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In a first-of-its-kind move, the Trump administration will allow Tennessee officials to restrict medicines covered by the state Medicaid program, which is currently required to provide coverage for all treatments. As part of an effort to overhaul spending by the state program, Tennessee will be permitted to maintain a so-called closed formulary, which is the same approach to coverage taken by private health plans. (Silverman, 1/8)

In the waning days of the Trump administration, federal officials approved a plan to convert TennCare funding to a block grant, potentially overhauling the Medicaid program providing health coverage to about one in five Tennesseans. But a TennCare block grant does not align with the health care proposal of President-elect Joe Biden, who instead campaigned on plans to improve and expand Obamacare. Biden may reverse the Tennessee block grant decision before it has any effect. (Kelman, 1/8)

CMS on Friday approved the country's first Medicaid block grant plan in Tennessee, following through on a top priority for CMS Administrator Seema Verma. Under the plan—dubbed "TennCare III"—Tennessee will accept a fixed budget target for its Medicaid program in exchange for more flexibility in spending its Medicaid money and an opportunity to earn shared savings. According to CMS, the agency will work with Tennessee to evaluate historical enrollment and Medicaid cost information to establish a fixed spending target for its Medicaid program. (Brady, 1/8)

KHN: Trump Administration Approves First Medicaid Block Grant, In Tennessee 

The approval is a 10-year “experiment.” Instead of the open-ended federal funding that rises with higher enrollment and health costs, Tennessee will instead get an annual block grant. The approach has been pushed for decades by conservatives who say states too often chafe under strict federal guidelines about enrollment and coverage and can find ways to provide care more efficiently. But under the agreement, Tennessee’s annual funding cap will increase if enrollment grows. What’s different is that unlike other states, federal Medicaid funding in Tennessee won’t automatically keep up with rising per -person Medicaid expenses. (Galewitz, 1/8)

Democrats have their best shot in more than a decade to deliver on one of the party’s central health care promises: allowing Medicare to directly negotiate prescription drug prices. But it’s far from guaranteed that they can deliver. (Florko and Facher, 1/11)

Ohio's grand quest to finally slay the dragon of overcharges by pharmacy benefit managers starts Monday with the rollout of a new $158 million contract by the state Medicaid agency. The Buckeye State's premise, a unique approach just approved by the federal government: It takes a PBM to beat a PBM. Bearing the sword on behalf of the state is Gainwell Technologies, a single PBM newly hired to work on behalf of Ohio taxpayers. The company will replace the multibillion-dollar conglomerates such as CVS Caremark and Express Scripts that currently serve as middlemen in the prescription drug supply chain for 3 million poor or disabled Ohioans. (Rowland, 1/11)