The Centers for Medicare & Medicaid Services proposed a rule on October 16, 2026, that would require Medicare Advantage plans to keep provider directories accurate, add new transparency requirements for pharmacy benefit managers, and eliminate generic drug copays for some low-income enrollees. The changes would take effect in 2028 if finalized.
Key Takeaways
- The proposed rule, CMS-4214-P, implements three sections of the Consolidated Appropriations Act, 2026, which became law on February 3, 2026.
- Medicare Advantage plans would have to verify provider directory information at least every 90 days and report an accuracy score to CMS.
- Enrollees who see an out-of-network provider because of an inaccurate directory listing would pay no more than in-network cost-sharing.
- Pharmacy benefit managers would report compensation and cost performance annually, and their pay would have to reflect fair market value rather than drug prices.
- Generic drug copays would drop from $1 to $0 for full-benefit dual-eligible enrollees at or below 100% of the federal poverty level starting January 1, 2028.
- The proposal opens for a 60-day public comment period after publication in the Federal Register.
The Proposal Puts Into Practice Changes Congress Already Passed
The proposal is not a new policy invented by the agency. It turns three provisions of the Consolidated Appropriations Act, 2026 into regulations: the REAL Health Providers Act on provider directories, a section modernizing pharmacy benefit manager accountability, and an adjustment to Part D cost-sharing for low-income enrollees.
That origin shapes what comes next. Because Congress set the core requirements, the comment period is likely to focus on how CMS defines terms, measures compliance, and enforces the rules, rather than on whether the changes happen at all. CMS Administrator Mehmet Oz said the proposals aim to give enrollees “more reliable information” and stronger financial protections.
Medicare Advantage Changes Target Inaccurate Provider Directories
Provider directories are one of the main tools Medicare Advantage enrollees use to find in-network doctors. When those listings are wrong, enrollees can end up with unexpected bills or delays in care.
Under the proposed rule, Medicare Advantage plans would have to verify and update directory information at least every 90 days, analyze accuracy each year, and report an accuracy score to CMS. Beginning with contract year 2029, plans would have to display those scores prominently in their directories, and CMS would publish them in a machine-readable format.
The proposal also adds a financial protection. An enrollee who relies on an inaccurate directory listing and receives care from an out-of-network provider would pay no more than the plan’s in-network cost-sharing amount. That shifts the cost of bad data from the patient to the plan.
PBM Reform Brings New Transparency to Part D
Pharmacy benefit managers act as middlemen in the prescription drug system, negotiating with drug manufacturers and managing pharmacy networks on behalf of Part D plans. PBM reform has drawn bipartisan attention because compensation tied to drug prices can create incentives that work against lower costs.
The proposed rule would require PBMs to report their compensation and cost performance to Part D plan sponsors and CMS each year. PBM payments would have to reflect the fair market value of the services provided, rather than being tied to drug costs. PBMs would also have to be transparent about price guarantee arrangements and disclose certain agreements with drug manufacturers to plan sponsors.
CMS proposes enforcement tools to back up the requirements, including disgorgement of funds to CMS for violations of the compensation rules.
Dual-Eligible Enrollees Would See $0 Generic Drug Copays
The most direct cost change applies to a specific group. Starting January 1, 2028, full-benefit dual-eligible individuals, meaning people enrolled in both Medicare and Medicaid, with incomes at or below 100% of the federal poverty level would see their generic drug copayment fall from $1 to $0.
The dollar amount is small, but for enrollees filling several generic prescriptions a month on very limited incomes, removing the copay eliminates a recurring cost.
Medicare Open Enrollment 2026 Choices Are Not Affected
The timing can cause confusion. Medicare open enrollment runs October 15 through December 7, 2026, for coverage that begins January 1, 2027. The changes in this proposed rule apply to contract year 2028, so they do not affect the plans Medicare beneficiaries are comparing now.
CMS has said it expects to release a separate proposed rule with broader Medicare Advantage and Part D policy and technical changes later this fall.
FAQs
What Is PBM Reform?
PBM reform refers to rules that change how pharmacy benefit managers are paid and how transparent they must be. CMS’s proposal would require PBMs in Medicare Part D to report compensation annually and receive payments based on fair market value rather than drug prices.
What Are Pharmacy Benefit Managers?
Pharmacy benefit managers are companies that manage prescription drug benefits for health plans, including negotiating with drug manufacturers and building pharmacy networks.
What Will Happen to Medicare Advantage in 2027?
This proposed rule does not change 2027 coverage. Its Medicare Advantage provider directory requirements begin in contract year 2028, with public display of accuracy scores starting in 2029.
What Changes for Medicare Enrollees in 2028?
If finalized, Medicare Advantage plans would face new directory accuracy requirements, enrollees misled by inaccurate directories would be protected from out-of-network cost-sharing, and full-benefit dual-eligible enrollees at or below 100% of the federal poverty level would pay $0 for generic drugs.
Is Medicare Advantage Going to Be Discontinued?
Nothing in this proposed rule ends Medicare Advantage. The proposal adds new accuracy and transparency requirements for Medicare Advantage plans beginning in 2028.
When Is Medicare Open Enrollment for 2026?
Medicare open enrollment runs October 15 through December 7, 2026, for coverage that starts January 1, 2027.
