Final 2026 Medicare Advantage (MA) and Part D Rule Has Some But Not All Of Biden Proposals

Trump administration does not adopt much of Biden’s proposed 2026 rule

As expected, the Trump administration has finalized some but not all of the former Biden administration’s massive proposed 2026 Medicare Advantage (MA) and Part D rule it issued in late November shortly before Biden’s term ended.

In many ways, the proposed rule from Biden was a shot across the bow to Trump, laying out Biden’s views on key policy issues within MA and Part D. As is customary, succeeding administrations tend to scrutinize rules proposed or finalized late in the previous administration’s term and usually rescind, change, or modify proposals. This is because of philosophical differences as well as the sheer volume of rules that a new administration needs to go through in the first few months of settling in to govern.

It is clear in the final rule for 2026 MA and Part D that the new Trump administration could simply not get through some of the proposed rule and develop a position. But in other areas, it clearly is throwing out the Biden proposals because it disagrees with certain proposals.

What seems apparent, too, is that the new administration will likely weigh in on issues throughout the year. The final rule indicated some proposals are still under review and could be finalized later. What’s more, CMS called out that certain of the proposals would specifically be evaluated against executive orders. The final rule commentary clearly says that it could revisit the HEI Reward for the Parts C and D Star Ratings as a whole as well as other health equity related initiatives under Biden. (UPDATE LATE 4/7/2027 — The 2026 MA Final Notice was released late 4/7 — CMS announced it ill preserve the “Health Equity Index” Reward intact but change its name to the “Excellent Health Outcomes for All” Award.)

So here is my effort to explain what got finalized and what did not from the Biden proposed rule. One word of caution: reconciling 240 pages of the proposed rule and 438 pages of the final rule (with comments and agency reactions) is no small feat. The Centers for Medicare and Medicaid Services (CMS) Fact Sheet just mentions highlights so you really do have to read both the proposed and final rules to reconcile them. So, I apologize if I missed something or perhaps misinterpreted some matters. Please let me know and I will update the blog.

As I did in my blog on the proposed rule here ( https://www.healthcarelabyrinth.com/large-ma-and-part-d-rule-issued-for-2026/ ), I am dividing this up between Part C, Part D, and general programmatic changes. I will first list the items adopted by Trump and then those not adopted. I will add some commentary to important matters.

I also did a blog on the Star program proposals in the proposed rule here ( https://www.healthcarelabyrinth.com/medicare-advantage-and-part-d-star-changes-from-2026-proposed-cms-rule/ ). The Star final changes are summarized in both the finalized and not finalized sections between Part C and general programmatic changes. This is much easier to sort out – all proposals were not finalized except one regarding Breast Cancer Screening.

To help, I have summarized in a table the changes proposed by Biden against what was finalized. In some cases, I rolled topics up to broader ones. See that roughly in the middle of this blog.

The MA 2026 Final Notice disclosing rates and other policies should be out today. I expect to have a blog comparing the Advance Notice to the Final Notice on Thursday.

Finalized Proposals

Part D

Vaccine and insulin cost-sharing — The rule finalized that the Medicare Part D deductible shall not apply to and there is no cost-sharing for an adult vaccine. There will be no deductible for insulin products, either. In addition, insulin costs will be capped at the lesser of $35 per month or other calculations that could over time drive down the cost of insulin further. The rule largely codifies changes made in the Inflation Reduction Act (IRA).

Medicare Prescription Payment Plan – By and large, the final rule implements the proposals to codify and operationalize the IRA’s Medicare Prescription Payment Plan, known as MP3. The program essentially allows enrollees to “smooth” their cost-sharing over 12 months and not face significant peaks in cost-sharing early on in the year. There is a lot there and there are experts on this topic far better than I. The text covers operational items, required outreach and education, enrollment, claims payment, and member rights.

A key provision that was finalized calls for automatic re-enrollment of 2025 program participants again in 2026 unless someone opts out.

I have been critical of the program as administratively expensive, especially in light of the substantial reductions the IRA already put in place for cost-sharing. It also can create significant risk for plans.

