CMS has published its final rule for Medicare Advantage and Part D in 2026, outlining a series of regulatory updates aimed at strengthening consumer protections and improving care coordination across the Medicare Advantage and Part D programs.
While the final rule solidifies several changes — including measures to streamline prior authorization, tighten oversight of supplemental benefits and codify provisions from the Inflation Reduction Act — CMS stopped short of addressing two of the most closely watched issues: expanding coverage for GLP-1s and regulating the use of AI in prior authorization. Those decisions have been deferred to future rulemaking.
Here are 14 things to know about the final rule:
1. No coverage for GLP-1s: CMS chose not to move forward with the Biden Administration’s proposal to cover anti-obesity medications such as Ozempic and Wegovy under Medicare and Medicaid. The decision comes after pushback from payers and concern over the projected $35 billion increase in federal spending over 10 years. Coverage may be revisited in future rulemaking.
2. AI in prior authorization left unresolved: CMS declined to finalize rules that would have placed guardrails around the use of AI in prior authorization decisions, despite widespread interest from stakeholders. The agency said it will consider regulatory approaches to AI in the future.
3. CMS to hold MA plans accountable for approved inpatient stays: Under the final rule, MA plans cannot retroactively deny inpatient admissions that were previously authorized — unless there is evidence of fraud or obvious error. This provision aims to reduce denials and ensure consistency in care.
4. Decisions on marketing and network adequacy deferred: CMS postponed decisions on broadening the definition of marketing and strengthening provider directory requirements. These proposals are still under consideration for future rulemaking.
5. Appeals process strengthened: CMS said it is closing loopholes in the MA appeals process to better protect enrollees and providers. This includes clarifying that appeals rights apply to adverse decisions made during care, not just before, and ensuring providers are notified when submitting coverage requests on a patient’s behalf.
6. Supplemental benefits guardrails established: CMS codified a list of non-allowable supplemental benefits under the Special Supplemental Benefits for the Chronically Ill category — such as non-healthy food, alcohol, tobacco and life insurance — to provide a clear health-related standard for these offerings.
7. Risk adjustment definitions updated: CMS finalized technical changes to align terminology with current ICD coding standards and clarified risk adjustment data submission requirements for Program of All-Inclusive Care for the Elderly (PACE) organizations and Medicare cost plans.
8. Improving dual-eligible care coordination: By 2027, certain dual-eligible special needs plans must provide integrated ID cards and unified health risk assessments that serve both Medicare and Medicaid, aiming to simplify and improve care for these vulnerable populations.
9. Inflation Reduction Act provisions codified: CMS formally implemented several IRA-related policies, including those affecting the Medicare Drug Price Negotiation Program and cost-sharing requirements for vaccines and insulin products.
10. Zero cost-sharing for adult vaccines: Effective for plan years beginning in 2023, Medicare Part D plans must continue to waive deductibles and cost-sharing for adult vaccines recommended by the Advisory Committee on Immunization Practices.
11. Insulin costs capped: In 2023, insulin costs for Medicare beneficiaries were capped at $35 per month or less, depending on negotiated or maximum fair prices. This cap will apply annually beginning in 2026.
12. Prescription Payment Plan updates: CMS finalized updates to the Medicare Prescription Payment Plan, which allows beneficiaries to pay out-of-pocket drug costs in monthly installments. New requirements include an auto-renewal process unless beneficiaries opt out.
13. Timely drug event reporting required: CMS finalized deadlines for timely submission of Prescription Drug Event records. Notably, records for selected drugs under the drug price negotiation program must be submitted within seven calendar days of claim receipt.
14. Pharmacy network agreements must support drug pricing program: Part D sponsors must ensure their network pharmacies enroll in the Medicare Transaction Facilitator Data Module and verify their information to help facilitate access to negotiated drug prices and accurate claims processing.
Click here to read the 438-page final rule in full.
