This Act may be cited as the “Medicare Advantage Improvement Act of 2026”.

(a) Reducing timeframes for Medicare Advantage organizations To respond to certain authorization requests.—

(1) STANDARD ORGANIZATION DETERMINATIONS.—Section 1852(g)(1) of the Social Security Act (42 U.S.C. 1395w–22(g)(1)) is amended—

(A) in subparagraph (A), in the second sentence, by inserting “subparagraph (C) and” after “Subject to”;

(B) in subparagraph (B), by striking “Such a determination” and inserting “A determination described in subparagraph (A) or (C)”; and

(C) by adding at the end the following new subparagraph:

“(C) REQUIRED TIMEFRAMES FOR RESPONSES TO CERTAIN AUTHORIZATION REQUESTS.—

“(i) IN GENERAL.—Subject to clause (ii) and paragraph (3)(B)(iii), the procedure established pursuant to subparagraph (A) by a Medicare Advantage organization offering an MA plan shall provide that in the case of a request made on or after January 1, 2028, for a specified authorization (as defined in clause (iii)) with respect to an individual enrolled under such plan, the Medicare Advantage organization must notify the individual (and the provider of services or supplier involved, as appropriate) of the determination regarding such request as expeditiously as the health condition of the individual requires, but, subject to clause (iv), not later than 72 hours after receipt of the request.

“(ii) EXTENSIONS.—Subject to clause (iv), a Medicare Advantage organization offering an MA plan may extend the deadline applied under clause (i) or the deadline applied under paragraph (3)(B)(iii)(II), as applicable, with respect to a determination regarding a specified request for an individual enrolled under the MA plan, by up to 7 calendar days if—

“(I) the individual requests the extension;

“(II) the extension is needed for purposes of obtaining additional relevant medical evidence from a provider of services or supplier that does not have a contract with the MA organization to furnish items and services to individuals enrolled under the MA plan; or

“(III) the extension is in the individual’s interest and is justified by reason of extraordinary, exigent, or other nonroutine circumstances that are not within the reasonable control of the MA organization (as determined by the Secretary).

“(iii) SPECIFIED AUTHORIZATION DEFINED.—For purposes of this part, the term ‘specified authorization’—

“(I) means, with respect to an individual enrolled under an MA plan offered by a Medicare Advantage organization, an authorization of coverage or payment for an item or service through—

“(aa) a prior authorization or preservice determination of coverage or payment; or

“(bb) a concurrent determination made while the individual is receiving the relevant item or service; and

“(II) includes an authorization for a transfer of the individual between hospitals or between a hospital and post-acute care facility.

“(iv) SECRETARIAL AUTHORITY.—With respect to requests for a specified authorization made on or after January 1, 2030, in carrying out clause (i) and (ii) and paragraph (3)(B)(iii)(II), the Secretary may specify through notice and comment rulemaking a deadline other than the deadline specified in the relevant clause or paragraph.”.

(2) EXPEDITED ORGANIZATION DETERMINATIONS.—Section 1852(g)(3)(B)(iii) of the Social Security Act (42 U.S.C. 1395w–22(g)(3)(B)(iii)) is amended—

(A) by striking “Timely response.—In cases described” and inserting: Timely reponse.—

“(I) IN GENERAL.—Subject to subclause (II), in cases described”; and

(B) by adding at the end the following new subclause:

“(II) REDUCING EXPEDITED TIMEFRAMES FOR RESPONSES TO CERTAIN AUTHORIZATION REQUESTS.—Subject to paragraph (1)(C)(ii), in cases described in clauses (i) and (ii) that are related to an expedited determination for a specified authorization (as defined in paragraph (1)(C)(iii)) for which a request is submitted on or after January 1, 2028, the Medicare Advantage organization shall notify the enrollee (and the physician involved, as appropriate) of the determination under time limitations established by the Secretary. Subject to paragraph (1)(C)(iv), such notification shall be made not later than 24 hours after the receipt of the request for the determination (or receipt of the information necessary to make the determination).”.

