CMS Medicare Final Rule Proposal 2026

On November 26, 2024, the Centers for Medicare & Medicaid Services (CMS) proposed the Contract Year 2026 Policy and Technical Changes to the Medicare Advantage (MA) Program and Medicare Prescription Drug Benefit Program (Part D), known as CMS-4208-P. This proposed rule introduces several significant changes aimed at enhancing beneficiary access to care, ensuring equitable treatment, and strengthening program oversight.

Key Proposed Changes:

  1. Coverage of Anti-Obesity Medications:
    • CMS plans to reinterpret existing statutes to recognize obesity as a disease, allowing Medicare Part D and Medicaid to cover anti-obesity medications. This would enable beneficiaries to access treatments like Ozempic and Wegovy, which are currently excluded when prescribed solely for weight loss.
      CMS
  2. Strengthening Utilization Management and Prior Authorization:
    • The rule proposes to fortify limitations on insurers’ use of internal coverage criteria, ensuring that MA plans provide coverage for all reasonable and necessary Medicare Part A and B benefits. It also introduces additional guardrails on the use of artificial intelligence in utilization management to prevent inequitable treatment or restricted access to care.
      American Hospital Association
  3. Enhancing Transparency and Beneficiary Protections:
    • Provider Directory Accessibility: MA plans would be required to make provider directory information more widely available through the Medicare Plan Finder tool, facilitating easier comparison for beneficiaries.
      American Hospital Association
    • Behavioral Health Cost Sharing: The proposal aims to limit enrollee cost-sharing for behavioral health services to amounts no greater than those under Traditional Medicare, promoting parity in mental health care access.
      American Hospital Association
    • Marketing Oversight: CMS plans to enhance oversight of MA agent and broker marketing materials to protect beneficiaries from misleading information.
      American Hospital Association
  4. Medical Loss Ratio (MLR) Reporting:
    • The proposed rule would update MLR reporting requirements for MA and Part D plans to improve oversight, align with commercial and Medicaid reporting standards, and gather additional information on MLR and vertical integration.
      American Hospital Association

Unintended Consequences:

While these proposals aim to improve beneficiary access and program integrity, they may lead to unintended consequences:

  • Increased Program Costs: Expanding coverage to include anti-obesity medications could significantly raise program expenditures. CMS estimates that over ten years, this change would increase costs to the federal government by $24.8 billion for Part D and $14.8 billion for Medicaid.
    National Law Review
  • Administrative Burden on Providers: Enhanced oversight and stricter utilization management protocols may increase administrative tasks for healthcare providers, potentially diverting time from patient care.
  • Impact on AI Utilization: Implementing guardrails on artificial intelligence in utilization management could slow the adoption of innovative technologies intended to streamline healthcare delivery.

Impact on Independent Medicare Agents:

Independent Medicare agents play a crucial role in guiding beneficiaries through plan selections. The proposed changes could affect them in several ways:

  • Stricter Marketing Regulations: Enhanced oversight of marketing materials may require agents to adhere to more stringent guidelines, necessitating additional training and compliance efforts.
  • Commission Structures: Adjustments in plan offerings, especially with the inclusion of anti-obesity medications, might influence commission structures, potentially affecting agents’ income.
  • Increased Transparency Requirements: Agents may need to provide more detailed information about plan networks and benefits, impacting how they present options to clients.

Overall, while the proposed rule aims to enhance beneficiary protections and access to care, independent Medicare agents will need to adapt to new regulations and potential shifts in plan dynamics. Staying informed and flexible will be key to navigating these changes effectively.

Not affiliated with or endorsed by Medicare or any government agency.

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