Key 2026 Medicare Policy & Technical Changes

On April 4, 2025, CMS released the final rule for Contract Year (CY) 2026, bringing important updates to Medicare Advantage (MA), Part D, PACE programs, and Medicare cost plans. This rule focuses on improving enrollee protections, enhancing drug coverage transparency, streamlining plan operations, and supporting vulnerable populations like dually eligible beneficiaries.

Below is a breakdown of the most impactful updates agents should be aware of when preparing for the 2026 plan year.

Inpatient Admission Decisions: Plans Must Honor Prior Authorization

MA plans will now be restricted from reopening or modifying a previously approved inpatient admission unless there’s clear evidence of fraud or error. This means if an MA plan grants prior authorization for admission, they must stand by that decision—creating more predictability for both providers and enrollees.

Closing MA Appeals Loopholes

CMS is finalizing changes that strengthen the appeals process:

• Clarified definition of “organization determination” ensures appeals rights apply whether a decision is made before, during, or after service delivery.

• Required provider notifications for coverage decisions when acting on behalf of enrollees.

• Clarified financial liability—enrollees can’t be held responsible until the MA plan makes a final decision on a claim.

These changes aim to ensure fair, transparent decision-making that protects both members and providers.

Guardrails on SSBCI (Special Supplemental Benefits for the Chronically Ill)

CMS has finalized a list of non-allowable SSBCI benefits that plans can no longer offer, including items like:

• Alcohol or tobacco products

• Non-healthy foods

• Life insurance

All SSBCI must have a reasonable expectation of improving or maintaining health to be permissible.

Risk Adjustment and Coding Terminology Updates

Technical clarifications include:

• Updating terminology to align with ICD conventions, using “diagnosis codes” and “diagnosis groupings.”

• Codifying risk adjustment data requirements for PACE and cost plans.

This ensures consistency and clarity across programs, especially for data reporting.

Better Support for Dually Eligible Enrollees

For D-SNPs, new requirements by 2027 include:

• Integrated member ID cards for Medicare and Medicaid

• Unified health risk assessments (HRAs)

• Clear timeframes for care planning, with emphasis on enrollee involvement

These changes support seamless coordination between Medicare and Medicaid services.

Codifying IRA-Related Drug & Vaccine Cost Sharing

Several Inflation Reduction Act provisions are now officially codified, including:

Vaccine Cost Sharing

• No cost sharing or deductible for adult ACIP-recommended vaccines covered under Part D.

Insulin Cost Sharing Cap

• Starting in 2026, enrollees will pay the lesser of:

  • $35/month

  • 25% of the maximum fair price

  • 25% of the negotiated plan price

Medicare Prescription Payment Plan: Monthly Billing for OOP Costs

Part D enrollees will now have the option to pay out-of-pocket drug costs monthly instead of all at once. CMS finalized:

• An auto-renewal process to continue participation each year

• Flexibility around renewal notice timing

• Continued encouragement for pharmacies to provide cost estimates verbally upon request

This allows more manageable budgeting for high-cost medications.

Faster PDE (Prescription Drug Event) Reporting Requirements

To support price transparency under the Medicare Drug Price Negotiation Program, CMS finalized:

• 30-day submission deadline for initial PDEs

• 90-day deadline for corrections or rejections

• 7-day submission rule for claims involving selected drugs

This promotes accurate claims reporting and ensures beneficiaries get access to negotiated drug prices.

Network Pharmacies Must Enroll in MTF DM

All pharmacies in a Part D sponsor’s network must enroll in CMS’s Medicare Transaction Facilitator Data Module (MTF DM) and certify their information. This ensures:

• Beneficiaries have access to negotiated prices

• Pharmacies and plans can correctly process claims for selected drugs

What This Means for Agents

These rule changes are designed to enhance enrollee protections, improve the Medicare experience, and promote accountability among plans. As an agent, your understanding of these updates is key to:

• Advising clients accurately on benefits and coverage

• Positioning yourself as a trusted advisor in a changing market

• Supporting vulnerable populations like dual-eligibles with confidence

PSM Brokerage: Helping Agents Navigate the 2026 Changes

At PSM Brokerage, we’re here to make sure you have everything you need to succeed in a dynamic regulatory environment:

✅ Summary Guides & Fact Sheets on finalized rules
✅ Compliance Updates delivered in plain English
✅ Training & Webinars on IRA reforms and MA plan operations
✅ Marketing Support to help you educate clients on upcoming changes
✅ Dedicated Agent Support Team ready to walk you through complex cases

Whether you're gearing up for AEP or just want to stay ahead of industry changes, PSM Brokerage is your partner every step of the way.

📞 Schedule a call with us today to get access to 2026-ready resources and support.