Medicare Advantage 2026 Payment Policy Updates: What Ophthalmologists Need to Know

CMS 2026 Updates

On April 7, 2025, the Centers for Medicare & Medicaid Services (CMS) released the Calendar Year 2026 Rate Announcement for Medicare Advantage (MA) and Medicare Part D Prescription Drug Programs, finalizing payment policies that directly impact ophthalmology practices. With payments to MA plans increasing by an average of 5.06%—amounting to over $25 billion—ophthalmologists, practice managers, and eye care practice owners must understand how these changes affect their operations, patient care, and revenue cycle management.

This article explores the key updates, their implications for eye care, and strategies to adapt effectively in 2025 and beyond.

Key CMS Updates for 2026: A Snapshot for Ophthalmology

The CMS 2026 Rate Announcement introduces several updates that influence how ophthalmology practices interact with MA plans and Part D programs:

Payment Increase for MA Plans: CMS has finalized a 5.06% average increase in payments to MA plans, up from the proposed 4.33% in the January 2025 Advance Notice. This increase, driven by a higher effective growth rate of 9.04% (due to updated fee-for-service expenditure data through Q4 2024), translates to more funding for MA plans, potentially improving coverage for eye care services.
Part D Redesign Enhancements: The Final CY 2026 Part D Redesign Program Instructions continue to implement the Inflation Reduction Act (IRA) of 2022, capping out-of-pocket (OOP) prescription drug costs at $2,100 and limiting insulin cost-sharing to the lesser of $35, 25% of the maximum fair price under the Medicare Drug Price Negotiation Program, or 25% of the negotiated price. These changes benefit patients requiring medications for conditions like diabetic retinopathy.
Risk Adjustment Model Updates: CMS finalized the transition to the 2024 CMS-HCC risk adjustment model for MA plans, with a blended risk score approach for Programs of All-Inclusive Care for the Elderly (PACE) organizations (90% based on the 2017 model, 10% on the 2024 model). This ensures more accurate payments for complex patients, such as those with advanced glaucoma or macular degeneration.
Star Ratings and Quality Measures: Updates to MA and Part D Star Ratings include adjustments for eligible disasters, non-substantive measure specification updates, and a focus on clinical care and patient outcomes, which can impact MA plan contracts and reimbursements for eye care services.

These updates aim to enhance access to affordable, high-quality care while protecting beneficiaries and taxpayers from waste, fraud, and abuse—a priority for CMS in 2026.

Implications for Ophthalmology Practices

1.Increased MA Funding: Opportunities for Expanded Services

The 5.06% payment increase to MA plans offers a financial boost that could translate into better coverage for ophthalmology services. Procedures like cataract surgery, intravitreal injections for macular degeneration, or glaucoma screenings—often covered under MA plans—may see improved reimbursement rates. However, this also means MA plans may tighten utilization management practices, such as prior authorizations, to control costs. Ophthalmologists should prepare for potential increases in administrative workload to justify medical necessity for complex procedures.

2.Part D Changes: Better Access to Medications for Eye Conditions

The Part D redesign, particularly the $2,100 OOP cap and insulin cost-sharing limits, directly benefits patients with eye conditions linked to systemic diseases like diabetes. For example, diabetic retinopathy patients often require medications to manage underlying conditions alongside eye treatments. Lower OOP costs can improve medication adherence, reducing the progression of vision-threatening complications. Ophthalmologists can leverage this to encourage patients to stay compliant with their treatment plans, potentially reducing the need for more invasive interventions.

3.Risk Adjustment Model Transition: Fairer Payments for Complex Cases

The transition to the 2024 CMS-HCC risk adjustment model ensures that MA plans are better compensated for treating patients with higher acuity, such as those with end-stage glaucoma or severe diabetic eye disease. This can lead to more equitable reimbursements for ophthalmology practices managing complex cases. However, practices must ensure accurate documentation and coding to reflect the severity of patient conditions, as MA plans will scrutinize claims to align with the updated model.

4.Star Ratings Impact: Quality Over Quantity

The updates to Star Ratings emphasize clinical outcomes and patient experience, which can influence MA plan contracts and, indirectly, ophthalmology reimbursements. Practices that excel in patient satisfaction—through streamlined scheduling, clear communication, and high-quality care—may benefit from stronger relationships with high-rated MA plans. Conversely, practices struggling with patient complaints or poor outcomes may face challenges in securing favorable contracts.

Challenges for Eye Care Practices

Despite the opportunities, the CMS updates present challenges for ophthalmology practices:

Increased Prior Authorization Scrutiny: With more funding, MA plans may impose stricter prior authorization requirements to manage costs, especially for high-cost procedures like retinal surgery. This can delay care and increase the administrative burden.
Coding and Documentation Pressure: The risk adjustment model transition requires precise coding to capture patient complexity. Practices using outdated EHR systems may struggle to meet these demands, risking underpayment.
Patient Cost Transparency: While Part D changes reduce OOP costs, patients may still face confusion over coverage for eye-specific medications or procedures, leading to dissatisfaction if not addressed proactively.

Strategies to Adapt in 2026

To navigate these updates effectively, ophthalmology practices can adopt the following strategies:

1.Optimize Prior Authorization Workflows

Invest in staff training or software solutions to streamline prior authorization processes. For example, EHNOTE’s ophthalmology-specific EHR platform automates prior authorization workflows, ensuring timely approvals for procedures like LASIK or corneal transplants, minimizing delays in patient care.

2.Upgrade to an Ophthalmology-Specific EHR

Using a modern EHR like EHNOTE, designed for eye care, ensures accurate coding and documentation aligned with the 2024 CMS-HCC model. EHNOTE integrates diagnostic imaging, clinical documentation, and billing, helping practices capture patient complexity and secure fair reimbursements.

3.Enhance Patient Education on Coverage

Prioritize patient experience by reducing wait times, improving follow-up care, and addressing patient concerns promptly. High-quality care can strengthen your practice’s standing with MA plans, ensuring favorable contract terms.

4.Preparing for a Changing Landscape

And EHNOTE, with its wide range of, modern patient experience solutions can help you deliver better experiences, improve quality of care, and build personalized communication approach to boost quality metrics and build lasting relations.

Preparing for a Changing Landscape

The CMS 2026 Medicare Advantage and Part D updates offer both opportunities and challenges for ophthalmology practices. The 5.06% payment increase and Part D redesign can enhance access to care and medications, but increased scrutiny on prior authorizations and coding demands careful preparation. By adopting tools like EHNOTE, optimizing workflows, and focusing on quality, ophthalmologists can navigate these changes successfully, ensuring financial stability and exceptional patient care in 2025 and beyond. Stay proactive—your practice’s future depends on it.