Prescription Drug Event (PDE) claims submission timeframes — CMS is finalizing PDE submission timeframes that are similar to the timeframes described in the October 2011 guidance on the timely submission of PDE records. CMS is codifying that initial PDE records are due within 30 calendar days following the date the claim is received by the Part D sponsor (or its contracted first tier, downstream, or related entity). Adjustment and deletion of PDE records are due within 90 calendar days following discovery of the issue requiring a change to the PDE. Resolution of rejected PDE records are due within 90 calendar days following the receipt of rejected record status from CMS. In addition, CMS is finalizing regulatory changes to establish a distinct PDE submission timeliness requirement for selected drugs under the Medicare Drug Price Negotiation Program, in which CMS requires that a Part D sponsor must submit initial PDE records within seven calendar days from the date the Part D sponsor (or its contracted first tier, downstream, or related entity) receives the claim.

IRA Part D drug negotiation codification — Additionally, CMS is finalizing two IRA-related provisions that are needed to help ensure that selected drugs with maximum fair prices (MFPs) in effect under the drug price negotiation program are available to beneficiaries at the point of sale and that the MFPs are effectuated for dispensing entities timely.

Medicare Transaction Facilitator Data Module — As well, CMS finalized a proposal that Part D sponsors’ network participation agreements with contracting pharmacies, including any contracts with first tier, downstream, and related entities, must require the pharmacies to be enrolled in the Medicare drug price negotiation program’s Medicare Transaction Facilitator Data Module (“MTF DM”) and that such pharmacies certify the accuracy and completeness of their enrollment information in the MTF DM.

Part C

Strengthening prior authorization, appeals and utilization management, including inpatient claims payments – This topic is an example of the Trump administration finalizing only parts of this area. See later for those parts not finalized. The finalized provisions are:

• Codifying existing guidance that requires plans to give a provider notice of a coverage decision, in addition to notifying the enrollee, whenever the provider submits a request on behalf of an enrollee. In addition, failure to timely notify in this situation constitutes and adverse benefit decision.
• After a contract provider’s request for payment has been adjudicated and the enrollee is determined to have no further liability to pay for the services, a determination regarding these services is not subject to CMS’ administrative appeal process.
• Calrified that an MA plans refusal, pre- or post-service, of a coverage decision concurrently with an enrollee’s receipt of services, including the type or level of services, is an organization determination subject to appeal and other existing requirements.
• If an MA plan approved the furnishing of a covered item or service through a prior authorization or pre-service determination of coverage or payment, or a concurrent determination made during the enrollee’s receipt of inpatient or outpatient services, an MA plan may not deny coverage later on the basis of lack of medical necessity and may not reopen such a decision for any reason except for good cause or if there is reliable evidence of fraud or similar fault per the reopening provisions.
• Further, in the case of an approved inpatient hospital admission, any additional clinical information obtained after the initial organization determination cannot be used as new and material evidence to establish good cause for reopening the determination.

The last two bullets are a sign that CMS is beginning to tighten the screws on prior authorization processes by stopping MA plans from revoking prior authorizations in general and, in the case of inpatient admissions, use information supplied later to revoke approvals and thus deny claims.

Supplemental benefits coverage – The finalized rule adopts an outline of non-allowable Special Supplemental Benefits for the Chronically Ill (SSBCI) (e.g., non-healthy food, alcohol, tobacco, life insurance, etc.).

SSBCI are benefits that can be offered non-uniformly to qualifying MA enrollees with chronic conditions. These benefits may be non-primarily health-related; however, the benefit must have a reasonable expectation of improving or maintaining the health or overall function of the chronically ill enrollee.

Special Needs Plan (SNP) streamlining and integration – A number of streamlining and integration provisions were finalized, while a few were not. Those finalized are:

• Members of an Applicable Integrated (Plan) Special Needs Plans (AIP SNP) will receive integrated member identification (ID) cards that serve as the ID cards for both the Medicare and Medicaid plans in which an enrollee is enrolled. AIP SNPs can occur with coordination-only SNPs, Highly Integrated Dual Eligible SNPs (HIDEs), or Fully Intergated Dual Eligible SNPs (FIDE) and are dependent on agreements between the MA plans and states.
• These same AIP SNP plans will have to conduct an integrated health risk assessment (HRA) for Medicare and Medicaid.
• The rule also finalized provisions to codify timeframes for all SNPs to conduct HRAs and individualized care plans (ICPs) and prioritize the involvement of the enrollee or the enrollee’s representative, as applicable, in the development of the ICPs.
• Related to prior authorizations, an AIP SNP must adopt and implement a process for enrollees to request that the plan make an integrated organization determination.

