Medicare Advantage Improvement Act of 2026

The Medicare Advantage Improvement Act of 2026 seeks to significantly reform the Medicare Advantage (MA) program by improving access to timely care, increasing oversight, and protecting providers from retrospective payment issues. Many provisions become effective on January 1, 2028.

To improve timely care, the bill mandates that MA organizations respond to standard authorization requests within 72 hours and expedited requests within 24 hours. It also requires MA plans to implement real-time authorization decisions for specific services, particularly those with high approval rates or low clinical risk, utilizing certified electronic health record technology. Furthermore, MA plans must publicly report detailed prior authorization data at various organizational levels.

The legislation prohibits MA organizations from requiring new authorizations for clinically necessary modifications or extensions to already approved items or services. It also streamlines the appeals process by requiring MA plans to submit reconsideration affirmations of denials to independent review entities within 14 days and sets clear timeframes for these entities to issue decisions.

A key component is the establishment of an MAO Compliance Scoring and Accountability Program, which will assess MA plans' adherence to program requirements, including timely authorizations, coverage criteria, and prompt payment. Plans failing to meet compliance thresholds will face financial penalties, with payment reductions ranging from 1.0% to 2.0% based on their compliance score. This compliance performance will also be integrated into the Medicare Advantage Star Ratings system, with a heavily weighted "MA Program Compliance and Coverage Protection Domain."

To safeguard against retrospective payment issues, the bill mandates prompt payment for 100% of qualifying claims for authorized items and services, treating them as "clean claims." Once an MA organization approves an item or service, it cannot later deny coverage based on medical necessity or reduce payment by changing claim codes, except in cases of good cause or fraud. The bill also limits the use of third-party entities for medical necessity reviews, prohibiting them from reviewing authorized services and from using automated processes for denials or having compensation tied to denial rates.

Finally, the bill ensures that MA plans apply medical necessity criteria consistent with traditional Medicare's "reasonable and necessary" standards, including the "two-midnight rule" for hospital admissions. For services without national or local coverage determinations, MA plans must use publicly available, evidence-based criteria. It also requires MA plans to meet adequate network standards for long-term care hospitals and inpatient rehabilitation facilities and implement automated payment processes for certain claims, limiting manual review to fraud cases.