Charles Baker, VP, Compliance Solutions
Tammy Hall, Sr. Consultant, Compliance & Health Plan Operations
Introduction
The 2026 Contract Year Final Rule for Medicare Advantage (MA) and Part D Prescription Drug Plans largely fell flat in comparison to previous rule making cycles in contrast to the 2026 Proposed Rule. However, CMS has prioritized the codification of Inflation Reduction Act (IRA) provisions, operational updates, and further steps toward integration for dual-eligible populations. While it was less flashy than expected, these changes will influence plan administration, benefit design, and member experience for the upcoming year.
Unlike some recent rulemaking cycles, the 2026 final rule does not introduce broad new coverage requirements. Many proposals from prior cycles—such as expanded anti-obesity drug coverage or additional changes to network and marketing rules—were not finalized for 2026. The emphasis this year is on finalizing IRA mandates, updating beneficiary protections, and operational integration, particularly for special needs plans. For MA organizations and Part D sponsors, the focus is on compliance with updated benefit requirements and preparation for the related operational changes.
IRA and Part D Prescription Drug Program Provisions
$0 Cost-Sharing for Adult Vaccines
Effective for 2026 and beyond, plans must provide $0 cost-sharing for all adult vaccines recommended by the Advisory Committee on Immunization Practices (ACIP) under Part D. No deductible, coinsurance, or other cost-sharing applies for covered vaccines, regardless of formulary tier or benefit phase. Plans must reimburse beneficiaries for any qualifying out-of-network vaccine expenses and maintain systems to adjudicate these claims accurately.
Operationally, most plans have been applying these standards since 2023, but permanent codification increases the need for ongoing audit and claims accuracy. Pharmacy benefit managers (PBMs), claims, and member services teams will need to ensure correct adjudication and retroactive adjustments as needed.
Insulin Cost-Sharing Caps
The rule codifies the IRA’s insulin cost-sharing requirements. Member out-of-pocket costs for covered insulin products are capped at the lesser of $35 per month, 25% of the Maximum Fair Price, or 25% of the plan-negotiated price. This applies at both in-network and out-of-network pharmacies and includes combination insulin products.
Plans will need to maintain up-to-date claims adjudication logic and ensure appropriate processing for any required reimbursements for previous plan years.
Medicare Prescription Payment Plan (M3P) Enhancements
Starting in 2026, the Medicare Prescription Payment Plan (M3P) requirements will move from guidance to regulation. Key elements include automatic participant renewal, updated notice requirements, a standardized process for opt-outs, 24-hour enrollment processing, and requirements for communications and website updates. Plans are also required to report transaction routing information to CMS for transparency.
M3P requires coordination across IT, finance, and member services functions to support billing, payment tracking, and clear member communication. The program’s financial and operational risks, such as management of bad debt and effects on cash flow, will require monitoring as the program matures.
Accelerated PDE Submission and Pharmacy Data Module Enrollment
A new 7-day submission timeline for Prescription Drug Event (PDE) records is now required for drugs selected under the Medicare negotiation program, while the standard 30/90-day timelines continue for other drugs. All network pharmacies must enroll in and maintain accurate records within the Medicare Transaction Facilitator (MTF) Data Module.
Implementation will require collaboration with PBMs, updates to pharmacy contracts, and new processes for tracking pharmacy enrollment and data quality. Plans will need to update infrastructure and ensure these requirements are met by 2026.
Medicare Advantage & Appeals Updates
Organization Determinations and Appeals Rights
The 2026 rule clarifies that any concurrent or ongoing care coverage decision is considered an organization determination, subject to appeals rights. Plans are required to notify both the enrollee and any provider who submitted a request when an organization determination is made.
Plans will need to update their policies, claims processes, and appeals workflows, and ensure that systems are able to track provider-initiated requests and send notifications as required.
Limiting Reopening of Approved Inpatient Admissions
The rule restricts plans from reopening or reversing prior approved inpatient hospital admissions based on medical necessity, except in cases of fraud or other specified exceptions.