(3) IMPROVED TRANSPARENCY OF CERTAIN PRIOR AUTHORIZATION INFORMATION ON THE MA PLAN LEVEL.—Beginning with plan years beginning on or after January 1, 2028, in carrying out the provisions of section 422.122(c) of title 42, Code of Federal Regulations (or any successor regulation), the Secretary of Health and Human Services shall—

(A) require Medicare Advantage organizations to report prior authorization data described in such section on the plan level and on the Medicare Advantage organization parent level in addition to the contract level;

(B) require Medicare Advantage organizations to report prior authorization data described in such section in a manner that allows comparison of such data based on provider and service category; and

(C) in addition to making such data publicly available, as described in such section, make such data available in a downloadable format that is accessible for research purposes and oversight and enforcement activities of the Secretary.

(b) Real-Time authorization decisions for certain identified services.—Section 1852(g)(1) of the Social Security Act (42 U.S.C. 1395w–22(g)(1)), as amended by subsection (a), is further amended—

(1) in subparagraph (A), in the second sentence, by striking “subparagraph (C) and” and inserting “subparagraphs (C) and (D) and”;

(2) in subparagraph (B), by striking “A determination described in subparagraph (A) or (C)” and inserting “A determination described in subparagraph (A), (C), or (D)”;

(3) in subparagraph (C)(i), by striking “Subject to clause (ii)” and inserting “Subject to clause (ii), subparagraph (D),”; and

(4) by adding at the end the following new subparagraph:

“(D) REAL-TIME AUTHORIZATION DECISIONS FOR IDENTIFIED SERVICES.—

“(i) IN GENERAL.—The procedure established pursuant to subparagraph (A) shall require that the Medicare Advantage organization has in place a mechanism and process through which, beginning January 1, 2028, the organization provides a real-time determination, in accordance with this subparagraph, in response to any request for a specified authorization (as defined in subparagraph (C)(iii)) that is—

“(I) made with respect to an item or service identified on the most recent list published pursuant to clause (iii); and

“(II) submitted through certified EHR technology (as defined in section 1848(o)(4)).

“(ii) REQUIREMENTS FOR REAL-TIME MECHANISM AND PROCESS.—The mechanism and process required under clause (i) shall—

“(I) include real-time tools capable of providing immediate automated approvals;

“(II) provide for the integration of such tools in a manner that is interoperable with certified EHR technology (as so defined) used by providers of services and suppliers; and

“(III) enable immediate notification to the provider of services or supplier, as applicable, of determinations, including, in the case of a denial, notification of any additional documentation needed.

“(iii) ANNUAL PUBLICATION OF LIST OF IDENTIFIED SERVICES REQUIRING REAL-TIME AUTHORIZATION SUPPORT.—For purposes of this subparagraph, for each plan year beginning on or after January 1, 2028, the Secretary shall annually establish through notice and comment rulemaking a list identifying the following items and services:

“(I) Items and services for which, with respect to the previous plan year, at least 90 percent of requests for a specified authorization were approved across all Medicare Advantage organizations.

“(II) Items and services that are clinically low-risk and routine, as defined by the Secretary through notice and comment rulemaking.

“(III) Items and services that the Secretary identifies, according to standards specified by the Secretary through notice and comment rulemaking, as representative of significant service volume and administrative burden for acquiring such a specified authorization.

“(iv) IMPROVING TRANSPARENCY.—

“(I) QUARTERLY MAO REPORTS TO CMS.—Beginning January 1, 2028, and quarterly thereafter, each Medicare Advantage organization offering an MA plan shall submit to the Secretary (in a form and manner specified by the Secretary) information (presented by provider and service type) regarding real-time determinations made by the organization during the previous quarter pursuant to this subparagraph, including information on—

“(aa) the number of real-time determinations made during the quarter, and the percentage of all determinations made during the quarter with respect to an item or service identified on the most recent list published pursuant to clause (iii) that were real-time determinations;

“(bb) the number and percentage of real-time determinations made during such quarter that were approved;

“(cc) the number and percentage of such determinations that were denied;

“(dd) the number and percentage of such denied determinations that were appealed;

“(ee) the number and percentage of such appealed determinations that were overturned; and

“(ff) the number and percentage of provider complaints regarding the mechanism and process implemented by the Medicare Advantage organization pursuant to this subparagraph.

The information submitted pursuant to the previous sentence shall include such information and be provided in such a manner to enable comparison and analysis of such information on the Medicare Advantage organization level, Medicare Advantage parent organization level, and MA plan level.

“(II) PUBLIC AVAILABILITY OF INFORMATION.—The Secretary shall make information collected under subclause (I) publicly available on the internet website of the Centers for Medicare & Medicaid Services.”.

