The Regulator

Labor Department finalizes its pharmacy benefit manager fee disclosure rule and estimates $818.4 million a year in lower drug costs for large employer plans. The Employee Benefits Security Administration (EBSA) final rule, set for Federal Register publication Monday, November 2, requires pharmacy benefit managers (PBMs, the middlemen that negotiate drug prices and rebates for employer plans) and their affiliated brokers and consultants to disclose their direct and indirect compensation to the fiduciaries of large self-insured group health plans, generally those with at least 100 participants. It is effective January 4, 2027 and applies to plan years beginning on or after July 1, 2027. Who it hits: PBMs, benefit brokers and consultants, and the employers that self-fund drug coverage, a group the rule’s cost analysis sizes at 52.9 million participants aged 18 to 64. So what: the $818.4 million is the department’s own estimate, built on a Congressional Budget Office assumption of a 1% price drop on about $81.8 billion in annual spending, and the department says it may understate the effect. A service contract without the required disclosures can fall outside the Employee Retirement Income Security Act (ERISA) exemption for plan service arrangements, which exposes fiduciaries and providers to enforcement. We flagged the rule’s White House review October 24. Confidence: High on dates and provisions, from the rule text; Med on the savings, which is an assumption. Source: Federal Register final rule, 91 FR 69092.

FDA proposes the first update to infant formula nutrient rules since 1998, changing required levels of four nutrients, with comments due March 2, 2027. The Food and Drug Administration (FDA) proposed rule, set for Federal Register publication Monday, November 2, assesses 8 of the 30 nutrients formula must contain, under its Operation Stork Speed review. It would raise the minimum iodine from 5 to 15 micrograms per 100 kilocalories and cut the maximum from 75 to 50. It would lower the vitamin A range to 70 to 120 micrograms of retinol activity equivalents, from 75 to 225, amend vitamin D, and set the first maximum for manganese. Labels would move vitamin A and D from international units to micrograms. FDA says current levels for chloride, selenium, potassium and sodium remain appropriate. Who it hits: formula makers, who would reformulate and relabel. So what: FDA estimates annualized costs of $17.6 million against benefits of $80.9 million, and proposes compliance three years after the effective date of the final rule that completes the full nutrient review, so shelf changes are years away. Confidence: High. Source: FDA proposed rule, 91 FR 69040.

UPDATE: A federal judge struck CMS’s stricter “medically frail” test for Medicaid work requirements, and the January 1, 2027 start stands. Judge Richard Stearns of the U.S. District Court for the District of Massachusetts ruled October 29 in Commonwealth of Massachusetts v. Oz, a suit by 25 states and the District of Columbia. Reports say he found contrary to law the Centers for Medicare & Medicaid Services (CMS) requirement that a condition “significantly impair” a person’s ability to meet the work rules, and issued a permanent injunction. He upheld the 12-month limit on claims data used to show frailty and the limit of one self-attestation per continuous enrollment period, and reportedly gave states six more months before frailty determinations are enforced. Who it hits: expansion adults aged 19 to 64 who must show 80 hours a month of work, volunteering or school, and the state agencies building verification systems. So what: CMS can appeal and declined to comment, and reports differ on whether the injunction covers only the plaintiff states. Confidence: Med. We could not open the order, so this rests on news reporting of it. Sources: Healthcare Dive report, which links the court order, PBS NewsHour report.

CMS asks for emergency approval to expand its home health Review Choice Demonstration to California, citing “significant fraud.” The CMS notice, set for Federal Register publication Monday, November 2, requests emergency Paperwork Reduction Act clearance, with comments due November 16. Under the demonstration, a home health agency chooses 100% pre-claim review or 100% post-payment review, or declines both and takes a 25% payment reduction on all home health claims. Agencies that reach the target approval rate can drop to spot checks. Who it hits: Medicare home health agencies in California. So what: the notice gives no start date and no count of California agencies. The collection as a whole lists 4,700 respondents and about 1.6 million burden hours a year. Confidence: High on the notice; Low on timing. Source: Federal Register notice, 91 FR 68960. Supplemental: Home Health Care News report.

Maine: an independent review of MaineHealth’s plan to end births at Lincoln Hospital is due December 11, a week before the December 18 closure. The Bangor Daily News reported October 30 that MaineHealth’s board voted August 6 to close the Damariscotta hospital’s labor and delivery unit and move patients to Mid Coast Hospital in Brunswick. A five-member panel will judge whether the alternatives were “reasonable, feasible, and sustainable,” and only MaineHealth’s boards can reconsider. A citizen petition seeks to invoke LD 2189, signed April 3, which requires 120 days’ notice before a hospital closes labor and delivery. Who it hits: families on Maine’s midcoast. So what: the closure is 47 days away, and the report does not say whether the notice law applies to this vote. Confidence: Med. This is local reporting, and we did not retrieve the law or the board’s documents. Source: Bangor Daily News report.

FDA reissues draft guidance on the performance data drug delivery devices should show, with comments due January 28, 2027. The Federal Register notice, published October 30, revises and replaces a July 2024 draft titled “Essential Drug Delivery Outputs.” It advises makers of devices that deliver drugs and biologics, and of combination products with device parts, how to organize drug-delivery performance data in applications. Who it hits: device and combination-product sponsors preparing submissions. So what: draft guidance is not binding, but it signals the format reviewers expect, and comments close in 88 days. Confidence: High. Source: Federal Register notice.