This Week at a Glance
The Health Subcommittee held no hearings or markups this week. Activity was concentrated at the agency level, led by a significant CMS rulemaking package released April 2: the finalized 2027 Medicare Advantage and Part D rule, and three proposed payment and quality rules covering hospice providers, skilled nursing facilities, and inpatient rehabilitation facilities. The MA/Part D final rule carries particular weight for Puerto Rico, which has the highest Medicare Advantage penetration rate of any U.S. jurisdiction at approximately 95 percent of Medicare beneficiaries.
On the legislative front, Republican discussions over deeper Medicaid and ACA cuts to offset defense spending continued but have not coalesced into actionable committee proposals. President Trump publicly questioned the federal government's role in funding Medicare, Medicaid, and child care — a statement with direct committee implications given E&C jurisdiction over Medicaid. The April 7 deadline for CMS COO Kimberly Brandt to respond to the committee testimony dispute from Issue 7 arrives this coming week.
CMS RULEMAKING
2027 Medicare Advantage and Part D Final Rule
CMS finalized its contract year 2027 Medicare Advantage (MA) and Part D rule on April 2, locking in structural changes to plan quality measurement, prescription drug coverage, and supplemental benefit administration. The rule represents one of the more consequential annual MA/Part D updates in recent cycles.
On plan quality, CMS streamlined the Star Ratings system by removing eleven low-value administrative measures and adding a new Part C Depression Screening measure, with the stated goal of aligning quality scores more closely with patient outcomes. The Health Equity Index reward is suspended for 2027 as CMS simplifies its ratings methodology.
The Part D coverage gap — historically referred to as the donut hole — is formally eliminated under the rule, with a lower annual out-of-pocket spending cap and no cost sharing in the catastrophic coverage phase. The change is the most significant structural shift in Part D since the Affordable Care Act began phasing out the gap, and it takes effect for plan year 2027.
CMS also tightened rules governing MA supplemental benefit debit cards to ensure funds are spent on covered benefits and to reduce fraud exposure. Several documentation and enrollment requirements are reduced in line with the administration's deregulation executive order.
Puerto Rico Connection
Puerto Rico has the highest Medicare Advantage penetration rate of any U.S. jurisdiction — approximately 95 percent of Medicare beneficiaries are enrolled in MA plans, according to KFF. That concentration means every structural change to the MA program has an outsized effect on the island's healthcare system relative to any state. The elimination of the Part D donut hole directly benefits Puerto Rico's MA enrollees who have historically faced significant prescription drug cost burdens mid-year.
The Star Ratings reform is equally significant. Puerto Rico's MA plans perform well on quality — 82 percent of beneficiaries are enrolled in five-star plans — but the island already receives the lowest per-beneficiary MA payments in the nation, approximately $730 per month compared to $1,228 on the mainland. Changes to how quality is measured and rewarded affect the competitive and financial position of Puerto Rico's carriers directly. The committee's ongoing oversight of CMS and any legislative adjustments to the MA benchmarking framework remain the key federal levers to watch.
FY 2027 Payment Rules: Hospice, Skilled Nursing Facilities, and Inpatient Rehabilitation Facilities
CMS simultaneously proposed three payment and quality rules on April 2, each projecting a 2.4 percent rate increase for fiscal year 2027.
For hospice providers, CMS proposed a new Service and Spending Variation Index (SSVI) — a public fraud-risk scoring system that flags providers based on billing patterns, non-hospice spending, and live discharge rates. Roughly 20 percent of hospices were noncompliant with quality reporting requirements in 2025; noncompliant providers would receive a 1.6 percent payment cut rather than the 2.4 percent increase, and a warning indicator on Medicare's Care Compare consumer-facing tool. All beneficiaries would be required to receive a plain-language addendum at enrollment explaining what hospice covers and what it does not. CMS has already revoked or deactivated hundreds of hospice providers in high-fraud states — Arizona, California, Nevada, and Texas — and expanded targeted oversight to Georgia and Ohio.
For skilled nursing facilities (SNFs) and inpatient rehabilitation facilities (IRFs), the proposed rules tighten quality reporting timelines — data submission deadlines would be shortened from 4.5 months to approximately 45 days beginning in fiscal year 2029. SNFs would also be required to submit resident assessment data on all patients receiving covered skilled care regardless of payer, not only Medicare patients. CMS is seeking feedback on updating the Patient Driven Payment Model to address case mix upcoding, where facilities may classify patients as more complex than warranted to receive higher payments.
LEGISLATIVE & POLITICAL CONTEXT
Republican Medicaid and ACA Cut Discussions Continue
Republican discussions over Medicaid and ACA reductions to offset increased defense and border enforcement spending continued during the week of March 30, though no concrete committee action resulted. President Trump stated publicly that it is not possible for the federal government to sustain current funding levels for Medicare, Medicaid, and child care, and suggested those responsibilities should shift to states — a framing that, if translated into legislation, would fall directly within E&C jurisdiction.
