House Republicans Launch Inquiry into Medicaid Program Integrity in 10 States

Republican leaders of the House Energy and Commerce Committee sent letters to 10 states requesting information on how they are addressing waste, fraud, and abuse in their Medicaid programs. The letters ask states to provide details on program integrity efforts, including provider screening, fraud investigations, and Medicaid audit activity. Lawmakers cited several recent fraud cases involving services such as non-emergency medical transportation, home health care, and adult day care programs as examples of vulnerabilities. The inquiry is part of a broader congressional effort to assess potential weaknesses in state Medicaid programs and strengthen oversight (Health Payer Specialist, March 9; Energy and Commerce, March 5).

Congressional Democrats Request Clarity from Trump Administration on Most Favored Nation (MFN) Agreements, CMS Drug Pricing Models

On March 5, several senior Congressional Democrats representing both chambers sent a letter to President Trump requesting the release of unredacted most favored nation (MFN) drug pricing agreements between the administration and pharmaceutical companies. This letter follows a previous request sent to HHS Secretary Kennedy that went unanswered. Moreover, two of the 16 companies that were listed as agreeing to the MFN deals, Pfizer and Eli Lilly, have indicated that the deals have not yet been finalized in their recent SEC filings. The SEC filings from two additional manufacturers in the group reveal that the MFN deals are only set to last three years. Separately, a smaller group of Congressional Democrats sent another letter to Secretary Kennedy on March 5 asking for details on new drug pricing models in the CMS Innovation Center. The Global Benchmark for Efficient Drug Pricing (GLOBE), Guarding U.S. Medicare Against Rising Drug Costs (GUARD) and Generating Cost Reductions for U.S. Medicaid (GENEROUS) models all bring new, negotiated drug pricing agreements to Medicare and Medicaid. In the letter, lawmakers highlight a potential weak point of the models in that drug manufacturers that have agreements with the White House to implement MFN pricing are exempt from model participation. It remains unclear if the MFN deal participants will participate in the models. However, both the deals and CMS models remain on rocky ground. A consumer advocacy group filed suit against the Trump administration for keeping details of the MFN agreements from the public while the pharmaceutical industry is an outspoken critic of the CMS Innovation drug pricing models and questions their legality (Inside Health Policy, March 5; Inside Health Policy, March 5).

CMS Sends State Medicaid Directors Letters About Eligibility Check Options

On March 6, CMS sent a letter to state Medicaid directors outlining the changes to eligibility redetermination required by § 71107 of H.R. 1. In the letter CMS provides states with two options for compliance. The first is to immediately transition to six-month redetermination for expansion populations and postpone the previously scheduled 2027 redetermination date. Alternatively, states may maintain the 2027 renewal schedule and switch beneficiaries to a six-month renewal following successful redetermination. CMS plans to release additional guidance later in the year on how states can implement Medicaid work requirements (Inside Health Policy, March 6).

March 2026 MAPAC Meeting

• Exploring the Role of the State Medicaid Agency in the Program of All-Inclusive Care for the Elderly: Interview Findings
  • MACPAC staff reviewed findings from stakeholder interviews on how state Medicaid agencies oversee the Program of All-Inclusive Care for the Elderly (PACE). Interviews with state and federal officials found that while states have sufficient authority to oversee PACE organizations, approaches vary widely depending on state capacity and interpretation of federal guidance. States use a mix of oversight tools including audits, reporting requirements, and provider manuals, while often relying on data submitted through CMS systems to monitor performance. However, interviewees noted challenges including limited state and federal resources, lack of standardized quality measures, and unclear divisions of oversight responsibilities between CMS and states. MACPAC staff plan to return in April with potential policy options for improving oversight and coordination.

• Mandatory and Optional Enrollment and Spending in Medicaid
  • MACPAC staff presented an updated analysis of mandatory and optional Medicaid enrollment and spending using FY2023 data. This analysis updates the Commission’s prior work from June 2017. Most Medicaid enrollment and spending is associated with mandatory populations and services, whereas optional spending was associated with specific areas like home- and community-based services and prescription drugs. MACPAC researchers also found that spending patterns varied by eligibility group, particularly for the aged and disabled populations.

