The Centers for Medicare & Medicaid Services (CMS) late Friday released the 2026 final rule, codifying a few of the provisions included in the Advance Notice.
The 438-page final rule is scheduled to be published in the Federal Register on April 15. The regulations take effect June 3.
What’s not included in the rule: Proposals to cover anti-obesity medications, the annual health equity analysis of utilization management policies and procedures, and new guardrails on artificial intelligence.
CMS said in a fact sheet that it is not finalizing certain provisions from the proposed rule, including those related to health equity, and may address them in future rulemaking. CMS, however, acknowledged broad interest in regulation of AI and said it will continue to consider the extent to which it may be appropriate to engage in future rulemaking.
CMS said policies that remain under review include regulations related to the health equity index reward for Parts C and D Star ratings, annual health equity analysis of utilization management policies and procedures, requirements for MA plans to provide culturally and linguistically appropriate services; and quality improvement and health risk assessments (HRAs) focused on equity and social determinants of health (SDoH).
Here is an overview of what is included in the rule:
Inpatient admission decisions: CMS will restrict Medicare Advantage (MA) and Medicare Part D plans’ ability to reopen and modify a previously approved inpatient hospital decision based on information gathered after the approval. MA plans will only be able to reopen an approved admission for obvious error or fraud. The goal of this provision is to ensure that if a plan approves an inpatient admission, it will have to honor the prior authorization.
MA appeals: CMS will also take steps to close MA appeals loopholes that adversely affect providers and enrollees. The agency clarifies the definition of “organization determination” (decisions that are subject to MA appeal and notification requirements) to MA plan decisions made concurrent to the enrollee’s receipt of services. CMS said the clarification will ensure that MA appeals rules apply to adverse plan decisions, regardless of whether the decision is made before, after, or during the receipt of services. It also codifies 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. CMS is also modifying existing regulations to clarify that an enrollee’s liability to pay for services cannot be determined until an MA organization decides on a contracted provider’s claim for payment. CMS said the clarification will ensure that enrollees always have the right to appeal MA plan coverage denials that affect their ongoing course of treatment.
Non-allowable Special Supplemental Benefits for the Chronically Ill (SSBCI): The rule establishes guardrails for these benefits, which can be offered to qualifying MA enrollees with chronic conditions. It codifies a list of benefits that aren’t allowed, such as non-healthy food, alcohol, tobacco, and life insurance.
Updates to risk adjustment data: CMS is finalizing a technical update proposed in January. That change includes the definition of Hierarchical Condition Categories to reference the 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.
Dual eligible enrollees: To improve the experience of enrollees, CMS said it is finalizing new requirements for certain dual eligible special needs plans (D-SNPs). By 2027, these plans must have integrated member identification (ID) cards that serve as the ID cards for both the Medicare and Medicaid plans in which an enrollee is enrolled. They must also conduct an integrated health risk assessment (HRA) for Medicare and Medicaid, rather than separate HRAs for each program. CMS is also codifying timeframes for all special needs to conduct HRAs and individualized care plans and prioritize the involvement of the enrollee or the enrollee’s representative, as applicable, in the development of such care plans.
Vaccine and insulin cost sharing: The final rule codifies several provisions from the Inflation Reduction Act of 2022. Effective for plan years beginning on or after January 1, 2023, there will be no cost sharing and the Medicare Part D deductible will not apply to an adult vaccine recommended by the Advisory Committee on Immunization Practices (ACIP) and covered under Part D.
CMS will also codify statutory requirements for insulin products. Effective for plan years beginning on or after January 1, 2023, the Medicare Part D deductible will not apply to covered insulin products, and the Part D cost-sharing amount for a one-month supply of each covered insulin product must not exceed the covered insulin product applicable cost-sharing amount. For 2026 and each subsequent year, the cost-sharing amount is the lesser of $35, an amount equal to 25 percent of the maximum fair price established for the covered insulin product under the Medicare Drug Price Negotiation Program; or an amount equal to 25 percent of the negotiated price, as defined by statue of the covered insulin product under the stand-alone Medicare prescription drug plan (PDP) or MA plan with prescription drug coverage (MA-PD plan).
Medicare Prescription Payment Plan: Beginning in 2025 all Medicare Prescription Drug Plans (Part D plans must offer Part D enrollees the option to pay their out-of-pocket (OOP) prescription drug costs in the form of monthly payments over the course of the year instead of all at once at the pharmacy.
CMS is also finalizing new requirements for an automatic election renewal process that extends a Part D enrollee’s participation in the program for the next calendar year, unless the enrollee opts out, with a modification to the proposed timing requirements for the renewal notice.
However, CMS isn’t moving forward with the proposed requirement for Part D sponsors to ensure that pharmacies are prepared to inform Part D enrollees of the actual OOP cost of a Part D prescription processed under the program at the pharmacy point of sale, in response to comments that the OOP cost information is already provided to pharmacies through the established claims processing methodology. CMS said it continues to encourage pharmacies to leverage standard industry transaction set data to provide OOP costs to participants verbally upon request.