Washington Watch: Health Week of March 16, 2026 | House Energy & Commerce Committee | Vol. 1, Issue 6

‍THIS WEEK AT A GLANCE

CMS advanced its Medicare fraud prevention strategy this week, with Deputy Administrator Kim Brandt testifying before the Oversight and Investigations Subcommittee on the agency’s shift from a “pay and chase” model to an AI-driven “caught and stopped” approach. At the Health Subcommittee, five major provider organizations testified on the drivers of healthcare cost growth, with hospital labor costs, physician payment erosion, and anticompetitive consolidation emerging as the central themes.

On the agency front, all manufacturers of the 15 drugs selected for Medicare’s third negotiation cycle — plus one drug flagged for renegotiation — agreed to participate, with negotiated prices set for 2028. CMS also released nearly five years of data on the Acute Hospital Care at Home program, now extended through 2030, and convened the first Rural Health Transformation Summit tied to the $50 billion Rural Health Transformation Program. Resident Commissioner Hernandez announced $1.3 million in HRSA funding for maternal and child health services in Puerto Rico.

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HEALTH SUBCOMMITTEE HEARING

Lowering Health Care Costs for All Americans: An Examination of the U.S. Provider Landscape

Date: March 18, 2026  |  Rayburn 2123, 10:15 AM ET

Chair: Rep. Morgan Griffith (R-VA)  |  Ranking Member: Rep. Diana DeGette (D-CO)

The Health Subcommittee held its third hearing in the “Lowering Health Care Costs for All Americans” series, focusing on the role of hospital and physician providers in driving healthcare spending. Five major national organizations testified. The dominant themes were provider payment adequacy, administrative burden, and the cost effects of hospital consolidation.

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Richard Pollack, President & CEO, American Hospital Association: 

• Hospitals are under severe cost pressure: labor accounts for 60% of expenses, and double-digit increases in supply and drug costs compound the strain.
• Medicare reimbursement margins have fallen to -12%, meaning hospitals lose money on the majority of Medicare patients.
• Urged Congress to reject site-neutral payment cuts and protect the 340B Drug Pricing Program.

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David Aizuss, MD, Chair, AMA Board of Trustees: 

• Medicare physician payments have declined 33% in inflation-adjusted terms since 2001, forcing independent practices into financially untenable positions.
• Market consolidation is creating “health care deserts” and pushing patients toward more expensive care settings.
• Recommended permanent, inflation-adjusted payment updates tied to the Medicare Economic Index.

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R. Shawn Martin, Executive VP & CEO, American Academy of Family Physicians: 

• Primary care receives less than 7% of total U.S. health spending, contributing to a decade-high number of Americans without a regular physician.
• Underinvestment in primary care drives patients to delay treatment for chronic conditions until they require costly emergency care.
• Recommended shifting toward prospective, population-based payment models.

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Elizabeth Mitchell, President & CEO, Purchaser Business Group on Health: 

• The annual cost of health benefits for a single American family has exceeded $35,000, driven by anticompetitive hospital consolidation and vertical integration.
• Transparency data shows no correlation between high hospital prices and quality of care. “Upcoding” and restrictive contracting allow dominant systems to extract inflated payments.
• Recommended mandatory price transparency, site-neutral payment reforms, and a ban on anticompetitive contracting clauses.

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Anthony DiGiorgio, DO, MHA, Neurosurgeon, UCSF Health: 

• Hospital consolidation functions as a “tax on wages” by diverting compensation into rising insurance premiums.
• Federal policy creates an unlevel playing field by paying significantly more for identical outpatient services performed in hospital-owned facilities vs. independent offices.
• Recommended enacting site-neutral payments and repealing restrictions on physician-owned hospitals.

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Puerto Rico Connection: The hearing’s dominant themes map directly onto Puerto Rico’s healthcare cost landscape. The island’s hospitals already operate at negative Medicare margins, its physician workforce has been decimated by emigration, and primary care infrastructure is thin relative to the population’s chronic disease burden. Any federal legislation that emerges from this series — whether on site-neutral payments, physician payment updates, or administrative simplification — will have direct financial consequences for Puerto Rico’s providers and health system.