Star Changes

Breast cancer screening update — The updated Part C Breast Cancer Screening measure expanding the age range of included populations was adopted for Measure Year 2027/Star Year 2029.

General Programmatic Changes

Risk adjustment — CMS made a series of risk adjustment technical adjustments, including amending the definition of Hierarchical Condition Categories (HCC) to make the reference to International Classification of Diseases (ICD) general rather than version specific (i.e., from ICD-9 to ICD), and substituting the terms “disease codes” with “diagnosis codes” and “disease groupings” with “diagnosis groupings” to be consistent with ICD terminology.

The rule also codified requirements for PACE organizations and cost plans to submit risk adjustment data to CMS.

Not Finalized Proposals

Part D

Coverage of anti-obesity medication (AOM)/GLP-1 coverage — The rule would have reinterpreted the existing Part D statute to no longer exclude anti-obesity medications for the treatment of obesity from coverage under Medicare Part D and to require Medicaid programs to cover these medications when used to treat obesity. The proposed rule also had language related to prior authorization that would have required plans to liberally cover the drugs for obesity. It also did not extend such coverage to Medicaid.

Advocates and progressives are upset by the fact that the provision was not finalized. In a blog next week, I will explain why the Trump administration had no alternative but to strike the far-ranging expansion right now.

Formulary inclusion and placement of generics and biosimilars — In an effort to stop pharmacy benefits managers (PBMs) from favoring brand drugs due to the rebate arrangements with brand drug makers, the proposed rule would have required plan formularies to provide enrollees with broad access to generics, biosimilars, and other lower-cost drugs. The proposal would have helped with the uptake of biosimilars and aided consumers at the point of sale as brand rebates often do not get passed through in part or full at the drug counter.

The Trump administration said it was not ready to finalize the proposal. My view is that it is yet to fashion overall policy toward brand drugs. It seems on the right course on drug price reform. In truth, this would have been an easy thing to do with great savings potential. But Trump may not have wanted to rattle the brand drug makers and pharmacy benefits managers (PBMs) too much right now.

Pharmacy network changes – Strangely, too, it did not finalize what was reasonable contract reform proposals related to relationships between pharmacies and PBMs. The proposals did not amount to a lot, but it might have begun to set the stage to begin to stop some of the abusive practices of PBMs against network pharmacies.

Part D Medication Therapy Management (MTM) Program eligibility criteria — The proposed rule would have updated the list of core chronic diseases used to identify Part D enrollees who have multiple chronic diseases for purposes of determining eligibility for MTM enrollment. The proposed rule would have added Alzheimer’s disease as well as all other causes of dementia. The change is aimed at improving medication adherence and to reduce the risk of adverse events.

It is hard to understand why the Trump administration would have not finalized this. While the MTM program is a mandate on MA plans, pushing for correct usage and safety can only reduce costs and improve quality if done right.

Part C

Strengthening prior authorization and utilization management – As noted above, only parts of this proposal were finalized. Here is what was not finalized.

• CMS did not finalize a proposal to define “internal coverage criteria” to clarify when MA plans can apply utilization management and prior authorization.
• It also did not agree with Biden to establish policy guardrails to ensure access to benefits.
• The agency also did not adopt the proposal to make plan internal coverage policies transparent and readily available to the public.
• CMS did not adopt a proposal to ensure plans are making enrollees aware of appeals rights.
• It also did not finalize a proposal to conduct additional gathering of data and reporting to examine prior authorization processes.
• The agency did not finalize revisions to annual health equity analysis of utilization management policies and procedures, including specifically to require PA metrics be reported by each item or service, rather than aggregated for all items and services.
• It also did not finalize requirements for MA plans to provide culturally and linguistically appropriate services.

Guardrails for Artificial Intelligence (AI) — The final rule did not establish guardrails on the use of artificial intelligence (AI) to protect access to health services.

Equitable access to behavioral health benefits — The agency did not finalize a series of changes to ensure better access to mental health and substance abuse services. The rule also would have limited MA plan in-network cost sharing to what is charged in the traditional program.

