HHS Budget Hearings, Medicare Fraud Review and PBM Reform Mark US Health Policy Week

US health policy developments this week included continued FY 2027 budget request hearings for the Department of Health and Human Services, a House Ways and Means Committee hearing on Medicare fraud, and bipartisan discussion of pharmacy benefit manager reform. President Trump also issued an executive order on accelerating mental illness treatments, and CMS and FDA announced the RAPID pathway, a new coverage pathway for breakthrough devices that will replace the Transitional Coverage for Emerging Technologies pathway.

HHS Secretary Kennedy testified before four congressional committees this week, for a total of seven HHS budget hearings since April 16, 2026. His testimony highlighted the department’s work on chronic diseases, most-favored nation drug pricing, and nutrition.

At the House Energy and Commerce Subcommittee on Health, Democrats criticized Secretary Kennedy’s response to the measles outbreak, stance on vaccines, large-scale cuts to Medicaid, and proposed elimination of programs at HHS. Republicans highlighted the administration’s efforts to prevent fraud, make the United States healthier, and increase transparency. Both Democrats and Republicans spoke in support of continuing to robustly fund biomedical research at the National Institutes of Health.

At the Senate Appropriations Subcommittee on Labor, HHS, Education, and Related Agencies, Democrats expressed concerns over Secretary Kennedy’s comments on vaccines, abortion access, and cuts to research funding for specific populations. Republicans expressed support for Secretary Kennedy’s promotion of unprocessed foods, raised concerns about the mental health impacts social media can have on youth, and wanted to find ways to promote program integrity in the 340B program. Democrats and Republicans urged Secretary Kennedy to continue funding the NIH, emphasizing its critical role in researching and curing chronic diseases.

At the Senate Finance Committee, Democrats criticized Secretary Kennedy’s response to the measles outbreak and his previous statements on vaccines, and called for transparency surrounding the deals made between the administration and pharmaceutical companies. Republicans spoke in support of the administration’s work to decrease fraud, increase transparency, and respond to emerging health threats.

At the Senate Health, Education, Labor, and Pensions Committee, Democrats and the chair criticized Secretary Kennedy’s stance on vaccines and emphasized the importance of continued NIH funding. Republicans expressed support for the Rural Health Transformation Program, urged Secretary Kennedy to take a stronger stance on abortion, and emphasized the need for the FDA to have sufficient resources to efficiently bring innovative treatments to market.

During the House Ways and Means Committee hearing on Medicare fraud, Democrats emphasized the importance of strong program oversight, expressing concern that budget and staffing cuts to inspectors general have weakened Medicare fraud prevention. Republicans called for removing the outdated pay-and-chase model by modernizing CMS’s fraud detection capabilities with advanced data analytics and artificial intelligence, and strengthening eligibility verification before payments are made. Witnesses offered solutions to improve program oversight at the state level, including leveraging technology, intensifying screening in high-risk geographies, and creating a federal pathway to better align fraud data.

On the same day, the Government Accountability Office published a report on CMS’s use of data analytics on claims in traditional Medicare to identify patterns indicative of fraud. The report noted that CMS began sharing information about Medicare provider payment suspensions with supplemental payers in December 2025. GAO stated that the previous lack of information sharing led some supplemental payers to pay beneficiary cost sharing on potentially fraudulent claims.

At the House Education and Workforce Subcommittee on Health, Employment, Labor, and Pensions, there was bipartisan agreement on the need to further reform PBMs. Democrats raised concerns that PBMs may be exploiting consumers through hidden fees, spread pricing, and kickbacks.