Bringing you the latest news impacting our network from Congress and the Administration.
In this Edition:
Fraud Prevention Efforts Expand Across CMS, Congress, and the White House
Housing Bill Advances to House Amid Key Disputes
House GOP Divided over Budget Reconciliation 2.0, Weighing “Fraud Prevention” Focus
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March 26, 1-2:15 PM ET: The Release of “Partnering for Impact Guide” Upcoming March Capitol Conversations Webinars
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What We Are Reading
Fraud Prevention Efforts Expand Across CMS, Congress, and the White House
Recent Congressional Action
Federal scrutiny of Medicaid fraud continues to intensify amidst CMS’s recent shift toward more aggressive enforcement efforts. On March 17, the House Energy and Commerce Oversight and Investigations Subcommittee held a contentious hearing examining CMS’s approach, including payment deferrals and investigations in states such as Minnesota, California, Maine, and New York. Republicans framed the actions as necessary oversight to protect taxpayer dollars. Conversely, Democrats argued the focus on fraud disproportionately targets blue states and is a distraction from deep Medicaid cuts enacted last year. Kim Brandt, Deputy Administrator and Chief Operating Officer at CMS, testified, noting that CMS is moving “from reactive detection to proactive prevention.”
Let's Go Deeper
A new Kaiser Family Foundation (KFF) issue brief provides more context based on these recent developments, noting that CMS is increasingly acting on suspected fraud rather than confirmed findings—a departure from longstanding practice. KFF emphasizes that most improper Medicaid payments historically stem from administrative and eligibility issues, not intentional fraud, and warns that this policy shift could create significant fiscal uncertainty for states, providers, and enrollees if large shares of federal funding are put at risk before disputes are resolved.
The Latest
The administrative and legislative committee actions noted above are unfolding alongside a broader, governmentwide push from the White House. On March 16, President Trump issued a new executive order establishing a Task Force to Eliminate Fraud. The task force is charged with coordinating federal efforts to combat fraud, waste, and abuse across benefit programs including Medicaid, housing, food assistance, and cash aid.
Why Is This Important?
The expanding focus on fraud has real implications beyond headlines. If government officials take action based on suspected fraud—rather than confirmed findings—this raises the risk that states could face major funding disruptions tied to documentation or administrative errors rather than purposeful wrongdoing. For providers, delayed or withheld payments can strain operations and service delivery. For beneficiaries, these policies may threaten access to care if states and providers respond by scaling back participation or services. As federal scrutiny deepens, the stakes are rising. The tension is growing between program integrity efforts aimed at protecting taxpayer dollars and access to Medicaid coverage and care for eligible individuals.
Housing Bill Advances to House Amid Key Disputes
Recent Senate Action
A major bipartisan housing package is nearing final action on Capitol Hill. Earlier this month, the Senate passed the “21st Century ROAD to Housing Act” by an overwhelming 89–10 vote, sending it to the House for consideration. The bill merges the House-passed “Housing for the 21st Century Act” with the Senate’s “ROAD to Housing act” and has the backing of the Trump administration, which has indicated the president will sign it if it reaches his desk.
Complicating Factors
Despite overall broad support for the bill, two provisions are complicating House consideration:
First, a provision specifically added to the bill at the President’s request would restrict large institutional investors from purchasing single-family homes while also requiring certain properties to be sold to owner-occupants within seven years. Supporters say this approach protects buyers, but critics warn it could slow production of new housing supply.
Second, and perhaps more controversial, is a provision temporarily banning the Federal Reserve from issuing central bank digital currency (CBDC) through the end of 2030. Some House conservatives argue the ban must be permanent and have threatened to oppose the bill unless it is strengthened—potentially putting the broader housing package at risk.
What Happens Now?
House leaders face a difficult choice between passing the Senate bill unchanged; amending it and risking the loss of Senate support; or sending it to a conference committee of House and Senate negotiators which would reopen the entire deal. For now, House negotiations continue, with the bill’s widely popular housing reforms hanging in the balance.
House GOP Divided over Budget Reconciliation 2.0, Weighing “Fraud Prevention” Focus
Fraud Prevention in a Second Budget Bill?
No clear consensus has emerged on whether there will be a second budget reconciliation bill. House Budget Chair Jodey Arrington (R-TX) is signaling that any second Republican reconciliation bill this year would prioritize what he calls “fraud prevention” in federal safety net programs, including Medicaid. Arrington has expressed interest in reviving Medicaid cuts that were dropped from last year’s GOP megabill and argues that states should shoulder more responsibility for administering benefits. The renewed focus comes despite lingering political fallout from last year’s Medicaid and SNAP cuts ahead of the November midterm elections.
Go or No Go?
At the same time, GOP leaders remain divided over whether a second reconciliation package is feasible. Some Republicans see a potential supplemental Pentagon funding request—tied to U.S. military operations against Iran—as a way to generate urgency for another bill. Meanwhile, fiscal hawks are demanding clear offsets and “no blank checks” in any second budget reconciliation package, while moderates and members from competitive districts are urging caution, warning that further cuts to safety net programs could carry significant political risk.
A Cloudy Outlook
With a one-vote House Republican majority and limited enthusiasm from Senate Republicans, the path forward remains uncertain. While Arrington and other conservatives continue to press for another party line package, skeptics within the conference question whether there is enough consensus—or presidential engagement—to move a second megabill before the midterms.
Upcoming March Capitol Conversations Webinar
March 26, 1-2:15 PM ET: Launch Webinar for the Release of "Partnering for Impact Guide"
Join us for a special edition of Capitol Conversations as we launch our new "Partnering for Impact Guide". Amidst a rapidly changing Medicaid landscape, the guide highlights key strategies for action to strengthen partnership of social service organizations (SSOs) with Medicaid and Medicaid Managed Care Organizations. We will be joined by thought leaders and experts including:
Lutheran Services in America network leaders, including Héctor Colón, President & CEO of LSS Wisconsin, and Mark Stutrud, President of LSS Illinois.
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