(c) Prohibiting certain authorization processes for certain clinically necessary changes and extensions.—Section 1852(d) of the Social Security Act (42 U.S.C. 1395w–22(d)) is amended by adding at the end the following new paragraph:

“(7) PROHIBITION ON REQUIRING CERTAIN AUTHORIZATIONS.—Beginning January 1, 2028, in the case that a Medicare Advantage organization offering an MA plan provides approval through a specified authorization (as defined in subsection (g)(1)(C)(iii)) for an item or service to be furnished to an individual enrolled in the plan by a provider of services or supplier, if during the course of furnishing such approved item or service the provider of services or supplier determines that a modification, extension, or adjustment to such item or service is clinically necessary, the Medicare Advantage organization may not require a specified authorization (as defined in subsection (g)(1)(C)(iii)) to be requested with respect to such item or service as so modified, extended, or adjusted. Application of the previous sentence shall not limit the authority of the Medicare Advantage organization to require documentation or post-service notification of any such modification, extension, or adjustment.”.

(d) Improvements to the reconsiderations process.—Section 1852(g) of the Social Security Act (42 U.S.C. 1395w–22(g)) is amended—

(1) in paragraph (2)—

(A) in subparagraph (A), by inserting “(or, with respect to determinations made on or after January 1, 2028, not later than 14 days)” after “60 days”; and

(B) by adding at the end the following new subparagraph:

“(C) RECONSIDERATIONS AFFIRMING DENIALS OF COVERAGE.—If a reconsideration affirms (in whole or in part) a denial of coverage (including an adverse organization determination under section 422.590 of title 42, Code of Federal Regulations, or any successor regulation) made on or after January 1, 2028, with respect to an individual enrolled in an MA plan offered by a Medicare Advantage organization, the Medicare Advantage organization shall submit to the independent, outside entity with a contract under paragraph (4) the case file and written explanation of the decision as expeditiously as the individual’s health condition requires, but not later than 14 days after the date the Medicare Advantage organization received the request for the reconsideration.”; and

(2) in paragraph (4)—

(A) by striking “coverage denials.—The Secretary shall contract with” and inserting: coverage denials.—

“(A) IN GENERAL.—The Secretary shall contract with”; and

(B) by adding at the end the following new subparagraphs:

“(B) REQUIREMENTS.—In reviewing and resolving pursuant to subparagraph (A) a reconsideration of a determination of a Medicare Advantage organization made on or after January 1, 2028, with respect to an individual enrolled in an MA plan offered by the organization, the independent, outside entity shall comply with each of the following requirements:

“(i) NOTICE AND OPPORTUNITY TO PROVIDE SUPPORTING DOCUMENTATION.—The entity shall—

“(I) not later than 3 days after the date of receipt of the relevant case file from the Medicare Advantage organization, submit to the individual, the representative of the individual (if applicable), and the provider of services or supplier furnishing (or ordering) the item or service that is the subject of the determination, a notification regarding the opportunity to submit documentation, including medical records, regarding medical necessity; and

“(II) provide a period of 7 days from the date of receipt of such notification for submission of any such documentation.

“(ii) DECISION TIMEFRAME.—After reviewing and considering all supporting documentation received before the end of the 7-day period described in clause (i)(II), the entity shall issue its decision with respect to such reconsideration as expeditiously as the individual’s health condition requires, but by not later than the applicable number of days specified in subparagraph (C) after the last day of the 7-day period described in clause (i)(II).

“(C) APPLICABLE NUMBER OF DAYS.—For purposes of subparagraph (B)(ii), the applicable number of days specified in this subparagraph is—

“(i) 14 days, in the case of a request (other than with respect to an expedited reconsideration under paragraph (3)) for coverage of an item or service that is not a drug for which payment may be made under part B;

“(ii) 7 days, in the case of a request (other than with respect to an expedited reconsideration under paragraph (3)) for coverage of a drug for which payment may be made under part B;

“(iii) 30 days, in the case of a request (other than with respect to an expedited reconsideration under paragraph (3)) for payment of an item or service; and

“(iv) 24 hours, in the case of a request with respect to an expedited reconsideration under paragraph (3).”.

