Why It Matters
The House Energy and Commerce Subcommittee on Health examined 17 bills addressing Medicare payment reform and cybersecurity on September 15, as healthcare providers face mounting pressure from payment cuts and ransomware threats. While Republicans and Democrats agree that Medicare’s payment system needs modernization, they disagree sharply on how far to go, with Democrats warning that administration policies are driving providers toward closures and forcing millions off insurance rolls.
The hearing featured six witnesses representing physician organizations, pharmacies, cybersecurity leaders and patient advocates.
The Big Picture
Congress has grappled with Medicare physician payment reform for over a decade. A Senate Finance Committee hearing in 2019 examined MACRA implementation and the road ahead, and the House Ways and Means Committee held hearings on the law’s effects in 2016. The issue has become urgent, with physicians facing a 2.5 percent cut on their professional work component under the finalized 2026 Medicare Physician Fee Schedule.
The healthcare sector also confronts an escalating cybersecurity crisis. The 2024 Change Healthcare ransomware attack disrupted claims processing for approximately 94 percent of U.S. hospitals. In the first quarter of 2026 alone, healthcare organizations recorded 120 ransomware attacks with average ransom demands surging to $16.9 million, up from $577,800 the prior quarter. According to data presented at the hearing, 67 percent of healthcare organizations were hit by ransomware in 2026, and average breach costs reached $7.42 million.
The Senate HELP Committee voted 22-1 on February 26, 2026, to advance the Health Care Cybersecurity and Resiliency Act of 2026, sponsored by Senator Bill Cassidy. The House hearing examined that bill alongside companion legislation and multiple payment reform proposals.
What They’re Saying
The hearing revealed competing visions for healthcare’s future. On payment reform, witnesses emphasized the urgency of action. “Medicare physician payments have declined approximately 29 percent in real terms since 2001 when adjusted for inflation,” according to testimony from Murad Alam of the American Academy of Dermatology Association. Alam called for permanent elimination of the PAYGO sequester cuts and urged Congress to reform the budget neutrality requirement that forces CMS to cut payments in one area to increase them in another.
Rebecca Andrews from the American College of Physicians backed two bills—the Patients First Act and the Promoting Fairness for Medicare Providers Act—which would provide positive payment updates. She supported the Access to Claims Data Act, which would improve physician access to Medicare claims data to enable better performance measurement and care coordination.
On cybersecurity, Greg Garcia from the Healthcare and Public Health Sector Coordinating Council emphasized the scale of the threat. Healthcare is the most targeted critical infrastructure sector for ransomware attacks, he noted. Small and rural hospitals often operate with no dedicated cybersecurity staff and budgets insufficient to meet even basic security hygiene requirements. Garcia supported both the Health Care Cybersecurity and Resiliency Act and the Rural Hospital Cybersecurity Enhancement Act, calling for mandatory cybersecurity performance goals to be codified into law, moving beyond the current voluntary framework. Garcia urged Congress to ensure HHS has adequate resources and authority to enforce standards and coordinate with CISA and other federal agencies.
Anthony Pudlo from the Tennessee Pharmacists Association highlighted pharmacy access challenges. In rural Tennessee, pharmacies are often the only healthcare provider within 30 or more miles for many patients. Pudlo supported the Ensuring Community Access to Pharmacist Services Act, which would allow pharmacists to be recognized as Medicare providers for specified clinical services. Pudlo called for PBM reform to address spread pricing and ensure pharmacies are reimbursed at fair rates, and for elimination of gag clauses that prevent pharmacists from telling patients about lower-cost alternatives.
Rep. Diana DeGette (D-CO) stated that an estimated 15 million people will lose access to health care due to cuts to Medicaid and the expiration of Affordable Care Act enhanced premium tax credits. She argued that when more people are uninsured and underinsured, it drives up costs for uncompensated care throughout the system. DeGette noted that providers across the country have begun to lay off staff, reduce health care services, and close their doors due to increasing uncompensated care costs.
Dr. Eilean Attwood, an OB-GYN affiliated with Baystate Medical Center in Springfield, Massachusetts, testified that nearly 150 rural hospitals have stopped or plan to stop providing obstetric services between 2020 and the end of 2026. She described fielding obstetric emergency transfer calls, including one the weekend before the hearing. The Rural Obstetrics Readiness Act aims to help prepare rural hospitals and practitioners for obstetric emergencies.
Political Stakes
The hearing reflects broader disagreements over federal health care policy. Republicans control both chambers of Congress, with Rep. Mike Johnson (R-LA) serving as House speaker and Sen. John Thune (R-SD) as Senate majority leader. Reps. John Joyce (R-PA) and Kim Schrier (D-WA) introduced H.R. 9693, the Patients First Act. Reps. Greg Murphy (R-NC) and Brad Schneider (D-IL) introduced H.R. 8163, the Provider Reimbursement Stability Act. The American Medical Association backed the Provider Reimbursement Stability Act, while the American College of Physicians endorsed the Patients First Act.
Democrats used the hearing to highlight what they view as administration policies undermining healthcare access. DeGette’s warnings about Medicaid cuts and insurance coverage losses set up a contrast with Republican efforts to stabilize provider payments. For providers, the stakes are immediate: Congress will need to consider a potential doc fix by the end of 2026 to prevent further payment reductions.
While cybersecurity bills align with calls for stronger protections, payment reform bills could conflict with budget constraints. A coalition of hospital and provider associations had asked HHS to withdraw or substantially narrow a proposed cybersecurity rule, citing implementation costs and compressed timelines that would fall hardest on rural hospitals and small physician practices. As of mid-2026, no final cybersecurity rule had been issued by HHS.
The Other Side
Rural and small providers face particular pressure from payment uncertainty and regulatory complexity. Hospital and provider associations cited implementation costs and compressed timelines as reasons for asking HHS to withdraw or narrow the proposed cybersecurity rule, arguing these would fall hardest on rural hospitals, small physician practices, and other under-resourced providers. The American Hospital Association expressed strong support for the Rural Hospital Cybersecurity Enhancement Act.
Congress has already moved on one front: PBM reform legislation was enacted in early 2026, including delinking PBM compensation from the price of drugs or rebates under Medicare Part D. That law aimed at greater transparency and increased pharmacy access. Still, witnesses argued more must be done.
The Bottom Line
Chairman Griffith stated after the hearing that it “furthered our efforts in finding ways to improve the Medicare payment system, provide greater stability for health care providers across the country, and expand access to resources to help combat growing cybersecurity threats.”
The full Energy and Commerce Committee began a markup July 20 and continued it July 21, advancing 17 bills to the House, including the Lower Costs, More Transparency Act.
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