As part of long-awaited guidance that CMS issued to states on Jan. 30 outlining how they can test-drive a fixed federal Medicaid budget and more program flexibilities, the Trump administration invited states to try out something else that hasn’t been done before: implement a closed drug formulary for a portion of their Medicaid population, AIS Health reported.

"For the first time, participating states will have more negotiating power to manage drug costs by adopting a formulary similar to those provided in the commercial market, with special protections for individuals with HIV and behavioral health conditions," CMS said in its press release unveiling the Healthy Adult Opportunity demonstration, which states can apply for via a Section 1115 Medicaid waiver.

On Jan. 31, CMS released the 2021 Notice of Benefit and Payment Parameters (NBPP), which is the annual omnibus regulation that outlines the rules of the game for Affordable Care Act (ACA) exchange plans. But that was only after a trade group for safety-net health plans sent a strongly worded letter warning the Trump administration that the clock is ticking for issuers to finalize their 2021 premiums and benefit designs.

In its Jan. 27 letter, the Association for Community Affiliated Plans (ACAP) complained to CMS that the proposed 2021 NBPP “appears to be stalled at the Office of Management and Budget.” (The OMB completed its review of the regulation on Jan. 29.) Insurers need to submit qualified health plan (QHP) applications starting in early May, ACAP pointed out. “Building in a minimum 30-day comment period in addition to 30 days for the Department to review, revise, and release the final [rule] would allow just one month for issuers to operationalize and implement necessary updates,” the group wrote. “This timeframe will not allow issuers sufficient time to prepare products and operations for Benefit Year 2021.”

With Medicaid demonstration programs that include work requirements struck down in three states, it's become increasingly clear that such waivers may not survive legal scrutiny. So Nebraska, which last month submitted its own Section 1115 waiver application, is trying a different tactic, AIS Health reported.

In its application to CMS, the state proposes to modify voter-approved Medicaid expansion by creating two tiers of coverage: Basic, which includes "comprehensive medical, behavioral health and prescription drug coverage" as required by federal law, and Prime, which is the Basic package plus vision, dental and over-the-counter medication coverage.

If Congress or the Trump administration are able to enact any type of drug-pricing reform during 2020, it’s likely to be a redesign of Medicare Part D, industry experts tell AIS Health.

In the Senate, tweaking the Part D benefit is part of a larger piece of bipartisan legislation (S. 2543), championed by Sens. Chuck Grassley (R-Iowa) and Ron Wyden (D-Ore.). From the House, there's the sweeping legislation (H.R. 3) proffered by Speaker Nancy Pelosi (D-Calif.).

Though the two major transactions that upended the PBM landscape — Cigna Corp. buying Express Scripts Holding Co. and CVS Health Corp. acquiring Aetna Inc. — have already taken place, that doesn't mean the sector won't see more changes this year, industry experts tell AIS Health.

"The market is evolving," says Brian Anderson, a principal with Milliman, Inc. The year 2020 will be marked by a presidential election and significant price pressure on manufacturers, along with pharmacies trying to retain their margin, he adds, "so it's going to be a really wild year."

For health insurers, there's a lot to like in a spending package passed by Congress to avoid a government shutdown.

One of the two measures that make up the $1.4 trillion spending package will completely repeal the long-reviled health insurer fee (HIF) starting in 2021, which will especially help insurers in the Medicare Advantage business. The legislation also includes two provisions to that could stabilize the Affordable Care Act exchanges by thwarting any attempts to ban silver loading or auto-reenrollment, AIS Health reported.

Diplomat Pharmacy, Inc., which has been in a tailspin amid mounting financial losses, agreed to a deal with UnitedHealth Group on Dec. 9 that will see the larger firm's OptumRx division purchase the midsized specialty pharmacy provider/PBM, AIS Health reported.

Diplomat's difficulties began to come into focus earlier this year, when the firm disclosed customer losses in its PBM business and "increased competitive pressure in the specialty market." In August, Diplomat said it was "reviewing strategic alternatives" to maximize shareholder value. Then on Dec. 9, UnitedHealth disclosed that it agreed to pay $4 per share for Diplomat's outstanding stock and assume its debt. Equities analysts noted that Diplomat's stock was trading at $5.81 as of market close on the Friday before the transaction was unveiled.