2026 Medicare Advantage and Medicare Part D Prescription Drug Payment Policy and Part D Redesign Program Instructions

The Centers for Medicare & Medicaid Services (CMS) recently finalized MA and Part D updates to payment factors for calendar year 2026. For MA plans, CMS projects an average increase in payment rates of 5.06%, representing a $25 billion increase in payments. CMS attributes the increase to the growth in Medicare Fee-for-Service (FFS) per capita costs. More information on the payment updates can be found here. Additionally, CMS released the Final Calendar Year (CY) 2026 Part D Redesign Program Instructions. The Program Instructions provide guidance for CY 2026 regarding implementing the Inflation Reduction Act of 2022’s (IRA) changes to the defined standard Part D drug benefit structure. The key changes include the CY 2026 annual out-of-pocket (OOP) threshold of $2,100, guidance on the successor regulation exception to the IRA’s formulary inclusion requirement for selected drugs, and the revised simplified determination methodology for creditable drug coverage, among other guidance.