I agree with Thema. Change some things in his diet. Free choice, or as close to free choice hay as you can do is of course best. Nothing can replace that. As for the cup of hay pellets, either forgo them all together or add more, a cup will not do anything one way or another. Look at adding alfalfa in any form. Hay, cubed or pellets. I would replace the 1 cup hay pellets with 3 quarts of alfalfa pellets if he were mine. Also seconding the feed change, loose the oats and get him onto a good quality low sugar pelleted feed or senior feed.
You can try adding in some rice bran, BOSS, a cup of corn oil etc.. for more fat if you need to. I would think that you'd see some great results with more HAY, some alfalfa pellets and a switch from oats to a senior feed though.