CMS proposes rule to clean up MA provider directories, shine light on PBMs

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Dive Brief:

• The CMS proposed a rule on Friday that would implement key healthcare provisions in this year’s government funding package, including those targeted at improving the accuracy of Medicare Advantage plans’ provider directories and reforming how pharmacy benefit managers are paid.
• The rule would require MA plans to check that their provider directories are accurate — and update them if not — at least once every 90 days. In addition, seniors who end up getting care from an out-of-network provider because of an inaccurate directory won’t have to pay more than their in-network cost sharing amount.
• The rule also limits PBMs to flat service fees that can’t be based on factors like the price of a drug, the rebates it generates or its placement on a formulary. The drug middlemen would also be required to report information about their compensation and cost performance to plan sponsors and the CMS on an annual basis.

Dive Insight:

The Consolidation Appropriations Act of 2026, signed into law by President Donald Trump in February, ended a short government shutdown by approving funding through September. It also included notable reform for the healthcare industry, like the heightened standards for MA provider directories and stricter PBM oversight that the CMS moved to implement in Friday’s proposed rule.

The MA directory changes are aimed at giving the 36 million seniors in the privatized Medicare program more reliable information about what doctors and hospitals are covered by an MA plan when seeking out services or choosing between carriers.

Bad provider directories are a major problem, with one study from 2023 finding upwards of 80% of provider listings contained inconsistencies. In MA alone, a CMS review of directories from 2018 found inaccuracies ranging from 5% to 93% of all listings, depending on the plan examined.

The CMS finalized a rule last fall requiring MA plans to update their provider directories within 30 days of learning about changes, and attest at least once a year that directories are accurate. The new rule would heighten those standards, requiring rolling reviews and more frequent attestation.

The rule would also require plans to report an accuracy score to the CMS — and publicly post it on their directories.

The heightened provider directory verification and maintenance standards, annual accuracy analysis and cost-sharing protections for seniors would go into effect in 2028.

MA carriers would have until 2029 to publicly display accuracy scores in their provider lists.

Cleaning up insurer directories slots into the CMS’ larger focus on developing a national provider directory, a centralized repository that will include all provider directory information for all insurers in the U.S. The data it collects from MA organizations under Friday’s proposed rule could ultimately feed into that infrastructure, the CMS explained in the regulation.

“CMS has been working to improve data connectivity and accuracy in provider directories across the healthcare system,” CMS Administrator Dr. Mehmet Oz said in a statement, adding that the proposals will give seniors “more reliable information, stronger financial protections, and greater confidence” in Medicare.

The rule would also establish transparency and compensation requirements for PBMs, controversial middlemen in the pharmaceutical supply chain that have been criticized for opaque, self-serving business arrangements with drugmakers and pharmacies. It reforms how PBMs can be paid in Medicare Part D, by requiring their payments to reflect the “fair market value” for services provided and forcing them to pass through any rebates on drugs to the Part D plan sponsor.

PBMs would also have to share an annual report on spending and formulary decisions with their clients and the government, including details on what drugs were dispensed, where and what revenue the PBM retained from a transaction.

Friday’s proposed rule would also implement a section of the funding package loweing co-pays on generic drugs for low-income seniors dually eligible for Medicare and Medicaid from $1 to $0.

The CMS said it anticipates releasing another proposed rule of policy and technical changes for MA and Part D later this fall.