• Children and Youth with Special Health Care Needs (CYSHCN) Transitions to Adult Coverage: Draft Recommendations
  • MACPAC staff presented six draft policy recommendations to address the challenges CYSHCN face when transitioning from pediatric to adult coverage under Medicaid. These policy options incorporate Commissioner feedback from the January 2026 meeting. The recommendations are as follows: require states to provide advanced notice of redetermination; institute a 30-day minimum response time for documentation to the state; CMS to work with the Social Security Administration’s notices about Supplemental Security Income loss to detail Medicaid implications; require states to adopt the state option for Medicaid coverage for CYSHCN that are not otherwise covered; Congress to amend federal law to implement 12-month continuous eligibility for CYSHCN; and CMS to issue guidance to states on transition support best practices.

• Appropriate Access to Residential Services for Children and Youth with Behavioral Health Needs: Draft Policy Options
  • MACPAC staff presented three draft policy options to Commissioners to address access to residential treatment services for youth with behavioral health needs. These include having Health and Human Services develop and maintain a directory of youth residential treatment facilities; CMS to report on the use of residential treatment services; and revising federal regulations to establish minimum requirements for the discharge planning process to mandate that families and caretakers are involved.

• Provider Enrollment and Credentialing in Medicaid
  • MACPAC reviewed a draft chapter on Medicaid provider enrollment and credentialing, which are processes used to ensure providers are qualified to serve Medicaid enrollees and to protect the program from fraud, waste, and abuse. Federal rules require states to screen providers based on risk level, collect ownership and disclosure information, and revalidate enrollment at least every five years, while providers participating in managed care must also complete credentialing with managed care organizations. The presentation highlighted variation across states in enrollment and credentialing requirements, including differences in screening practices, credentialing structures, and policies for provider types such as doulas, community health workers, and peer support specialists. Commissioners also discussed challenges related to administrative complexity, duplicative screening requirements, and barriers for out-of-state or nontraditional providers. MACPAC staff will revise the draft chapter based on commissioner feedback for inclusion in the June 2026 report.

• Highlights from the 2025 Edition of MACStats
  • MACPAC reviewed highlights from the February 2026 edition of MACStats, which compiles national and state-level data on Medicaid and CHIP enrollment, spending, eligibility, and access to care. The data show that more than 31 percent of the U.S. population was enrolled in Medicaid or CHIP for at least part of fiscal year 2024, including about 98.7 million Medicaid enrollees and 9.2 million CHIP enrollees. The presentation noted that nearly three-quarters of Medicaid beneficiaries are enrolled in managed care and that capitation payments account for over half of Medicaid benefit spending. It also highlighted that the Medicaid expansion adult group represents about one quarter of program enrollment and spending, and that drug rebates significantly reduce gross prescription drug spending. MACPAC also reviewed data on eligibility thresholds, beneficiary health status, and access to care, noting that children with Medicaid or CHIP coverage are as likely as privately insured children to have a doctor visit but are somewhat less likely to report excellent health or a usual source of care.

• Automation in the Medicaid Prior Authorization Process: Policy Options – MACPAC
  • MACPAC presented findings from their literature review, federal policies, and stakeholder interviews on the role of artificial intelligence in Medicaid prior authorization (PA) processes for managed care and fee-for-service systems. While most states and managed care plans utilize automation in Medicaid PA, virtually all report that they do not utilize AI in final clinical decision making, with some states having passed legislation to regulate payers’ usage of such in care decisions or established formal governance structures.
  • MACPAC staff presented four draft policy options for potential inclusion in the June MACPAC report including: issuing guidance clarifying clinical expertise must be involved in review and approval of adverse authorization decisions, amend regulations to require FFS UM program adverse decisions must be made by a human with appropriate clinical expertise, issue guidance to states recommending oversight of Medicaid MCOs’ use of automation tools and recommend that state’s require PA automation transparency in their managed care contracts.

• State and Federal Tools for Ensuring Accountability of Medicaid Managed Care Plans: Draft Recommendations – MACPAC
  • MACPAC reviewed key findings of their analysis of PY2023 Managed Care Program Annual Reports (MCPARs) from 34 states and stakeholder interviews. Staff concluded that MCPAR reporting is both inconsistent and incomplete and that states need better tools and guidance to effectively assess plan performance across state lines. MACPAC has drafted two policy recommendations for CMS, asking the agency to provide guidance on accountability actions that should be reported in MCPARs and for the development of a publicly available national database that allows states to oversee MCO data.