State Health Policy Action We’re Watching in May 2026

Key Takeaways

• Nebraska became the first state to implement Medicaid work requirements under LB 1221, with the Centers for Medicare and Medicaid Services expected to release an interim final rule by June 1, 2026.
• A federal judge ruled that North Dakota's 340B pharmacy law was preempted by federal law, marking the second recent court decision favoring drug manufacturers in disputes over state 340B contract pharmacy protections.
• Tennessee enacted SB 2414 to allow Ballad Health's Certificate of Public Advantage to expire in June 2028, despite FTC warnings about potential monopolistic market power and impacts on healthcare costs and quality.
• Virginia lawmakers unanimously rejected Governor Spanberger's amendments to delay Medicare Maximum Fair Price controls, sending the state health care policy bills back for final action by May 23.

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Here are some of the state health care policy stories we've been monitoring in May 2026.

Nebraska Becomes First State to Implement Medicaid Work Requirements

On Friday, May 1, Nebraska’s Medicaid work requirements (LB 1221) went into effect, becoming the first state to begin implementation. The Nebraska Department of Health and Human Services began checking work requirements for Medicaid expansion enrollees whose annual eligibility period ends on or after July 31, 2026. Existing enrollees must have met work requirements for at least one month since their last renewal, and new enrollees must meet work requirements in the month before they apply. While the state serves as an example of how the work requirements will operate in practice, the Centers for Medicare and Medicaid Services is expected to release an interim final rule on the requirements by June 1, 2026.

Federal Court Strikes Down North Dakota 340B Pharmacy Law

U.S. District Judge Daniel Taylor ruled that HB 1473, North Dakota’s 340B pharmacy law, was preempted by section 340B of the Public Health Service Act and violated the Supremacy Clause and the Commerce Clause. The law penalizes pharmaceutical manufacturers for interfering with a contract pharmacy’s ability to acquire 340B drugs and prohibits them from requiring extraneous data sharing or offering the drugs in rebates that are not compliant with federal law. This represents the second ruling favoring drug manufacturers regarding state 340B contract pharmacy laws since April, joining the 4th Circuit’s decision to uphold the preliminary injunction on West Virginia’s law on April 6. The State can still appeal the decision to the 8th Circuit, which previously ruled in favor of Arkansas’ law.

Tennessee Ends Regulatory Oversight of Ballad Health Monopoly

Tennessee enacted SB 2414, which allows a Certificate of Public Advantage (COPA) for Ballad Health to expire in June 2028, ending Tennessee’s regulatory oversight of the system. Directors of the Federal Trade Commission’s (FTC’s) Office of Policy Planning and Bureau of Competition and Economics previously issued a letter warning of potential anticompetitive consequences if the COPA expired without a competing healthcare system. The FTC noted this expiration could enable a monopolist to exercise substantial market power, leading patients to face higher healthcare costs and lower-quality care.

Virginia Legislature Rejects Governor's Amendments to Medicare Drug Pricing Bill

Members of the Virginia General Assembly recently voted unanimously to reject Governor Abigail Spanberger’s (D) amendments to SB 271/HB 483. In particular, legislators opposed Spanberger’s enacting clause that would have delayed the effectiveness of the new Medicare Maximum Fair Price (MFP) controls unless the 2027 General Assembly decides to reenact the provisions. Now, the bills are headed back to Governor Spanberger, who has until May 23 to either sign the originally passed version of the bill, veto it, or allow it to become law without her signature.

Track Health Care Policy

The ever-evolving state health policy landscape will continue to influence how health care organizations make business decisions. MultiState’s team pulls from decades of expertise to help you effectively navigate and engage. MultiState’s team understands the issues, knows the key players and organizations, and we harness that expertise to help our clients effectively navigate and engage on their policy priorities. We offer customized strategic solutions to help you develop and execute a proactive multistate agenda focused on your company’s goals. Learn more about our Health Care Policy Practice.