Lilly Cuts Off 340B Discounts Eli Lilly and Company ended 340B discount pricing for drugs for providers that have not agreed to submit claims for validating whether purchases meet the program’s requirements or may be double-dipping on other discount programs. Earlier this month, Lilly began enforcing the policy by telling its wholesalers to pull 340B pricing eligibility for certain non-conformers. Lilly said these were large and wealthy health systems. Hospitals are apoplectic and earlier derailed a 340b pilot that would have converted the upfront discounts to a retrospective rebate. Their fear: other drug makers follow suit and the Trump administration does not object. Additional articles: https://www.fiercehealthcare.com/providers/eli-lillys-ultimatum-hospitals-send-340b-claims-data-june-1-or-lose-discounts (Some articles may require a subscription.) #340b #drugpricing #drugmanufacturers https://www.modernhealthcare.com/providers/mh-eli-lilly-340b-drug-discounts-hospitals/ — Marc S. Ryan

CMS Recalculates Some SY 2026 Ratings CMS this evening announced it is recalculating some contracts’ SY 2026 Star Ratings based on the better of the current ratings or the measures included in the recent Clover decision. A judge struck up to 20 measures. CMS went out of its way to note that this does not set policy for SY 2027 ratings or beyond. I still expect an appeal or other intervention to bring back a fulsome Star program. #stars #quality #cms #medicareadvantage #partd #pdp DOJ Sues NY Over Fraud The Department of Justice (DOJ) is suing the New York State Department of Health (DOH), the state’s Medicaid director, and a company operating a $10 billion home health program. The Justice Department accused home health agency Public Partnerships, LLC (PPL) of making false or misleading statements about its ability to take over and run the state’s Consumer Directed Personal Assistance Program (CDPAP). DOJ also says DOH awarded PPL the contract after conducting

MedPAC Largely Pans Hospitals’ Complaint On MA Penetration Congressional Medicare policy advisor MedPAC panned hospitals’ views that increased penetration of Medicare Advantage (MA) is impacting providers’ financial stability. Empirical analyses conducted by MedPAC staff showed no evidence of a significant association between MA market penetration and all-payer margins of hospitals, skilled nursing facilities (SNFs), and home health agencies. This does not appear to be the case in rural markets, either. But MedPAC did find some changes in revenues, costs and utilization trends and some of it was in hospitals’ favor. MA enrollees’ average length of stay in fiscal year 2024 was actually 11.2% longer than fee-for-service (FFS) beneficiaries. This was related to those who were destined to be discharged to a post-acute care facility. And overall greater MA penetration was tied to dips in total SNF facility days and small declines in revenues and costs at SNFs and home health.

Exchange Carrier Exits Healthcare policy group KFF issued several issue briefers recently on carrier losses in the Exchanges. The average number of issuers offering plans in the Exchanges has declined from 9.6 issuers per state in 2025 to 9.0 issuers per state in 2026. In total, 18 states experienced a net decrease in the number of issuers offering plans. Three in 10 counties have fewer participating insurers than last year. In 165 counties, only one issuer is offering plans, up from 93 counties in 2025. Six carriers have announced that they will exit the Exchanges in 2027, either in some or all states that they are currently offering plans: Cigna Health, CareSource, PacificSource, Scott and White, Providence Health, and Taro Health. In other news, Centene will offer buyouts to employees as it navigates a significant membership decline in both Medicaid and the Exchanges. During Q1, Centene reported a 6% decline

Trump Seeks To Make Medicare Drug Price Negotiations Permanent In Regulation The Trump administration and the Centers for Medicare & Medicaid Services (CMS) have proposed to codify the Biden-era Medicare Drug Price Negotiation Program — a fantastic turn of events that few would have predicted a few years ago despite Trump’s sympathies for drug price reform. They say the move will create a more transparent and sustainable process for lowering drug costs for millions of Medicare beneficiaries. There are a number of small concessions to drug makers as well. I have given President Trump great credit for making a huge impact on drug pricing, more than any other recent president. This is more evidence. Additional articles: https://www.cms.gov/newsroom/press-releases/cms-proposed-rule-locks-lower-prices-fosters-innovation-medicare-drug-price-negotiation-program and https://www.cms.gov/files/document/mdpnp-nprm-fact-sheet.pdf #drugpricing #cms #medicare #partd #medicareadvantage #pdp https://www.fiercehealthcare.com/regulatory/cms-proposes-permanent-framework-medicare-drug-price-negotiations Democrats Search For The Next Obamacare Democrats are seeking to find their next Obamacare to win votes in the midterms. Lawmakers and policymakers are