(a) MAO compliance scoring and accountability program.—Section 1853 of the Social Security Act (42 U.S.C. 1395w–23) is amended by adding at the end the following new subsection:

“(p) Compliance scoring and enforcement.—

“(1) PAYMENT REDUCTIONS FOR MAOS IN NONCOMPLIANCE WITH CERTAIN MA PROGRAM REQUIREMENTS.—

“(A) IN GENERAL.—In the case of a Medicare Advantage organization with a contract under this part that the Secretary determines, in accordance with this subsection, to be within a compliance tier specified in subparagraph (B) for a performance period with respect to a plan year beginning on or after January 1, 2028, the Secretary shall reduce the total of the monthly payments made for the plan year under section 1853(a)(1) to the Medicare Advantage organization with respect to each Medicare Advantage plan offered by such organization by the applicable percent specified under subparagraph (B) with respect to the compliance tier.

“(B) APPLICABLE PERCENT SPECIFIED.—For purposes of subparagraph (A), the applicable percent specified under this subparagraph is as follows:

“(i) With respect to the compliance tier described in paragraph (5)(B), 1.0 percent.

“(ii) With respect to the compliance tier described in paragraph (5)(C), 1.5 percent.

“(iii) With respect to the compliance tier described in paragraph (5)(D), 2.0 percent.

“(C) PERFORMANCE PERIOD.—For purposes of this subsection, the Secretary shall establish a performance period (or periods) for each plan year beginning on or after January 1, 2028. Such performance period (or periods) shall begin and end prior to the beginning of the plan year and be as close as possible to such plan year. In this subsection, such performance period (or periods) for a plan year shall be referred to as the performance period with respect to the plan year.

“(2) ESTABLISHMENT OF COMPLIANCE SCORING AND ACCOUNTABILITY PROGRAM.—For purposes of this subsection, the Secretary shall establish a Medicare Advantage organization compliance scoring and accountability program (referred to under this subsection as the ‘MAO Compliance Program’) under which, for each Medicare Advantage organization with a contract under this part and each performance period with respect to a plan year beginning on or after January 1, 2028, the Secretary—

“(A) using the method established under paragraph (3)(A), shall assess the extent to which the Medicare Advantage organization is in compliance with requirements under this part applicable to each compliance category specified under paragraph (3)(B);

“(B) based on such assessments for each such compliance category, shall assign a total compliance score to the Medicare Advantage organization, in accordance with paragraph (4); and

“(C) based on such total compliance score, shall assign the Medicare Advantage organization to a compliance tier described in paragraph (5).

“(3) ASSESSMENT METHOD.—

“(A) IN GENERAL.—Under the MAO Compliance Program, the Secretary shall establish through notice and comment rulemaking a method to assess, at the plan level, the extent to which each Medicare Advantage organization offering a Medicare Advantage plan is in compliance with requirements under this part applicable to each compliance category specified in subparagraph (B). Such method shall include the use of audit mechanisms, reporting requirements, performance measures established or identified by the Secretary (such as applicable measures under the MA Program Compliance and Coverage Protection Domain described in section 1853(o)(8)), and such other methods as specified by the Secretary.

“(B) COMPLIANCE CATEGORIES.—

“(i) IN GENERAL.—Subject to clause (ii), under the MAO Compliance Program, each of the following shall be a compliance category:

“(I) Compliance with timely and real-time specified authorization decision-making requirements, including compliance with section 1852(d)(7) and paragraphs (1)(C), (1)(D), and (3)(B)(iii)(II) of section 1852(g).

“(II) Compliance with coverage criteria standards, including the requirements under section 1852(g)(7) and section 1852(a)(2)(D).

“(III) Compliance with prompt payment requirements, including compliance with section 1857(f).

“(IV) Compliance with restrictions regarding improper retroactive denials and downgrades, including compliance with section 1852(g)(6) and section 1857(e)(6).

“(V) Compliance with marketing, enrollment, and beneficiary communication requirements, including subpart V of part 422 of title 42, Code of Federal Regulations, or any successor to such regulations.

“(VI) Compliance with other requirements under this part, including section 1852(g)(1)(E) and such other requirements as specified by the Secretary.

“(ii) UPDATES.—The Secretary may, through notice and comment rulemaking, revise the compliance categories described in clause (i), including by specifying additional categories, removing categories, and otherwise updating the requirements that are included in any of such compliance categories.

