MCO Associations Recommend Steps for CMS to Support OBBBA Implementation

On November 3, 2025, the Medicaid Health Plans of America (MHPA) and the Association for Community Affiliated Plans (ACAP) sent a joint letter to Centers for Medicare & Medicaid Services (CMS) Administrator Mehmet Oz outlining key considerations for implementing the One Big Beautiful Bill Act (OBBBA), particularly its community engagement (work) requirements. The groups thanked CMS for its collaboration and asked the agency to clarify that while Managed Care Organizations (MCOs) cannot serve as compliance entities, they should still be able to educate members and connect them with resources. They also urged CMS to maintain flexibility under the Telephone Consumer Protection Act (TCPA) so plans can continue using calls, texts, and emails for outreach. Other priorities include setting clear definitions for medically frail and substance use disorder populations, improving data sharing between Social Security Administration (SSA), CMS, and states, and allowing self-attestations to make compliance easier for seasonal workers. The letter also noted the need for technical assistance and federal matching funds to help states and counties manage new administrative demands, extensions for states making good-faith efforts toward compliance, and quarterly capitation rate reviews to address churn and rate pressures (MHPA, November 3).

Court Orders Emergency Funding to Keep SNAP Benefits Flowing

Two federal judges have ordered the Trump administration to use its $4.65B emergency fund to continue Supplemental Nutrition Assistance Program (SNAP) payments amid a prolonged government shutdown. The fund, however, covers only about half of the $9B needed for November benefits. Judges John McConnell and Indira Talwani ruled that the administration must exhaust available resources before cutting off aid, but USDA officials say they will not tap other accounts, such as the Section 32 Child Nutrition Program, calling it too risky. Patrick Penn, who oversees SNAP at USDA, warned that recalculating reduced benefits will cause significant delays, potentially leaving many households without food assistance for weeks or months. The lapse has become a major symbol of the shutdown, now entering its sixth week. Democratic-led states, cities, and advocacy groups have sued the administration to secure full benefits. Skye Perryman of the Democracy Forward Foundation said her organization is exploring further legal action to ensure families receive the aid Congress authorized. The administration maintains that emergency funds are reserved for natural disasters, not shutdown-related shortfalls (The Hill, November 3).

HRSA Announces Participants of New 340B Pilot Program

Earlier this year, the Trump administration announced the 340B Rebate Model Pilot Program, in which pharmaceutical companies can offer rebates on certain drugs to hospitals that participate in the program. On October 31, the Health Resources and Services Administration (HRSA) announced the eight approved drugmakers for the program: Bristol Myers Squibb, Immunex, Johnson & Johnson, Novo Nordisk, Merck, Pharmacyclics, Boehringer, Janssen Biotech, Janssen Pharmaceuticals, and Astra Zeneca. The drugmakers have their most prescribed drugs, such as Eliquis and Jardiance, available through the rebate pilot program. The manufacturers and the administration aim to address fraud and abuse concerns in the long-running 340B program, which aims to improve the affordability of drugs for low-income providers. Starting January 1, 2026, 340B providers will request rebates on the drugs after they are dispensed to eligible patients, deviating from the current practice in which 340B providers receive a discount at the point of sale for wholesale drugs. The 340B providers will also be subject to increased scrutiny to ensure a dispensed drug’s eligibility for the program. Hospitals are strongly opposed to the new 340 pilot program, arguing that the drugmakers have an incentive to decline otherwise valid rebates as well as placing a larger administrative burden on providers (Healthcare Dive, October 31; HRSA, October 31).

GOP Revives ACA Cost-Sharing Payment Proposal

House Republicans are again considering restoring federal payments to insurers for Affordable Care Act (ACA) cost-sharing reductions (CSRs), which would replace the “silver loading” system created after the Trump administration stopped payments in 2017. The policy could produce significant savings—about $30B over ten years according to the Congressional Research Service, or up to $50B per the Committee for a Responsible Federal Budget—but bipartisan agreement is unlikely. The plan, previously removed from a GOP reconciliation bill, would also block payments to plans covering elective abortions, violating Senate rules. Democrats favor keeping silver loading because it expands subsidies and coverage, while GOP leaders like Steve Scalise continue to push for direct CSR payments (Inside Health Policy, October 31).

PBM Reform Push Continues After Express Scripts Move

Lawmakers from both parties say Cigna’s Express Scripts decision to replace drug rebates with upfront discounts for commercial health plans does not remove the need for congressional action on pharmacy benefit managers (PBMs). Senator Chuck Grassley (R-IA) and Representative Buddy Carter (R-GA) welcomed the change, but said legislation is still needed to make the system more transparent and prevent PBMs from manipulating drug prices. President Trump and top health officials, including HHS Secretary Robert F. Kennedy Jr. and CMS Administrator Dr. Mehmet Oz, also supported Express Scripts’ move. Still, lawmakers pointed out that the company’s plan doesn’t cover Medicare or Medicaid and doesn’t address all the issues Congress is targeting. Bipartisan PBM bills would require more disclosure of drug pricing, limit “spread pricing,” and rein in rebates that reward high-cost drugs. Senators James Lankford (R-OK), Peter Welch (D-VT), and Ron Wyden (D-OR) said recent industry changes show PBMs are responding to pressure from Congress, but they remain skeptical (Modern Healthcare, October 30).

States Told to Review Medicaid Eligibility Under New Federal Immigration Directive

The Trump administration has instructed states to review the immigration status of some Medicaid enrollees, a move federal officials say is aimed at preventing benefits from going to people who are not legally eligible. CMS Administrator Dr. Mehmet Oz said billions in Medicaid funds may have been used for ineligible individuals, but several states disputed those claims, calling the data inaccurate or preliminary. The directive requires states to verify names provided by CMS, adding administrative pressure to Medicaid agencies already managing major policy changes. Advocates and researchers warned that the checks could cause eligible residents to lose coverage if they miss verification deadlines. States emphasized that they already confirm immigration or citizenship status through existing federal databases. The effort expands the administration’s broader immigration enforcement agenda and marks an unprecedented level of federal involvement in Medicaid eligibility reviews (KFF News, November 3).

CMS Confirms 2026 Physician Fee Schedule

The Centers for Medicare & Medicaid Services (CMS) finalized the 2026 Medicare Physician Fee Schedule, introducing payment changes that have drawn mixed reactions across the healthcare community. The rule includes a 2.5% efficiency adjustment for certain procedural services, which CMS says reflects improvements in technology that make some procedures less resource intensive. Time-based, telehealth, and new 2026 codes are excluded. Another provision cuts the indirect practice expense payment for physicians providing services in facilities in  half. CMS said the update better aligns payments with current practice patterns and reallocates funds toward office-based providers. The change is expected to reduce facility-based reimbursement by about 7% and raise office-based payments by roughly 4%. Physician and hospital groups have criticized the new policies, warning they could strain specialists and limit patient access, while organizations such as Medicare Payment Advisory Commission and the Paragon Health Institute support the rebalancing. CMS and HHS Secretary Robert F. Kennedy Jr. said the changes aim to modernize Medicare payments, improve efficiency, and maintain access to high-quality care (Inside Health Policy, October 31).