This increases the importance of thorough prior authorization reviews. Utilization management and compliance teams should review and strengthen initial review processes, ensure clear documentation, and train staff on the revised criteria for reopening approvals.
Member Financial Liability Clarification
Members cannot be held financially liable for services until the MA organization has completed its determination on a contracted provider’s claim. This protection is intended to ensure appeal rights and prevent members from being billed prematurely.
Guardrails for Special Supplemental Benefits for the Chronically Ill (SSBCI)
CMS has codified a list of items not eligible as SSBCI, including non-healthy food, alcohol, tobacco, cannabis, certain cosmetic procedures, funeral costs, and life insurance. Plans should review their
SSBCI benefit offerings to ensure compliance and maintain documentation linking benefits to health maintenance or improvement.
D-SNP Integration: Integrated ID Cards and Health Risk Assessments
By 2027, Applicable Integrated Plans (AIPs)—D-SNPs with exclusively aligned enrollment—must issue a single, integrated member ID card for both Medicare and Medicaid benefits. AIPs are also required to conduct a single, integrated Health Risk Assessment (HRA) meeting the requirements of both programs. Implementation includes member communications and system updates beginning in 2026.
Plans will need to coordinate multi-year planning, budgeting, and vendor engagement to meet these requirements. IT, operations, and care management teams should align on eligibility, enrollment, and assessment tools.
Standardized HRA and ICP Timelines for SNPs
All SNPs are now required to follow standardized timelines for initial and annual HRAs, individualized care plan (ICP) development, and member outreach. This includes at least three outreach attempts (and a follow-up letter) to schedule HRAs within 90 days of enrollment and annually, with ICPs to be completed within 90 days of the initial HRA or 90 days after the effective date of enrollment, whichever is later.
Care management teams will need to update workflows, provide staff training, and ensure documentation practices meet these standards.
Risk Adjustment and Payment
The 2026 rule completes the phase-in of the Version 28 (V28) CMS-HCC risk adjustment model for non- PACE MA plans. For PACE organizations, a blended model (10% V28, 90% prior model) will be used. Updates also clarify use of ICD coding and require mandatory risk data submission for PACE and cost plans.
Finance and risk adjustment teams should review bids, forecasting tools, and provider education for alignment with the new model and monitor the impact on revenue and coding.
Payment Policy Updates
For 2026, CMS finalized an average MA payment rate increase of 5.06%, driven largely by growth in Medicare Fee-for-Service costs. While the rate increase provides additional funding, it is offset by continued adjustments from the risk model and normalization factors. Plans should update their financial models and bidding strategies accordingly.
Strategic Considerations and Next Steps
These changes will affect all operational and strategic areas of MA and Part D administration. Health plan leaders should focus on timely compliance with new cost-sharing and claims requirements, review and update front-line review and appeals processes, and invest in system and integration projects needed for D-SNP and M3P requirements. Cross-functional coordination, clear project management, and effective communication with members and providers will be important as the 2026 landscape takes effect.
Immediate priorities:
- Confirming claims adjudication for vaccines and insulin
- Completing contract amendments and pharmacy coordination for PDE and MTF requirements
- Updating policies and procedures for appeals and concurrent reviews
- Auditing SSBCI benefit design for compliance
- Beginning D-SNP integration planning and resource allocation
- Finalizing risk adjustment and bid strategies for V28 and payment changes
Click here to see full article with the key provisions grid. Use this summary to guide your plan’s assessment, readiness, and priority actions. A coordinated approach across compliance, operations, clinical, and finance teams will support success in the year ahead.
About ATTAC Consulting Group
ATTAC Consulting Group is nationally recognized as an expert in regulatory interpretation, design, and operation of effective compliance programs for Medicare, Medicaid and commercial health plans, PDPs, ACA plans, ACOs, IPAs, medical groups, dental and vision plans. Talk with an ATTAC compliance expert now.