“(4) SCORING METHODOLOGY.—Under the MAO Compliance Program, the Secretary shall, through notice and comment rulemaking, establish a methodology to assign a total compliance score (using a scoring scale of 0 to 100) to each Medicare Advantage organization for the performance period with respect to a plan year. Such total compliance score shall be based on the assessment under paragraph (3) of plan-level compliance with respect to each compliance category described in subparagraph (B) of such paragraph, with each such category receiving equal weight (and, in the case of a Medicare Advantage organization offering more than one plan during the performance period, with each such assessment weighted by the number of individuals enrolled under such plan during such period).

“(5) COMPLIANCE TIERS.—For each plan year beginning on or after January 1, 2028, the Secretary shall, based on the total compliance score assigned pursuant to paragraph (4) to a Medicare Advantage organization for the performance period with respect to such year, assign such Medicare Advantage organization to one of the following compliance tiers, as follows:

“(A) Compliance tier one, consisting of Medicare Advantage organizations receiving a total score for the performance period of at least 90.

“(B) Compliance tier two, consisting of Medicare Advantage organizations receiving a total score for the performance period of at least 75 but not more than 89.

“(C) Compliance tier three, consisting of Medicare Advantage organizations receiving a total score for the performance period of at least 60 but not more than 74.

“(D) Compliance tier four, consisting of Medicare Advantage organizations receiving a total score for the performance period of less than 60.

“(6) REVIEW.—The Secretary shall establish a process under which a Medicare Advantage organization may seek a review of the total compliance score assigned to the organization pursuant to paragraph (4) for a performance period.

“(7) PUBLIC DISCLOSURES.—

“(A) IN GENERAL.—For each plan year beginning on or after January 1, 2028, the Secretary shall make available on a public website of the Centers for Medicare & Medicaid Services and in an easily understandable format, information regarding the assessments under the MAO Compliance Program of compliance during the performance period with respect to the plan year by Medicare Advantage organizations, on the plan level, with requirements applicable to each compliance category specified in paragraph (3)(B). Such information shall include the total compliance score received by each Medicare Advantage organization pursuant to paragraph (4) for the performance period.

“(B) OPPORTUNITY TO REVIEW AND SUBMIT CORRECTIONS.—The Secretary shall provide for an opportunity for a Medicare Advantage organization to review and submit corrections for the information to be made available under subparagraph (A) with respect to such organization prior to such information being made public.”.

(b) Expanding the MA star ratings program To include an MA program compliance and coverage protection domain.—

(1) DATA COLLECTION.—Section 1852(e)(3) of the Social Security Act (1395w–22(e)(3)) is amended—

(A) in subparagraph (A)(i), in the first sentence by inserting “, including, for plan years beginning on or after January 1, 2028, with respect to measures under the MA Program Compliance and Coverage Protection Domain described in section 1853(o)(8)” after “other indices of quality”; and

(B) in subparagraph (B)(i), by inserting “, and other than the types of data authorized under subparagraph (C) of section 1853(o)(8) for purposes of the MA Program Compliance and Coverage Protection Domain described in such section” after “as of November 1, 2003”.

(2) ADDITION OF MA PROGRAM COMPLIANCE AND COVERAGE PROTECTION DOMAIN TO MA STAR RATINGS SYSTEM.—Section 1853(o) of the Social Security Act (1395w–23(o)) is amended by adding at the end the following new paragraph:

“(8) MA PROGRAM COMPLIANCE AND COVERAGE PROTECTION DOMAIN.—

“(A) IN GENERAL.—For plan years beginning on or after January 1, 2028, in addition to any other domain under the 5-star rating system under paragraph (4)(A) used for determining star ratings of Medicare Advantage plans, the Secretary shall include under such system an MA Program Compliance and Coverage Protection Domain.

“(B) MEASURES.—Such domain shall include measures to assess compliance of each Medicare Advantage plan with each of the compliance categories specified in section 1853(p)(3)(B).

“(C) DATA.—For purposes of determining star ratings with respect to measures under the MA Program Compliance and Coverage Protection Domain, in addition to sources of data otherwise collected under section 1852(e)(3), the Secretary may use data collected pursuant to audits, complaint tracking systems, appeals data, determinations made by independent review entities, and such other sources as specified by the Secretary.

“(D) APPLICATION OF WEIGHTING.—In applying section 422.166(e) of title 42, Code of Federal Regulations, or a successor regulation, with respect to the MA Program Compliance and Coverage Protection Domain, the Secretary shall assign a weight to measures included under such domain that is greater than the weight assigned to measures included under any other domain.”.