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Oversight & Investigations Subcommittee: CMS Fraud Prevention — March 17, 2026

Date: March 17, 2026  |  Rayburn 2123, 2:00 PM ET

Deputy CMS Administrator and COO Kim Brandt testified before the Oversight and Investigations Subcommittee on the agency’s progress in combatting Medicare and Medicaid fraud. While not a Health Subcommittee hearing, it is directly relevant to CMS oversight priorities. Key points from Brandt’s testimony:

• CMS is transitioning from a reactive “pay and chase” model — in which fraudulent payments are made and recovered after the fact — to a proactive “caught and stopped” approach that intercepts suspicious billing before funds are disbursed.
• The agency’s Fraud Defense Operations Center uses AI, machine learning, and advanced data analytics to identify suspicious billing patterns in real time.
• Brandt recommended strengthening provider enrollment screening, expanding risk-based oversight in high-vulnerability sectors such as hospice and durable medical equipment, and deepening collaboration with state and law enforcement partners.

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AGENCY WATCH: CMS

All Manufacturers Agree to Participate in Medicare’s Third Drug Negotiation Cycle

Date: March 13, 2026

CMS announced that manufacturers of all 15 drugs selected for the third cycle of the Medicare Drug Price Negotiation Program have agreed to participate, along with the manufacturer of the one drug selected for renegotiation — bringing the total to 16 participants. Negotiations will occur throughout 2026, with any negotiated prices taking effect January 1, 2028. The drugs span HIV, cancer, autoimmune and inflammatory diseases, diabetes, respiratory conditions, and psychiatry. Key upcoming milestones:

• June 1, 2026: CMS sends initial price offers to manufacturers.
• Summer/Fall 2026: Negotiation meetings and counteroffers.
• November 1, 2026: Negotiation period closes.
• January 1, 2028: Negotiated prices take effect for Medicare beneficiaries.

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Puerto Rico Connection: Puerto Rico’s Medicare population is substantial and disproportionately reliant on high-cost drugs due to the island’s chronic disease burden. Any price reductions negotiated in this cycle will benefit Puerto Rico’s Medicare beneficiaries directly when they take effect in 2028. The inclusion of Part B drugs — physician-administered drugs covered in outpatient settings — for the first time in this cycle is particularly relevant for the island’s oncology and specialty care providers.

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CMS Releases Nearly Five Years of Acute Hospital Care at Home Data

Date: March 17, 2026

CMS released a second tranche of data from the Acute Hospital Care at Home (AHCAH) initiative, covering April 2023 through September 2025. Combined with the initial data release, researchers now have access to nearly five years of performance data (November 2020 to September 2025) on this COVID-era program, which allows Medicare-certified hospitals to treat patients at inpatient-level care in their homes by waiving certain nursing and physical environment requirements. The program has been extended through 2030 and represents the first Medicare Fee-for-Service and non-managed-care Medicaid payment model for this level of home-based acute care.

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CMS Convenes First Rural Health Transformation Summit

Date: March 19, 2026

CMS convened officials from all 50 states for the first Rural Health Transformation Summit, organized by the newly created Office of Rural Health Transformation (ORHT) — the first dedicated rural health office within CMS. The summit is tied to the $50 billion Rural Health Transformation Program. A recurring theme was the need to embed new initiatives into durable financing structures, particularly alignment with Medicaid and Medicare payment models and expansion of rural residency programs. The summit launched an ongoing learning collaborative to connect states and share best practices beyond the one-time meeting.

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OTHER DEVELOPMENTS

HRSA Awards $1.3 Million for Maternal and Child Health Services in Puerto Rico

Resident Commissioner Pablo José Hernández announced that the Health Resources and Services Administration (HRSA) has awarded $1.3 million in federal funding to strengthen maternal and child health services in Puerto Rico. The funding is consistent with HRSA’s Title V Maternal and Child Health Block Grant program, which supports preventive and primary care for mothers, children, and families, including children with special healthcare needs.

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LOOKING AHEAD

No Health Subcommittee hearings have been announced for the week of March 23. We will monitor for scheduling updates.

On Our Radar:

• PR Medicaid funding: Congressional and CMS activity on the island’s Medicaid cap and federal funding equity.
• SAMHSA grant NOFOs (CMHI, Zero Suicide, AOT): Application deadlines and Puerto Rico’s pursuit of funding through ASSMCA.
• CMS FY2025–2028 Roadmap implementation: Guidance on AI-supported quality measures and their application to Puerto Rico’s hospitals and long-term care facilities.

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CONTACT

For questions or more information regarding this and other health topics contact Ginnell Torres, Health Law Attorney

gtorres@mzls.com

Maceira Zayas Law & Strategy

© 2026 Maceira Zayas Law. All rights reserved. This briefing is provided for informational purposes only and does not constitute legal advice.

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