Newly released regulations governing Medicare Advantage (MA) and Part D next year are a mixed bag for physicians.
The rules for 2026 will provide some relief on the prior authorization (PA) front, but they’ll also aggravate clinicians champing for reimbursement relief as insurers get a huge financial boost.
In addition, the Trump administration decided to punt — for now — instead of address the hot topics of coverage for glucagon-like peptide 1 (GLP-1) agonist weight-loss drugs and the use of artificial intelligence (AI) in PA decision-making.
Earlier this month, the Centers for Medicare & Medicaid Services (CMS) issued the final 2026 rule regarding the MA health plan, which serves more than half the Medicare population, or about 33 million people, and the Medicare Prescription Drug Benefit Program, known as Part D.
The CMS also updated reimbursement rates for health plans.
Here are four things physicians should know about the new regulations.
There’s Nothing Unusual Happening. Really.
Christine M. Clements, JD, a partner and managed care law specialist with the Sheppard Mullin firm in Washington, DC, told Medscape Medical News that “there’s nothing drastic or surprising in this rule.”
In fact, she said, “the Trump administration is a fan of Medicare Advantage.”
Both Robert F. Kennedy, Jr, secretary of Health & Human Services, and Mehmet Oz, MD, MBA, administrator of the CMS, have supported the program, she noted. “To some extent, I think the final rule reflects that.”
PA Take-Backs Will Be Restricted
Health plans won’t be able to withdraw PA for inpatient care except in cases of “obvious error or fraud.” According to the CMS, “the goal of this provision is to ensure that if a plan approves an inpatient admission, it will have to honor the prior authorization.”
Clements said this means “plans cannot use additional clinical information that might be available after they make their decision to reopen a coverage decision” unless there’s fraud or an error such as a provider mistakenly saying that a patient had pain in their chest when it was actually their leg.
“That should be welcome news for providers who have expressed concern about the potential for coverage decisions to be reversed after the fact,” Clements said. Her firm represents both payers and providers.
The American Medical Association (AMA) has alleged that insurers “decide to back out of paying or try to recoup payment already made” after care has been provided. “Insurers will frequently cite vague reasons such as overpayment on their part, a redetermination that approved care was not medically necessary, or incomplete paperwork,” the AMA said in a 2024 post on its website.
Jeffrey Davis, MS, health policy director with McDermott+, a health policy organization in Washington, DC, told Medscape Medical News that the Trump administration is likely to address PA again, especially in light of comments by from Oz about limiting its use, he said.
“This isn’t the only bite at the apple. They’re going to have other opportunities to go forward,” Davis said, although there’s little time left to make major changes for 2026.
McDermott+ represents a variety of health-related clients, including medical associations and hospital systems.
As Physicians Clamor for Pay Relief, Health Plans Are Getting a Big Boost
The CMS announced that MA plans will get more reimbursement in 2026. KFF, a nonprofit health policy organization, estimates that plans will get 7.2% more in payments than this year’s — about $35 billion in total.
KFF noted that the boost “comes at a time of increasing scrutiny over Medicare Advantage payments, and government spending generally. In particular, the Medicare Payment Advisory Commission estimates that the federal government pays Medicare Advantage plans 20% more per person than it spends on similar people in traditional Medicare, at a cost of $84 billion in 2025.”
Clements agreed that physicians are frustrated by the increase in payments to insurers in light of their long struggle to increase their own Medicare reimbursements. “They’re not happy that the plans got it, but they didn’t.”
However, Clements noted some physicians get reimbursed with a percentage of the MA premiums that patients pay. “This would be very beneficial to them.”
The New Regulations Leave Some Hot Topics Unresolved — for Now
The CMS delayed decisions on whether MA should cover GLP-1 agonist weight-loss drugs and whether there should be rules regarding the use of AI in PA decisions.
Kennedy did tell CBS News that “he’s considering a proposal for Medicaid and Medicare to cover the drug once patients have established they’ve exhausted other options.”
As for the use of AI in PA, Lynn Nonnemaker, PhD, a senior director with McDermott+, said the CMS didn’t give any hints about the direction they may go. “They seem to be saying that while they are not doing rulemaking on AI now, they are actively thinking about it for the future.”