(a) Application of prompt payment requirements to all claims for which authorization was provided.—Section 1857(f) of the Social Security Act (42 U.S.C. 1395w–27(f)) is amended—

(1) in paragraph (1)—

(A) in the header, by inserting “for items and services furnished by out-of-network providers of services and suppliers” after “requirement”; and

(B) by striking “A contract” and inserting “Subject to paragraph (2), a contract”;

(2) in paragraph (2), by striking “in compliance with paragraph (1)” and inserting “in compliance with paragraphs (1) and (2)”;

(3) by redesignating paragraphs (2) and (3) as paragraphs (3) and (4), respectively; and

(4) by inserting after paragraph (1) the following new paragraph:

“(2) REQUIREMENT FOR ITEMS AND SERVICES FOR WHICH AUTHORIZATION WAS PROVIDED.—

“(A) IN GENERAL.—For contract years beginning on or after January 1, 2028, a contract under this part shall require a Medicare Advantage organization to provide prompt payment (consistent with the provisions of sections 1816(c)(2) and 1842(c)(2)) of qualifying claims submitted for authorized items and services (as defined in subparagraph (B)) furnished to enrollees under the plan, except that in applying the provisions of such sections—

“(i) references to ‘not less than 95 percent of all claims submitted’ shall be treated as references to ‘100 percent of all claims submitted’; and

“(ii) every qualifying claim (as described in subparagraph (C)) submitted for an authorized item or service shall be deemed to be a clean claim referred to in such sections.

“(B) AUTHORIZED ITEM OR SERVICE DEFINED.—For purposes of this paragraph, the term ‘authorized item or service’ means an item or service—

“(i) that is furnished by a provider of service or supplier to an individual enrolled in a Medicare Advantage plan offered by a Medicare Advantage organization; and

“(ii) for which approval was provided by the Medicare Advantage organization through a specified authorization (as defined in section 1852(g)(1)(C)(iii)).

“(C) QUALIFYING CLAIM DESCRIBED.—For purposes of this paragraph, a claim for an authorized item or service is a qualifying claim if it includes information sufficient to establish that approval for such item or service was provided as described in subparagraph (B)(ii).”.

(b) Effect of specified authorizations.—Section 1857(e) of the Social Security Act (42 U.S.C. 1395e–27(e)) is amended by adding at the end the following new paragraph:

“(6) EFFECT OF SPECIFIED AUTHORIZATIONS.—Beginning with plan years beginning on or after January 1, 2028, a contract under this section with an MA organization shall require that, in the case that the MA organization approves the furnishing to an individual enrolled under an MA plan offered by such MA organization of an item or service through a specified authorization (as defined in section 1852(g)(1)(C)(iii)) made during the receipt by the individual of such item or service—

“(A) the MA organization may not, after such approval, deny coverage of such item or service on the basis of lack of medical necessity and may not reopen such a decision for any reason except for good cause (as described in sections 405.986 and 422.616 of title 42, Code of Federal Regulations (or any successor regulation)) or if there is reliable evidence of fraud or similar fault (as such terms are defined in section 405.902 of such title (or any successor regulation), as determined in accordance with section 422.616 of such title (or any successor regulation)); and

“(B) the MA organization may not, after such approval, change the code assigned with respect to the claim for such item or service such that the amount of payment for such claim would be reduced, except for good cause (as described in subparagraph (A)) or if there is reliable evidence of fraud or similar fault (as so described).”.

(c) Limitation on use of third-Party post-Claim review entities.—Section 1852(g) of the Social Security Act (42 U.S.C. 1395w–2(g)) is amended by adding at the end the following new paragraph:

“(6) LIMITATIONS ON USE OF THIRD-PARTY REVIEWS.—

“(A) IN GENERAL.—For contract years beginning on or after January 1, 2028, procedures established by a Medicare Advantage organization for making determinations under paragraph (1), reconsiderations under paragraph (2), or expedited determinations or reconsiderations under paragraph (3), and procedures established for providing for any post-payment review process shall—

“(i) prohibit any third-party entity from conducting a medical necessity review for coverage, payment, or post-payment review for such Medicare Advantage organization unless—

“(I) such review is not with respect to an authorized item or service (as defined in section 1857(f)(2)(B)); and

