This Week at a Glance
The Health Subcommittee advanced its spring legislative agenda this week, with Chairmen Guthrie and Griffith formally announcing a public health hearing for April 15 covering disease research, rural access, and prevention — a broad reauthorization package that reflects the subcommittee's sustained workload between hearing weeks. On the agency side, the week's most consequential action came from CMS, which released the 2027 Medicare Advantage and Part D Rate Announcement on April 6 — the payment-side companion to last week's policy final rule — establishing a 2.48 percent average payment increase and including targeted rate adjustments specific to Puerto Rico. The announcement triggered an immediate market response, with UnitedHealth Group stock rising more than 11 percent after the increase far exceeded analyst expectations.
CMS also issued guidance implementing new statutory limits on Medicaid and CHIP funding for certain noncitizens, effective October 1, 2026. HHS announced $135 million in nutrition and rural health workforce funding, and CMS launched the first wave of its HealthTech Ecosystem digital infrastructure initiative.
AGENCY ACTIVITY
2027 Medicare Advantage and Part D Rate Announcement
CMS released the 2027 Medicare Advantage (MA) and Part D Rate Announcement on April 6, establishing the payment framework for the upcoming plan year. The announcement is the payment-side complement to the policy final rule released last week and translates structural policy changes into the actual rate figures that govern plan revenue.
The expected average change in MA payments is 2.48 percent — equivalent to approximately $13 billion — driven by an effective growth rate of 5.33 percent. The increase was substantially above the roughly 1 percent that the market had anticipated; UnitedHealth Group stock rose more than 11 percent on the day of the announcement, with other major Medicare Advantage carriers seeing similar gains. The market reaction is a useful signal of how materially the final figure differed from expectations heading into the announcement.
On risk adjustment, CMS will not implement a new Part C model for 2027, instead continuing the 2024 model. The announcement tightens diagnosis coding rules by excluding diagnoses from audio-only visits and most unlinked chart reviews, with a limited exception for beneficiaries switching plans mid-year. For Part D, CMS updates the risk adjustment model using more recent data and Inflation Reduction Act policy changes, and improves accuracy by distinguishing between Medicare Advantage-Prescription Drug (MA-PD) plans and standalone Prescription Drug Plans (PDPs).
The announcement also accelerates alignment between Programs of All-Inclusive Care for the Elderly (PACE) and the MA risk model, using a 50/50 blend of the 2024 and 2017 models as a transitional step.
Puerto Rico Connection
The 2027 Rate Announcement includes payment adjustments specific to Puerto Rico. CMS is revising MA county rates in the territory to reflect the relatively higher costs of beneficiaries enrolled in both Medicare Parts A and B under Original Medicare, and is applying a correction for the historically high share of zero-claims enrollees — a factor that has historically distorted benchmark accuracy in Puerto Rico's market. These adjustments are designed to bring payment rates into closer alignment with actual healthcare utilization and costs on the island. With approximately 95 percent of Puerto Rico's Medicare beneficiaries enrolled in MA plans — the highest penetration rate in the nation — more accurate benchmark calculations have direct consequences for plan financial stability, provider payment capacity, and the sustainability of the healthcare system the island depends on.
CMS Issues Guidance on Medicaid and CHIP Funding Limits for Certain Noncitizens
CMS issued guidance on April 8 to help states implement new federal statutory limits on Medicaid and CHIP matching funds for certain noncitizen populations, with changes taking effect October 1, 2026. The guidance is tied to section 71109 of the Working Families Tax Cut legislation and outlines operational requirements for eligibility systems, applications, verification, and claims processing. CMS will provide technical assistance to ensure states correctly claim federal matching funds under the revised rules.
Exceptions remain in place, including continued federal funding for emergency medical conditions. States also retain flexibility to cover lawfully residing children and pregnant women. The guidance does not affect existing federal Medicaid commitments to U.S. citizens or lawfully present individuals, but it sets binding requirements for how states handle noncitizen eligibility determinations beginning this fall.
HHS Announces $135 Million for Nutrition Services and Rural Health Workforce
HHS announced more than $135 million in new funding opportunities on April 7. The larger allocation — $125 million — will support more than 350 Health Resources and Services Administration (HRSA)-supported health centers in integrating nutrition services and food-based interventions into primary care to address chronic diseases including obesity, heart disease, and diabetes. An additional $11.25 million will fund up to 15 rural residency programs, offering grants of up to $750,000 each to train physicians in high-need specialties and increase the likelihood they remain in rural communities after training. HRSA-supported centers currently serve 32.4 million patients across more than 16,000 sites nationwide.
CMS Launches First Wave of HealthTech Ecosystem
CMS launched the first wave of its HealthTech Ecosystem on April 9, introducing digital infrastructure, a Medicare App Library, and patient-facing tools to replace paper forms, fax-based workflows, and fragmented data systems across healthcare delivery. More than 700 organizations have pledged support, with more than 50 companies already contributing tools in the initial deployment. Key features include digital check-in and data sharing — framed by the administration as a "Kill the Clipboard" initiative — and personalized chronic disease management applications. The HealthTech initiative is one expression of the broader HHS technology consolidation announced last week and represents the early operational rollout of a multi-year digitization effort across patient-facing healthcare infrastructure.
OTHER DEVELOPMENTS
OPM Proposes Access to Medical Records for Federal Employees and Families
The Office of Personnel Management (OPM) is seeking regulatory authority to require the 65 insurance companies that cover more than 8 million Americans under the Federal Employees Health Benefits (FEHB) program — including federal workers, retirees, members of Congress, and their dependents — to submit monthly reports containing identifiable health data on their members. The proposal raises significant health data privacy questions that fall within the scope of the House Energy and Commerce Committee's jurisdiction over health information policy and HIPAA-adjacent oversight. Privacy advocates and some lawmakers have raised concerns about how the administration would use the data and what access controls would govern the collected records. No committee action has been taken as of the close of the reporting period.
LOOKING AHEAD
Health Subcommittee Hearing: Healthier America (April 15, 2026)
Chair Morgan Griffith (R-VA) and full committee Chair Brett Guthrie (R-KY) announced a legislative hearing titled "Healthier America: Legislative Proposals to Improve Public Health" for April 15 at 10:15 AM in 2123 Rayburn House Office Building. The hearing will examine bills spanning disease research and prevention, rural health, and access to care. Legislation on the docket includes:
Additional bills on the docket include the ALS Accelerating Access to Critical Therapies Reauthorization Act, the Nutrition Education and Chronic Disease Prevention in Community Health Centers Act, the Expanding Community Access to Health Services Act, and the Digital Health Screeners Act of 2026. The breadth of the legislative agenda signals a reauthorization-heavy phase for the subcommittee heading into spring.
On Our Radar
Ginnell Torres
Health Law Attorney
gtorres@mzls.com
Maceira Zayas Law