Supplemental benefits coverage – While one supplemental benefit proposal was adopted, CMS did not adopt most supplemental benefit reform proposals. They were aimed at strengthening beneficiary protections and transparency around supplemental benefits generally as well as the role of community-based organizations (CBOs), in-home or at-home supplemental benefit providers, and direct furnishing entities. Provisions not adopted included:

• Introducing additional disclosure requirements to increase transparency, including additional disclosure rules around supplemental benefits and plan debit cards.
• Specifying allowable and impermissible supplemental over-the-counter (OTC) benefits.
• Clarifying what types of over the counter (OTC) products are acceptable.
• Limiting marketing of supplemental benefits, including those surrounding the chronically ill.
• Prohibiting MA organizations from marketing the dollar value of a supplemental benefit or the method by which a supplemental benefit is administered.
• Requiring processes for delivering all MA plan-covered supplemental benefits to enrollees that ensure compliance with regulations.
• Specifying the networks of providers from whom enrollees may obtain services for all benefits, including supplemental benefits.
• Describing when, how, and in what manner debit cards can be used by an MA organization and enrollee.
• Requiring plans to allow an enrollee to receive covered benefits through an alternative process if there is an issue with a plan debit card.
• Ensuring debit cards are electronically linked to plan covered items and services through a real-time identification mechanism.
• Defining community-based organizations (CBOs), in-home or at-home supplemental benefit providers and direct furnishing entities as well as identifying them within the provider directory.

Special Needs Plan (SNP) streamlining and integration – While it finalized some proposals in this area, the agency did not finalize proposals to have equity and social determinants of health (SDOH) integrated with quality improvement activities and health risk assessments (HRAs).

Star Changes

Most Star changes not acted on – There were numerous proposals on the Star front, but all but one was not acted on. The changes not adopted are:

• Inclusion of the Initiation and Engagement of Substance Use Disorder Treatment (IET) as a Part C Star measure.
• Inclusion of the Initial Opioid Prescribing for Long Duration (IOP-LD) as a Part D Star measure.
• Changing certain calculations in the Plan Makes Timely Decisions about Appeals in Part C.
• Changing certain calculations in the Reviewing Appeals Decisions in Part C.
• Clarifying how the Health Equity Index (HEI) reward factor will be calculated when a contract consolidation applies, when there are data discrepancies, or when data are missing.
• Clarifying how the HEI reward will be calculated when Dual Eligible Special Needs Plan (D-SNPs) offerings migrate from master contracts to free-standing ones.
• Clarifying how the HEI reward will be calculated for Institutional Special Needs Plan (I-SNP)-only contracts.
• Clarifying how the hold harmless provision for highly rated plans is calculated in terms of the addition of the HEI.
• Eliminating guardrails in Star Year 2028. This has pros and cons depending on circumstances.

General programmatic changes

Medical loss ratio changes — The rule would have required that provider incentive and bonus arrangements are tied to clinical or quality improvement standards in order to be included in the minimum MLR calculation. Further, administrative costs would have been excluded from being included in quality improvement activities in both the MA and Part D MLR numerator. The rule would have adopted additional requirements for the allocation of expenses in the MLR. New audit and appeals processes would have been introduced, including requiring plans to provide detailed information regarding provider payment arrangements. CMS also wanted to know about potential policies that CMS could adopt regarding how the MA and Part D MLRs are calculated in order to enable policymakers to address concerns surrounding vertical integration in MA and Part D.

The decision not to adopt these proposals is a good one. While some reforms are needed and attacking the issue of arrangements that vertically integrated organizations have within their four walls is also good, the proposal was not well thought out.

Marketing reforms to promote informed choice – Surprisingly, CMS did not really adopt any meaningful changes to marketing, especially in light of some of the criticism of late on the agent and broker front. Not adopted from the proposed rule were the following:

• Expanding marketing material oversight by broadening the definition of marketing so as to expand the scope of materials that must be prospectively submitted to CMS for review. Earlier, CMS says this would have allowed the agency to better ensure that MA and Part D plans and their downstream entities are not providing misleading, inaccurate, or confusing information to current or potential enrollees, or engaging in activities that could misrepresent benefits or services.
• Expanding what agents and brokers must discuss with potential enrollees, including the availability of low-income supports, general information on Medigap Federal guaranteed issue (GI) rights, and the practical implications of switching from Medicare Advantage to traditional Medicare.

Format provider directories for Medicare Plan Finder (MPF) — The final rule did not adopt a proposal that MA provider directory data be submitted for use to populate the Medicare Plan Finder (MPF).

#medicareadvantage #regulations #priorauthorization #partd #supplementalbenefits #snps #star #riskadjustment #marketing #mlr #drugpricing #pbms #glp1s #weightlossdrugs

— Marc S. Ryan