“(II) such entity is in compliance with the requirements described in subparagraph (B);

“(ii) prohibit the use of any third-party review that is conducted using a routine, automated process for denials in any such review, claim denials, or pattern-based practices of changing a code assigned with respect to a claim for an item or service furnished to individuals enrolled under an MA plan offered by the Medicare Advantage organization to a code that would result in a reduction in the amount of payment for such claim after the item or service has been furnished to the individual; and

“(iii) prohibit any compensation arrangement with any third-party entity that provides for payment or other compensation to such entity based on the number, percentage, or amount of specified authorization requests (as defined in section 1852(g)(1)(C)(iii)) that the entity approves, denies, or otherwise recommends for approval or denial.

“(B) REQUIREMENTS.—For purposes of subparagraph (A), the requirements specified in this subparagraph, with respect to a third-party entity and a review described in such subparagraph, are each of the following:

“(i) The entity conducts such review in accordance with audit protocols and appeal rights, as applicable, that are specified by the Secretary.

“(ii) The entity complies with audit and public transparency reporting requirements specified by the Secretary.”.

(a) Codification under the Medicare Advantage program of two-Midnight benchmark and presumption rules.—Section 1852(g)(1) of the Social Security Act (42 U.S.C. 1395w–22(g)(1)), as amended by section 2, is further amended by adding at the end the following new subparagraph:

“(E) APPLICATION OF TWO-MIDNIGHT RULES.—The procedures under subparagraph (A) shall provide that, for making determinations described in such subparagraph with respect to hospital and critical access hospital admissions—

“(i) in determining whether an individual is an inpatient of a hospital or critical access hospital, the Medicare Advantage organization shall continue to apply the provisions of section 412.3(d) of title 42, Code of Federal Regulations, or any successor regulation, in the same manner and to the same extent as such provisions apply with respect to payment under part A; and

“(ii) beginning on January 1, 2028, in conducting medical review activities, with respect to such admissions, the Medicare Advantage organization shall apply the 2-midnight presumption finalized in the rule published by the Secretary in the Federal Register on August 19, 2013 (78 Fed. Reg. 50952), or any successor regulation, in the same manner and to the same extent as such provisions apply with respect to payment under part A.”.

(b) Requiring consistent medical necessity criteria between Medicare Advantage and original fee-for-Service.—

(1) IN GENERAL.—Section 1852(g) of the Social Security Act (42 U.S.C. 1395w–22(g)), as amended by section 4(c), is further amended—

(A) in paragraph (2)(B), by striking “A reconsideration relating” and inserting “In accordance with paragraph (7)(C), a reconsideration relating”; and

(B) by adding at the end the following new paragraph:

“(7) MEDICAL NECESSITY DETERMINED BASED ON FFS REASONABLE AND NECESSARY CRITERIA.—

“(A) IN GENERAL.—For purposes of a determination or reconsideration under this subsection made on or after January 1, 2028, or a review made on or after such date by an independent, outside entity under paragraph (4), with respect to coverage for an item or service furnished to an individual enrolled in an MA plan offered by a Medicare Advantage organization, the Medicare Advantage organization or independent, outside entity, respectively, shall not apply criteria for determining the medical necessity of such item or service that is more restrictive than the standards and criteria applied pursuant to section 1862(a)(1) for determining under parts A and B whether the item or service is reasonable and necessary.

“(B) CERTAIN COVERAGE CRITERIA.—For purposes of a determination or reconsideration under this subsection made on or after January 1, 2028, or a review made on or after such date by an independent, outside entity under paragraph (4), with respect to coverage of inpatient hospital services furnished by a rehabilitation facility (as referred to in section 1866(j)(1)(A)) or long-term care hospital to an individual enrolled in an MA plan offered by a Medicare Advantage organization, the Medicare Advantage organization or independent, outside entity, respectively, shall not apply coverage criteria that is more restrictive than the standards and criteria applied under parts A and B, including under—

“(i) subsections (a)(3), (a)(4), and (a)(5) of section 412.622 of title 42, Code of Federal Regulations (or any successor to such regulation), with respect to such a rehabilitation facility; and

“(ii) paragraphs (1), (3), and (4) of section 1861(ccc) and clauses (iii) and (iv) of section 1886(m)(6)(A), with respect to a long-term care hospital.

