CMS Proposes Medicare Advantage Directory Reforms and PBM Overhaul

The Centers for Medicare and Medicaid Services has issued a proposed rule designed to tackle inaccurate provider directories in Medicare Advantage plans and implement new transparency mandates for pharmacy benefit managers. Released following legislative directives from a recent congressional appropriations package, the proposal aims to protect beneficiaries from unexpected medical costs and care disruptions.

Addressing Inaccurate Provider Directories

Under the proposed framework, Medicare Advantage plans would be required to verify and update their provider directories at least once every 90 days. The agency announced that the resulting accuracy scores would be prominently featured within plan directories and published in a machine-readable format to help beneficiaries evaluate plan reliability during enrollment choices.

Additionally, the rule proposes that if an incorrect directory listing misleads a beneficiary into seeing a provider they believed was in-network, plans must limit the enrollee’s cost sharing to in-network rates. According to the agency, these directory reviews and associated financial protections are scheduled to take effect for the 2028 contract year, with the public display of accuracy scores slated for 2029.

Pharmacy Benefit Manager and Copay Adjustments

The regulatory package also addresses Part D pharmacy benefit managers by proposing restrictions on how they are compensated. CMS stated that PBM compensation could no longer be tied to the list price of drugs, shifting instead toward reflecting the fair market value of services provided. The proposal further outlines new reporting, disclosure, and transparency requirements for PBM operations.

In a separate provision set to begin January 1, CMS moved to codify a reduction in generic drug copayments for dual-eligible beneficiaries living at or below the Federal Poverty Level, lowering the maximum copayment from one dollar to zero. Agency officials note that removing this barrier is intended to support better medication adherence.

Anticipated Financial Impacts

In the regulatory text, CMS acknowledged that the new provider directory mandates will likely increase administrative and compliance expenses for Medicare Advantage organizations. Regarding the proposed PBM alterations, the agency stated it currently lacks sufficient data on existing contract and fee structures to project the financial outcomes. Meanwhile, the federal Medicare program will absorb the costs associated with eliminating generic drug copayments for qualifying dual-eligible individuals.

• Provider directories must be verified every 90 days under the proposed rule.
• Cost sharing for enrollees affected by inaccurate listings would be capped at in-network rates.
• PBM compensation tied to drug list prices would be restricted.