CMS 2026 Final Rule: What Insurance Agents Need to Know

CMS dropped the Final Rule for Contract Year 2026 on April 4th, and there's quite a bit to unpack for those of us helping seniors with their Medicare coverage.

The Highlights: This year's final rule delivers some significant wins – strengthened appeal rights for MA enrollees, clearer rules for special benefits offered to chronically ill beneficiaries, and formalized protections for insulin and vaccine coverage.

CMS also fine-tuned the new Medicare Prescription Payment Plan while notably pulling back on three controversial proposals: AI restrictions, obesity medication coverage, and health equity paperwork requirements.

I've dug through the technical jargon so you don't have to. Let's break down what these changes actually mean for your day-to-day business and your clients.

Medicare Advantage Updates

Appeals Process Improvements

Good news! CMS is closing some Medicare Advantage appeals loopholes that may have given your clients headaches:

• No More Timing Games: Plans can't wiggle out of appeals by claiming the decision was made "during treatment." Now, decisions made before, during, or after service are all subject to appeals rights.
• Providers Stay in the Loop: When a provider submits a request for a client, the plan must notify both the provider and your client about the decision. No more info black holes!
• Client Protection for Ongoing Care: MA plans can't determine what your client owes until they've decided on the provider's payment claim. This keeps the appeal door open when treatments are ongoing.
• Restriction on Retroactive Denials: Plans are restricted from using information gathered after an inpatient admission has occurred when reviewing the appropriateness of the admission itself.

SSBCI Benefits Get Guardrails

Know those Special Supplemental Benefits for the Chronically Ill that MA plans offer? CMS is now drawing a clear line about what's NOT allowed:

• Non-healthy food (sorry, no pizza delivery benefit!)
• Alcohol (nope, not even "medicinal" wine)
• Tobacco products (obviously)
• Life insurance (that was a stretch anyway)

Part D Medication Updates

Insulin Cost Protections

These popular insulin benefits are now officially codified in regulation:

• No deductible for insulin products
• Monthly insulin costs capped at whichever is lowest:
  • $35 (the current cap)
  • 25% of the negotiated Medicare fair price
  • 25% of the plan's negotiated price

Important Insulin Cost-Sharing Clarifications

CMS has provided additional details about insulin cost-sharing:

• Dispensing Fees and Taxes Covered: If the applicable insulin cost-sharing amount is 25% of the maximum fair price, the plan is responsible for covering the dispensing fee and any applicable sales tax.
• $35 Cap is Absolute: While plans can charge less, the copayment cannot exceed $35 even if such copayment would otherwise be equal to no more than 25% of the negotiated price.

Vaccine Coverage Improvements

Vaccine benefits are also now officially codified in regulation:

• No deductible for ACIP-recommended adult vaccines
• No Playing Favorites: Part D sponsors cannot implement utilization management, step therapy, or NDC blocks to prefer one brand of a vaccine over another.
• Comprehensive Coverage Required: Plans must include all commercially available vaccines on their formularies.
• Limited Utilization Management: Plans can only use utilization management for vaccines in three specific scenarios:
  1. To assess necessity for vaccines rarely used in Medicare population (like anthrax)
  2. To ensure vaccines align with ACIP recommendations (like age requirements)
  3. To evaluate potential Part B coverage for injury/disease exposure

Vaccine Administration in Physician Offices

Good news for clients who prefer getting vaccines at their doctor's office:

• Physicians' Offices Qualify for Out-of-Network Access: CMS confirmed that receiving a vaccine in a physician's office constitutes a situation where out-of-network access is permitted.
• No More Upfront Payments: Two solutions are available to help beneficiaries avoid paying upfront and seeking reimbursement:
  1. A model vaccine notice for physicians that includes information for coverage authorization
  2. Web-assisted electronic billing systems where physicians can request reimbursement electronically

Medicare Prescription Payment Plan Updates

Monthly Payment Option Gets Easier

The Medicare Prescription Payment Plan that started last year is getting some tweaks:

• Auto-Renewal: Clients who sign up will be automatically renewed each year (unless they opt-out)
• This auto-renewal was specifically chosen by CMS to minimize burden for both beneficiaries and Part D sponsors
• CMS decided to keep the current 24-hour election processing time rather than implement real-time enrollment. This balances beneficiary needs with operational feasibility for plans and pharmacies.

Medicare Prescription Payment Plan Insights

CMS has clarified several aspects of the payment plan:

• Auto-Renewal With Plan Changes: If an enrollee switches between plans within the same contract, they would need to re-elect into the payment plan.
• Long-Term Care Residents Can Participate: CMS made special accommodations for LTC pharmacies to provide notice at their typical billing process rather than at point of sale.
• IHS Pharmacy Exemptions: IHS-eligible enrollees filling prescriptions at Indian Health Service pharmacies would not trigger the notification system since these pharmacies provide medications at no cost.

Pharmacist Responsibilities Clarified

CMS has addressed concerns about pharmacist responsibilities:

• No Documentation Requirements: Pharmacies are not required to track or document that the "Likely to Benefit" notice was delivered to enrollees.
• No Counseling Obligations: Pharmacies are not obligated to provide additional counseling about the payment plan; they only need to provide the standardized notice.
• No Processing Delays Allowed: Requirements should not delay medication dispensing; pharmacies should use existing touchpoints for notification.

Future Updates

D-SNP Changes Coming (But Not Until 2027)

If you work with dual-eligibles, heads up! By 2027, certain D-SNPs will need to:

• Create one integrated ID card that works for both Medicare and Medicaid (goodbye wallet-bulging multiple cards!)
• Perform just one health risk assessment instead of separate ones for Medicare and Medicaid (your clients will be quite happy about this streamlining)

What's NOT Changing

Several proposed provisions that had many of us concerned didn't make the final cut:

• AI Regulations Postponed: Those proposed restrictions for artificial intelligence in MA services? CMS pulled back on those.

• Weight Loss Meds Still Limited: The big push to expand Part D coverage for Anti-Obesity Medications (AOMs) didn't make it into the final rule.
  • Read more about that: Wegovy, Ozempic & Medicare: What Agents Need to Know Now
• No Health Equity Paperwork: The proposed annual health equity analysis of utilization policies? Not happening (at least for now).

Looking Ahead

Just because CMS didn't finalize those health equity analyses, AI guardrails, or obesity medication coverage doesn't mean they're gone for good. The agency specifically noted these might show up in future rulemaking.

Smart agents will keep an eye out for developments in these areas, as they could significantly impact how you do business in 2027 and beyond.

Want the nitty-gritty details? You can dive into the full rule at the Federal Register.