MA Gets 5% Bump in New Rule

The Centers for Medicare and Medicaid Services (CMS) issued a final Medicare Advantage technical rule that removes regulations for the use of artificial intelligence but maintains a Biden-era provision that restricts plans from modifying approved hospital decisions, and raises MA funding by 5%.

The rule also removed proposals for annual health equity analysis of utilization policies and coverage for GLP-1 agonists, STAT reports. Coverage for the weight loss drugs would have increased federal spending for Medicare by $25 billion and $15 billion for Medicaid over the next 10 years. Currently, Medicare only covers the drugs to treat diabetes and sleep apnea, and to prevent heart complications but not for weight loss purposes alone.

The final rule also includes a 5.06% average increase for premium rates for 2026 Medicare Advantage health plans. Reuters reports that the announcement sent shockwaves throughout the healthcare market, boosting shares of United Health, Elevance, Humana and other major insurers.

McKnight’s notes that under the final rule, MA plans will only be able to review or modify previously approved inpatient hospital decisions on the basis of information gathered at the hospital and not by the insurer’s own review. The provision aims to ensure that claims will continue to be honored after prior authorization is granted.

In a press release, CMS said that it was taking action to prevent “waste, fraud and abuse,” while maintaining access to critical services. It notes that CMS is completing a three-year phase-ins for the removal of medical education costs related to services MA enrollees receive and improvements to the risk adjustment model.