CMS Draft 2026 MA/PACE Rule Addresses Prior Authorization and Supplemental Benefit Cards
(Dec. 3, 2024) On Nov. 26th, the Centers for Medicare and Medicaid Services (CMS) released its draft 2026 proposed policy and technical regulations for Medicare Advantage (MA) plans, Programs of All-Inclusive Care for the Elderly (PACE programs), and Part D plans. The draft proposed rule includes a host of changes intended to strengthen consumer protections, reduce barriers to care, and promote informed consumer choice. The proposal addresses several key areas that have been targets of advocacy by LeadingAge National for additional clarification and increased oversight: internal coverage criteria, prior authorization, utilization management, and the use of artificial intelligence. It also includes important clarifications on the administration and use of debit ("flex") cards as supplemental benefits.
Of particular note for LeadingAge NY members, the draft proposed rule builds upon the 2024 final rule's utilization management provisions which clarified that MA plans must offer the same scope of coverage as Traditional Medicare, must use the same coverage criteria as Traditional Medicare (e.g., national coverage determinations and local coverage determinations), and may use internal coverage criteria only when Traditional Medicare coverage criteria are not established. The draft 2026 proposed rule strengthens the 2024 provisions by defining the phrase “internal coverage criteria,” establishing guardrails to preserve access to benefits, and adding more specific rules about publicly posting internal coverage criteria content on MA organization websites.
LeadingAge NY members that sponsor or are affiliated with MA plans will be interested in the draft proposed rule's request for information on whether CMS could and should adopt policies regarding how the MA and Part D medical loss ratios (MLRs) are calculated to address concerns surrounding vertical integration in MA and Part D. The draft raises concerns that "MLR reporting may be less transparent for integrated medical systems where the MA organization or Part D sponsor is a subsidiary, owner, or affiliate in such a system." The draft claims that "payments made to related parties may, in some cases, be inflated to ensure the MA organization or Part D sponsor meets its MLR reporting requirements."
PACE programs will note that the draft proposed rule codifies what CMS characterizes as longstanding practices regarding the reporting of risk adjustment data by PACE programs. The draft also reorganizes and renumbers certain provisions related to PACE participant rights and contracted services that it describes as technical changes. These include changes related to the right to treatment, the right to be treated with dignity and respect, and the minimum services that must be delivered at a PACE center.
The draft proposed rule's flex card clarifications seek to ensure that beneficiaries know what supplemental benefits are available, have assistance and information about accessing the benefits, and that the supplemental benefits are both accessible and adequate to the enrollee’s needs. Unfortunately, the rules do not address whether these flex cards should be counted as income when determining an individual’s eligibility for various government assistance programs.
LeadingAge National will be reviewing the details of the proposed rule and providing further analysis. The fact sheet for the proposed rule is available here, and the draft proposed rule is available here. The official version of the proposed rule is scheduled to be published in the Federal Register on Dec. 10, 2024. LeadingAge National's statement on the proposed rule is here.
Members are reminded that this is a proposed rule and that comments will be due Jan. 27, 2025. The new Trump Administration will likely review the proposed rule for alignment with its policy goals and may choose not to finalize some or all of the rule.
Contact: Karen Lipson, klipson@leadingageny.org