“(C) PERSONNEL.—For purposes of subparagraph (A), a determination, reconsideration, or review regarding the medical necessity of an item or service shall be made only by a physician or other health care professional with appropriate expertise, including education, with respect to such item or service and the related standards and criteria applied pursuant to section 1862(a)(1). For purposes of subparagraph (B), a determination, reconsideration, or review regarding coverage of inpatient hospital services furnished by a facility or hospital described in such subparagraph shall be made only by a physician or other health care professional with appropriate expertise, including education, with respect to such services and the related standards and criteria applied pursuant to such subparagraph.”.

(2) ENFORCEMENT.—Section 1857(g)(1) of the Social Security Act (42 U.S.C. 1395w–27(g)(1)) is amended—

(A) by redesignating subparagraph (K) as subparagraph (L);

(B) by striking “or” at the end of subparagraph (J);

(C) by inserting after subparagraph (J) the following subparagraph:

“(K) fails to comply with section 1852(g)(7); or”;

(D) in subparagraph (L), as redesignated by subparagraph (A), by striking “subparagraphs (A) through (J)” and inserting “subparagraphs (A) through (K)”; and

(E) in the matter following such subparagraph (L), by striking “subparagraphs (A) through (K)” and inserting “subparagraphs (A) through (L)”.

(c) Requiring transparency in coverage criteria.—Section 1852(a)(2) of the Social Security Act (42 U.S.C. 1395w–22(a)(2)) is amended by adding at the end the following new subparagraph:

“(D) TRANSPARENCY IN COVERAGE CRITERIA.—

“(i) REQUIREMENT.—For plan years beginning on or after January 1, 2028, in order to meet the requirement under paragraph (1)(A), in the case of an item or service for which there is no national coverage determination, applicable local coverage determination, or applicable guidance for coverage provided by the Secretary, a Medicare Advantage organization offering an MA plan shall—

“(I) make a coverage determination with respect to such item or service in accordance with publicly available evidence-based coverage criteria that is published on a public website of the Medicare Advantage organization; and

“(II) submit to the Secretary information, with respect to every medical necessity determination made in the absence of such national coverage determination, applicable local coverage determination, or applicable guidance for coverage, specifying the coverage criteria applied under the MA plan.

“(ii) USE OF INFORMATION.—The Secretary shall use the information submitted under clause (i)(II) to prioritize coverage determinations.”.

(a) Applying fee-for-Service prompt payment requirements to MA in-Network services as well as out-of-Network services.—Section 1857(f)(1) of the Social Security Act (42 U.S.C. 1395w–27(f)(1)), as amended by section 4(a), is further amended—

(1) in the paragraph heading, by inserting “in-network and” before “out-of-network”; and

(2) by striking “if the services or supplies” and all that follows through the period at the end and inserting “regardless of whether the services or supplies are furnished under a contract between the organization and the provider of services or supplier. A claim that is determined to be a clean claim pursuant to the previous sentence or paragraph (2) may not subsequently be determined to not be a clean claim except under such circumstances and in accordance with such criteria as specified by the Secretary pursuant to notice and comment rulemaking.”.

(b) Automated review and payment for certain claims.—Section 1857(f) of the Social Security Act (42 U.S.C. 1395w–27(f)), as amended by section 4(a), is further amended—

(1) by redesignating paragraphs (3) and (4) as paragraphs (4) and (5), respectively; and

(2) by inserting after paragraph (2) the following new paragraph:

“(3) AUTOMATED REVIEW AND PAYMENT FOR CERTAIN CLAIMS.—

“(A) IN GENERAL.—For plan years beginning on or after January 1, 2028, a Medicare Advantage organization shall have in place automated payment processes, in accordance with standards specified by the Secretary, for claims described in subparagraph (B) with respect to which the provisions of paragraph (1) or (2) apply. Such processes shall provide that such claims shall be automatically processed and paid and shall not be subject to manual claim review, except in cases for which there is reasonable evidence of fraud.

“(B) SPECIFIED CLAIMS.—For purposes of subparagraph (A), a claim described in this subparagraph is a claim that—

“(i) is for an authorized item or service (as defined in paragraph (2)(B)); or

“(ii) is for an item or service identified on the most recent list published pursuant to section 1852(g)(1)(D)(iii).”.

Section 1852(d)(1) of the Social Security Act (42 U.S.C. 1395w–22(d)(1)) is amended—