May 14, 2026

This marks a major escalation in the federal crackdown on Medicaid fraud, following similar actions against Minnesota earlier this year. States and health plans should watch California's response closely, as it will likely set the tone for federal-state negotiations on program integrity.

There is an emerging policy shift toward faster adoption of AI in healthcare through reduced regulatory barriers, while there are ongoing questions about how best to preserve safety, privacy, and oversight as use expands. This policy debate is a balance between encouraging innovation and maintaining safeguards for patients and clinicians.

During his time as FDA Chief, Makary advocated for initiatives aimed at accelerating drug development, including proposals to require only one pivotal clinical trial instead of the traditional two prior to product approval. However, his tenure was also marked by the resignation of several senior officials amid widespread staffing cuts. The agency additionally faced criticism over inconsistent regulatory guidance and unexpected approval rejections.

During the enrollment pause, CMS plans to expand targeted investigations of hospice and home health providers, implement advanced analytics to identify indicators of fraud, waste, and abuse, and accelerate the removal of providers suspected of fraudulent activity from the Medicare program. CMS is also reviewing state Medicaid programs, including Minnesota’s, where the agency withheld $250 million in funding over unsupported or potentially fraudulent claims.

Kaiser Permanente reported that worker strikes cost the nonprofit health system more than $1 billion in Q1 2026 and contributed to a 24% drop in operating income year over year. Rising labor and care costs pushed expenses up nearly 10% to $33.9 billion, lowering Kaiser’s operating margin from 2.9% to 2.1%, though membership growth and strong health plan enrollment helped support overall revenue growth to $34.6 billion.