, determine a viable implementation strategy, consistent with the 340B statute.” Comments on the RFI are due March 19, 2026.
Sens. Warren (D-MA) and Hawley (R-MO) introduced S. 3822, the Break Up Big Medicine Act to address vertical integration in the healthcare system. The bill would prohibit parent companies from simultaneously owning medical providers or management services organizations and pharmacy benefit managers or insurers, and would bar prescription drug or medical device wholesalers from owning provider entities. The legislation would require companies to divest prohibited ownership interests within one year of enactment and would impose automatic penalties for noncompliance. This bill builds upon on Sens. Warren and Hawley’s bipartisan Patients Before Monopolies Act by extending similar structural separation requirements to additional segments of the healthcare industry.
This bill’s introduction follows the recent health insurance executive hearings at the House Ways and Means and Energy and Commerce Committees. Vertical integration was also a topic at this week’s Energy and Commerce prescription drug supply chain hearing.
Both the House and Senate are scheduled to be out of session next week. In the absence of a confirmed agreement between Republicans and Democrats on DHS funding, or another stopgap continuing resolution, a partial government shutdown affecting only DHS programs would begin at midnight on Friday. In the coming weeks, we anticipate the release of the president’s FY 2027 budget request, along with his annual State of the Union address, which is scheduled for February 24, 2026.
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