The firm alerted its clients on Wall Street 30 minutes later, prompting a surge in health insurance stocks.
Less than an hour after that, the Centers for Medicare and Medicaid Services (CMS) announced its decision to abandon the proposed cut, which had been fiercely opposed by insurers.
The case has prompted criticism of political intelligence firms, which can easily trigger movement in the stock market using insider information but are not required to register or publicly disclose their lobbying work.
Grassley has launched a probe of what happened on April 1. Several days later, he wrote to CMS chief Marilyn Tavenner asking who knew, and when, that the MA cut would not go forward.
The Securities and Exchange Commission is also looking into the matter, according to the Wall Street Journal.
The paper said that Hayes declined to comment. Both his lobbying firm, Greenberg Traurig, and Height Securities denied that he had received "material nonpublic information" from government sources.
Hayes worked for the Senate Finance Committee between 2002 and 2010 and was Grassley's top healthcare aide for several years.