H.R. 8375 — Medicare Advantage Improvement Act of 2026

This section revises timeframes under Medicare Advantage (MA) plans for standard organization determinations on specified authorization requests (i.e., prior authorizations, preservice or concurrent coverage/payment decisions, or transfers between hospitals or to post-acute care) to no later than 72 hours after receipt (from 14 calendar days), and for expedited determinations to no later than 24 hours after receipt (from 72 hours), for requests on or after January 1, 2028. It permits MA organizations to extend either deadline by up to 7 calendar days if requested by the enrollee, needed for additional evidence from non-contracted providers, or justified by exigent circumstances; authorizes the Secretary, for requests on or after January 1, 2030, to adjust these deadlines via notice-and-comment rulemaking; and, beginning with plan years on or after January 1, 2028, requires MA organizations to report prior authorization data at the plan and parent-organization levels (in addition to contract level), by provider and service category, in a downloadable format accessible for research, oversight, and enforcement. This section further requires real-time authorization decisions for certain identified services.

This section establishes a Medicare Advantage organization (MAO) compliance scoring and accountability program (MAO Compliance Program) for plan years beginning on or after January 1, 2028. Under the program, the Secretary assesses, at the plan level via audits, reporting, and performance measures, each MAO's compliance across categories including (1) timely and real-time authorization decisions, (2) coverage criteria standards, (3) prompt payment requirements, (4) restrictions on improper retroactive denials and downgrades, (5) marketing, enrollment, and beneficiary communication requirements, and (6) other requirements; assigns a total compliance score (0-100 scale, weighted by plan enrollment); and places the MAO into one of four compliance tiers. MAOs in the three lowest tiers receive monthly payment reductions under Medicare Advantage plans of 1.0 percent, 1.5 percent, or 2.0 percent, respectively, based on performance in the prior period. (The Secretary may update compliance categories and program methods through notice-and-comment rulemaking.)

This section establishes requirements limiting Medicare Advantage (MA) organizations' ability to retroactively deny or reduce payment for authorized items and services (i.e., those approved via specified prior authorization during provision to enrollees), effective for contract or plan years beginning on or after January 1, 2028. Specifically, the section (1) amends MA prompt payment rules under SSA §1857(f) to require 100% payment (from 95%) within specified timelines for qualifying claims (i.e., those with sufficient proof of prior authorization) submitted for such authorized items and services furnished by any provider or supplier, deeming all such claims clean; (2) adds SSA §1857(e)(6) to prohibit MA organizations from subsequently denying coverage of authorized items and services due to medical necessity (absent good cause or fraud) or changing assigned codes to reduce payment (absent good cause or fraud); and (3) adds SSA §1852(g)(6) to bar MA organizations from using third-party entities for medical necessity reviews of authorized items and services (unless compliant with Secretary-specified audit protocols and appeal rights), routine automated denials, pattern-based post-service code-downcoding to reduce payments, or incentive-based compensation tied to approval/denial rates/volumes.

This section codifies, for Medicare Advantage (MA) organizations' hospital and critical access hospital admission determinations, the two-midnight benchmark and presumption rules under 42 CFR 412.3(d) and the presumption finalized in the August 19, 2013, Federal Register rule (78 Fed. Reg. 50952), or successors, applied in the same manner as under Medicare Part A. The section further requires that, for coverage determinations, reconsiderations, and independent reviews on or after January 1, 2028, MA organizations and independent reviewers (1) apply no more restrictive medical necessity criteria than the "reasonable and necessary" standards under SSA section 1862(a)(1) for Medicare Parts A and B; (2) for inpatient services at rehabilitation facilities or long-term care hospitals, apply no more restrictive criteria than specified regulations and statutes for those facilities under Parts A and B (i.e., 42 CFR 412.622(a)(3)-(5) for rehabilitation facilities; SSA sections 1861(ccc)(1),(3),(4) and 1886(m)(6)(A)(iii),(iv) for long-term care hospitals); and (3) use only physicians or health care professionals with appropriate expertise for such reviews. (Thus, MA plans must align coverage more closely with traditional fee-for-service Medicare standards.) It also subjects noncompliance to intermediate sanctions under SSA section 1857(g). Additionally, for plan years beginning on or after January 1, 2028, the section requires MA organizations, for items or services lacking a national coverage determination, local coverage determination, or Secretary guidance, to base coverage determinations on publicly available, evidence-based criteria published on the organization's public website and to submit related medical necessity determination information to the Secretary.

This section revises prompt payment requirements for Medicare Advantage (MA) organizations under SSA §1857(f) as follows: (1) extends fee-for-service clean claim prompt payment standards to both in-network and out-of-network services (previously limited to out-of-network), regardless of whether services are furnished under a contract between the organization and the provider, and specifies that such clean claims may not subsequently be denied except under circumstances and criteria established by the Secretary through notice-and-comment rulemaking; and (2) requires, for plan years beginning on or after January 1, 2028, automated processing and payment—without manual review except in cases of reasonable evidence of fraud—for clean claims that are either for authorized items or services or identified on the Secretary's most recent list under SSA §1852(g)(1)(D)(iii). (As background, MA prompt payment provisions ensure timely reimbursement to providers and suppliers for medically necessary services under private MA plans that serve approximately half of Medicare beneficiaries.)

This section requires Medicare Advantage organizations, for plan years beginning on or after January 1, 2028, to provide adequate access to long-term care hospitals and inpatient rehabilitation facilities as determined in accordance with network adequacy standards specified by the Secretary. (Thus, these standards—which ensure enrollees' access to necessary providers—are expanded to include these specialized post-acute care facilities.)