Medicare Advantage prior authorization, marketing limits proposed

Medicare Advantage insurers would no longer be allowed to reconsider approved prior authorization requests for inpatient hospital admissions and face new limits on using artificial intelligence for precertifications under a proposed rule issued Tuesday.

The Centers for Medicare and Medicaid Services draft regulation also would introduce Medicare and Medicaid coverage of glucagon-like peptide-1 receptor agonists, or GLP-1s, such as Ozempic and Zepbound, to treat obesity as a chronic disease. That blockbuster new policy, like the rest of the proposed rule, is subject to significant uncertainty because President-elect Donald Trump's team will be responsible for finalizing it next year.

Related: Biden proposes Medicare, Medicaid coverage of weight-loss drugs

The Medicare Advantage and Medicare Part D proposed rule for 2026 is likely the final plank in outgoing President Joe Biden's agenda for these programs. The Biden administration has implemented numerous rules and policy changes to curb Medicare Advantage spending and rein in business practices that have riled providers and enrollees, such as increasingly stringent prior authorization requirements.

“Our loved ones with Medicare deserve care that puts their interests first," Health and Human Services Secretary Xavier Becerra said in a news release Tuesday. "HHS is proposing to improve transparency, accountability and consumer protections in Medicare Advantage and Part D plans so that everyone receives high-quality care."

Prior authorization and AI

Building on previous rulemaking, CMS proposes new policies designed to reduce the prior authorization burden on providers and beneficiaries.

A key provision would bar Medicare Advantage insurers from refusing to pay claims for inpatient hospital admissions previously approved through the prior authorization process.

The agency also seeks to refine the definition of the “internal coverage criteria” Medicare Advantage carriers may sometimes use in lieu of Medicare benefit standards.

CMS aims to provide greater clarity about when health insurance companies may adopt different coverage rules than fee-for-service Medicare. The proposed rule also would require Medicare Advantage insurers to make their coverage criteria publicly available and to provide more information about appealing denials.

“What we are trying to do is both tighten up and make clinically appropriate coverage criteria, and make sure that people know what those criteria are and that they know that they can appeal if they have a denial,” Center for Medicare Director Dr. Meena Seshamani said during a news conference Tuesday.

Amid widespread concern about the use of AI for prior authorization requests, the regulation states insurers that automate reviews would be required to "provide equitable access to services and not discriminate on the basis of any factor that is related to the enrollee’s health status."

Medicare marketing

The proposed rule would strengthen CMS oversight of Medicare Advantage and Part D marketing and advertising to supplement the agency's prior policymaking.

CMS already reviews Medicare plan ads promoting specific companies and products. The draft regulation would extend the agency's reach to more generic ads that invite consumers to seek information about Medicare benefits, then direct them to insurance companies or to brokers representing particular insurers.

"CMS is concerned that the current narrow definition of marketing has created a loophole that has been used by MA organizations, Part D sponsors and their downstream entities and resulted in the proliferation of misleading and confusing marketing practices that currently fall outside our scope of review," the proposed rule says.

The regulation also would mandate that brokers provide customers with more information about their coverage options. Brokers would be required to explain the eligibility standards for low-income subsidies and the Medicare Savings Programs, and to disclose that enrolling into Medicare Advantage could limit their ability to switch to fee-for-service Medicare with Medigap supplemental coverage in the future.

Medicare Advantage and Part D networks

Under the proposed rule, health insurance companies would have to provide CMS with provider lists in a format that enables the agency to add the information to the Medicare Plan Finder. Insurers would have to update their network listings within 30 days of a provider joining or leaving.

Medicare Part D insurers would further be required to notify pharmacies of their network status prior to the annual enrollment period and permit them to withdraw without cause, just as insurers are allowed to remove pharmacies from their networks.

Medical loss ratios

CMS proposes additional limits on what expenses Medicare carriers may designate as medical when calculating medical loss ratios, which measure the share of premiums spent on care.

For example, insurers would not be allowed to include administrative costs associated with quality improvement programs and would only be permitted to include provider incentive and bonus arrangements when they are linked to clinical or quality improvement metrics.

GLP-1s and Medicare, Medicaid

The proposed rule sets up a tricky political decision for the incoming Trump administration by allowing Medicare insurers to cover GLP-1s for obesity.

Federal law does not allow Medicare to pay for weight-loss medications, but the Biden administration categorizes obesity as a chronic condition in the regulation, which CMS asserts makes this policy permissible. The regulation also would add GLP-1s for obesity to Medicaid benefits.

Demand for these medications is extremely high and Medicare and Medicaid beneficiaries may welcome access to them. But it would come at great cost to taxpayers, and Trump's picks for the top jobs overseeing the program have expressed very different views about the value of GLP-1s.

Robert F. Kennedy Jr., whom Trump plans to nominate as HHS secretary, has spoken critically about GLP-1s, including during an appearance on Fox News last month.

"No, it isn't," Kennedy said when host Greg Gutfeld asked if Ozempic would "Make America Healthy Again," using Kennedy's slogan. "There's a huge push to sell this to the American public," Kennedy said. "They're counting on selling it to Americans because we're so stupid and so addicted to drugs."

Dr. Mehmet Oz, Trump's choice to lead CMS, has actively promoted GLP-1s on his television program and social media platforms.

In 2021, for example, Oz hosted a segment on his show touting the drugs' weight-loss benefits in conjunction with lifestyle changes. "You feel less hungry, so you eat less food, which could lead to weight-loss," he said.

In a TikTok post last year, Oz said, "Now the question is how we, as a nation, can make these medications more affordable."

This June, Oz pitched dietary supplements from a company called iHerb that are supposed to be taken alongside GLP-1s. "Incorporating GLP-1 support products into daily routines can enhance one's health and wellness journey by making the side effects from treatment more manageable," Oz said in a news release that describes him as "iHerb's global advisor and stakeholder."

A decade ago, Oz came under fire for endorsing ineffective weight-loss supplements.

Insurance industry reaction

"Recent Medicare Advantage policy changes have caused coverage disruptions for millions of seniors, with plan closures, higher costs and reduced benefits," Better Medicare Alliance President and CEO Mary Beth Donahue said in a news release Tuesday. "Seniors need stability, and federal policymaking should reflect that."

Ceci Connolly, president and CEO of the Alliance of Community Health Plans, praised the proposed rule's marketing provisions, but expressed concern about GLP-1s.

"The excessive prices drugmakers command for GLP-1s have enormous cost consequences for consumers, taxpayers and employers," Connolly wrote in an email. "There are limited long-term studies of these drugs on patients with obesity, particularly those who do not have diabetes or other related chronic conditions. Early studies also indicate many patients do not remain on these drugs and regain the weight."

The health insurance trade groups AHIP and the Blue Cross Blue Shield Association are still reviewing the rule, spokespeople said.

The American Hospital Association lauded the provisions on prior authorizations, internal coverage criteria, medical loss ratios and AI. "The AHA commends CMS for taking important steps to increase oversight of 2026 Medicare Advantage plans to help ensure enrollees have equal access to medically necessary healthcare services," Ashley Thompson, senior vice president for public policy analysis and development, said in a news release Tuesday.

UnitedHealth Group, the Association for Community Affiliated Plans and the American Medical Association declined to comment. Humana, CVS Health subsidiary Aetna and Cigna did not comment when requested.