CMS Releases 2026 Final Rule for Medicare Advantage and Part D Programs
The Centers for Medicare & Medicaid Services (CMS) released the final rule for the 2026 contract year affecting Medicare Advantage (MA), Medicare Prescription Drug Benefit Program (Part D), Medicare Cost Plan Program, and Programs of All-Inclusive Care for the Elderly. Key proposals from the draft rule were not finalized, including those affecting anti-obesity medication coverage, increased AI-related guardrails, and several health equity initiatives within MA and Part D.
CMS emphasized that some current regulations are under review to align with deregulation policies. Among finalized provisions, CMS expanded the definition of covered insulin products to include combination insulins and eliminated cost sharing for these and adult vaccines recommended under Part D.
The Medicare Prescription Payment Plan, mandated by the Inflation Reduction Act, was codified to allow beneficiaries installment payment options for out-of-pocket drug costs, aiming to reduce financial strain on beneficiaries with high early-year drug expenses. New regulatory requirements enforcing timely submission of Prescription Drug Event (PDE) records by Part D sponsors were established, with strict 7-day submission timelines made enforceable to maintain payment accuracy and program integrity. CMS also mandated that network pharmacies contracting with Part D sponsors must enroll in the Medicare Transaction Facilitator Data Module (MTF DM) to support drug price negotiation programs starting June 2025.
The Final Rule strengthened protections for MA enrollees receiving inpatient services by clarifying organization determination processes to reduce surprise denials and restrict retroactive care denials post-authorization.
New regulatory restrictions were placed on Special Supplemental Benefits for the Chronically Ill (SSBCI), including a finalized list of non-allowable benefits such as non-healthy foods and other items, specifying these must have a reasonable expectation of improving or maintaining health or function.
Additional finalized measures aim to improve care coordination and integration for dual-eligible Special Needs Plan enrollees, including regular updates to individualized care plans upon significant health changes or transitions. CMS updated risk adjustment data definitions to remain current with ICD coding updates and mandated submission of such data by PACE and Section 1876 Cost plans. While many Medical Loss Ratio (MLR) regulatory changes were proposed to align Medicare MLRs with commercial and Medicaid programs, only the exclusion of unsettled balances from the MLR numerator was finalized.
These updates reflect CMS's ongoing balance of operational continuity, regulatory refinement, and implementation of the Inflation Reduction Act provisions impacting Medicare drug coverage and delivery structures.