House Budget Committee Chairman Jodey Arrington (R-TX) separately raised the idea of funding ACA cost-sharing reduction payments, which the Congressional Budget Office has previously estimated would lower benchmark premiums by approximately 11 percent while leaving an estimated 300,000 additional people uninsured and reducing federal outlays by over $30 billion. Arrington chairs the Budget Committee, not E&C; no legislative text has been introduced. This remains a discussion item rather than an active committee proposal.
Analysts do not expect the broader package of cuts to attract sufficient House votes in its current form. Any Medicaid restructuring, work requirement expansion, or ACA subsidy modification would nonetheless be drafted in substantial part through E&C. The reconciliation timeline is the thread to watch.
ACA Marketplace Enrollment Reaches Near-Record 23.1 Million
CMS released its 2026 Open Enrollment Report on March 27, showing 23.1 million enrollees in ACA Marketplace coverage — near a record high. Fraud enforcement actions in 2025 removed approximately 1.5 million improper enrollments. Plan selection shifted toward bronze and gold tiers, with silver declining to 43 percent. Lower-income enrollees remain dominant: 46 percent of participants earn between 100 and 150 percent of the federal poverty level. The enrollment figures provide context for ongoing reconciliation discussions, as any subsidy reduction or eligibility change would affect a near-record enrollment base.
OTHER DEVELOPMENTS
ARPA-H Launches $144 Million Microplastics Research Program
The Advanced Research Projects Agency for Health (ARPA-H) announced a $144 million program on April 2 called STOMP — Screening and Treatment for Microplastics — to develop the first reliable measurement and intervention tools for microplastics accumulation in the human body. Phase one focuses on developing gold-standard detection methods and a risk stratification system. Phase two targets removal interventions drawing on pharmaceutical biology and bioremediation science. The program is designed to produce broadly deployable tools rather than niche clinical breakthroughs, with a long-term focus on reducing downstream healthcare costs. ARPA-H operates within the HHS ecosystem and its research agenda is subject to committee oversight.
HHS Technology Leadership Consolidated Under Chief Information Officer
HHS reversed a 2024 reorganization on March 31, consolidating technology leadership under the Office of the Chief Information Officer (OCIO). Key roles — including Chief Technology Officer, Chief AI Officer, and Chief Data Officer — were moved back under the CIO to unify IT, data, and AI strategy. The Office of the National Coordinator for Health IT (ONC) is refocused on policy, standards, and interoperability rather than operational IT functions. The stated goal is improved health data liquidity across the system and a more secure, AI-enabled HHS infrastructure.
CMS Hemp Pilot and Hospital Nutrition Alert
CMS launched a limited pilot on April 1 allowing clinician-supervised use of hemp-derived products as a Substance Access Beneficiary Engagement Incentive within select Innovation Center models — specifically the Long-Term Enhanced ACO Design (LEAD) Model beginning in 2027. Only federally legal hemp products with 0.3 percent THC or less are eligible; inhalable products are excluded. A $500 per patient annual cap applies. Medicare does not cover or reimburse these products. Separately, HHS Secretary Robert F. Kennedy Jr. directed hospitals through a CMS Quality and Safety Alert to align meals with federal dietary guidelines, reduce ultra-processed foods, and integrate nutrition standards into care quality programs as part of his ongoing Take Back Your Health initiative.
"Cicada" COVID-19 Variant Detected Across at Least 25 States
A new COVID-19 variant referred to as "Cicada" is spreading across at least 25 states and has been detected in Puerto Rico. No federal public health emergency has been declared and the CDC has not issued formal variant-specific guidance as of the close of the reporting period. The committee's jurisdiction over CDC and pandemic preparedness makes variant surveillance an ongoing monitoring thread.
Puerto Rico Connection
The Cicada variant has been confirmed in Puerto Rico. Given the island's historically constrained public health surveillance infrastructure and its dependence on federal Medicaid funding for healthcare system capacity, any federal response — including CDC guidance, emergency declarations, or supplemental funding — carries direct implications for Puerto Rico. The committee's oversight of CDC and HHS pandemic preparedness is the relevant federal nexus to monitor.
CDC Study: Dengue Fever Costs Puerto Rico Over $1 Billion in Epidemic Years
A CDC-backed study published during the week of March 30 found that dengue fever can cost Puerto Rico over $1 billion annually in epidemic years — approaching one percent of the island's gross domestic product at peak economic burden. True case counts are estimated at approximately 15 times reported figures, reflecting significant underdetection in the island's surveillance system. In non-epidemic years, the economic burden falls to approximately $63 million. The study attributes improved fever monitoring systems with identifying a much larger share of previously unreported cases. The findings underscore the federal policy relevance of sustained investment in Puerto Rico's public health infrastructure, a topic within the committee's oversight scope.
LOOKING AHEAD
Upcoming Committee Activity
No Health Subcommittee hearings or markups have been announced for the week of April 6. Monitor energycommerce.house.gov for scheduling updates.
On Our Radar
Ginnell Torres
Health Law Attorney
gtorres@mzls.com
Maceira Zayas Law
