Medicare Program; Contract Year 2027 and Certain Contract Year 2026 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, and Medicare Cost Plan Program

Another consideration related to debit cards is MA organizations' marketing tactics. CMS has become aware of certain advertisements that solely mention debit cards, or marketing terms such as “Medicare flex cards,” with an alluring value attached to them, potentially giving false impressions that the card itself is the benefit.

In the Contract Year 2026 proposed rule, CMS raised concerns with these advertisements, articulating that there could be a risk that a beneficiary might view this type of advertisement and make an enrollment decision based on the belief that, by enrolling in the plan, they will automatically receive a card with “free” money to spend wherever they choose. CMS proposed new parameters for MA organizations' marketing of supplemental benefits. Specifically, CMS proposed to add new paragraph (b)(11) to Sec. 422.2263, prohibiting MA organizations from marketing the dollar value of a supplemental benefit or the method by which a supplemental benefit is administered, such as use of a debit card by the enrollee to provide the plan's payment to the provider for the covered services. CMS solicited comment on all aspects of this proposal.

CMS thanks commenters for their input on CMS's proposed changes to requirements for the administration of supplemental benefits coverage through debit cards. CMS received the following comments and provided responses as follows.

Comment: While several commenters supported the proposed rule, a number of commenters raised concerns about potential member confusion related to various aspects of debit card use. One commenter expressed concern that the “combined benefit option” may be confusing, as beneficiaries might not understand they are using their allowance on food at the expense of other benefits like vision and dental. Some commenters also raised concerns that enrollees may unwittingly use cards for uncovered services and be found liable later. Given these concerns about confusion and potential liability, many commenters also expressed support for the proposed additional disclosure requirements around supplemental benefits and how to access them via debit cards. Several commenters also supported the requirements for customer service and support around using debit cards.

Response: CMS thanks commenters for sharing their concerns and support of this rule. CMS has heard from various stakeholders that enrollees are often confused when using plan debit cards. The clarifications being finalized at 42 CFR 422.111(b)(6) and the disclosure and customer service requirements under new subsection 422.102(g) address these concerns. As stated in the Contract Year 2026 proposed rule, plans are currently required to disclose all covered benefits. Given the rapid growth of MA plans' use of debit cards to furnish covered benefits, CMS is requiring that this disclosure must include eligible OTC items and, where supplemental benefits are administered through a debit card, specify which benefits may be accessed using the debit card. Requiring plans to provide debit card usage instructions and customer service support will significantly improve the enrollee experience. While many plans already have customer service processes in place, CMS is requiring that these processes include assistance with debit card access to benefits when necessary. These requirements are expected to enhance the enrollee experience, and CMS will continue to monitor outcomes.

CMS also thanks commenters for noting confusion around the “combined benefit option,” also referred to as a maximum plan allowance for a package of supplemental benefits under Sec. 422.102(a)(6)(ii). MA plans have long been able to structure benefits that allow enrollees to choose from a group of covered, eligible supplemental benefit options. However, CMS acknowledges that when plans use this structure in combination with debit cards, it can create confusion as enrollees may not realize that using the card for one benefit means foregoing another. To address this, CMS emphasizes throughout this rule that plans are required to disclose all benefits and accompanying limitations to their enrollees. Specifically, CMS proposed and is finalizing an amendment to Sec. 422.111(b)(6) to require disclosure of the applicable conditions and limitations associated with the receipt or use of supplemental benefits. When offering a “combined benefit option,” plans must clearly communicate any associated limitations to enrollees, including that selecting one benefit means foregoing another benefit under this benefit structure.

Comment: Multiple commenters raised concerns about the feasibility and administrative burden of the real-time verification requirement. Some commenters argued that requiring real-time verification with SKU codes for all items would limit access and use of cards, and that plans are at different operational levels regarding their ability to perform point-of-sale verification. Some commenters also asserted that various types of debit cards exist, each with distinct functionalities and operational characteristics that may have varying levels of compatibility with these requirements. Several commenters asserted that even for plans already taking verification steps through third-party fintech card administrators, operational changes could add significant burden given the variety of retailer hierarchies of product identification. A commenter expressed concern that the point-of-sale verification may have the unintended consequence of detracting from the beneficiary experience, with beneficiaries potentially facing

additional steps with added confusion at the point of sale. A commenter noted that dental benefit and eligibility verification through current HIPAA-mandated standards are insufficient to support the real-time identification mechanism of covered services as described. Another commenter stated that real-time verification technology may be incompatible with certain benefits. Some commenters requested that CMS provide examples of permissible methods of meeting the real-time identification requirements. Other stakeholders supported the real-time verification requirements, emphasizing that these processes are necessary to ensure beneficiaries receive the correct benefits and to enhance the enrollee experience. Another commenter, while supportive of real-time verification, requested that CMS permit either electronic or manual verification of plan-covered benefits at point-of-sale.

Response: CMS thanks commenters for feedback. CMS also reminds commenters that there is longstanding precedent requiring plan debit cards to be explicitly linked to covered items. CMS guidance (Medicare MCM Chapter 40.3) states that debit cards must be electronically linked to eligible, covered items. In the January 2021 Final Rule (86 FR 5913), CMS explained that MA organizations must properly restrict debit cards to appropriate providers and covered benefits to ensure compliance with Sec. Sec. 422.100(c)(2) and 422.102(a). CMS stated directly that if a plan cannot implement such restrictions--for example, through merchant codes, inventory approval system codes, or other mechanisms--then debit cards may not be an appropriate mechanism for that plan to use (86 FR 5913). It has been and continues to be CMS's expectation that if a plan cannot appropriately restrict debit cards to actual covered benefits, this mechanism should not be used. The codifications in this rule formalize and expand upon these existing expectations for greater clarity given the growth of debit card usage.

Regarding real-time verification specifically, this capability is necessary to ensure ease of access, transparency, proper payment, and fraud prevention, aligning with the Administration's commitment to combating fraud, waste, and abuse in federal programs. Real-time verification helps eliminate fraud by preventing unauthorized purchases, ensuring that benefits are used only for their intended purpose, and reduces the chances of plans inadvertently providing payment for non-covered items, thus ensuring compliance with CMS requirements. Additionally, real-time verification removes uncertainty at the point of sale for plan enrollees and provides assurance that the purchase is aligned with plan rules, which is particularly important for a population that may be dealing with reduced functionality.

CMS's primary concern is that benefits are furnished appropriately to beneficiaries. While debit cards offer one method to administer benefits, they are not the only option available to plans, nor mandatory. Plans may administer supplemental benefits through other methods, including but not limited to, manual claims processing and online claims submission forms. In fact, plans may find these processes more operationally appropriate for certain benefits. CMS originally allowed debit cards as a flexibility to give plans additional options for benefit administration. However, if it is impractical, unfeasible, or difficult to effectuate a particular supplemental benefit through a debit card, CMS does not expect a debit card to be used. Plans should choose the method--whether debit cards, receipt-based reimbursement, electronic catalogs, home delivery, or other approaches--that best enable them to furnish benefits in compliance with program requirements.

In response to the request for examples of permissible methods of meeting the real-time identification requirements, CMS refers commenters to the January 2021 Final Rule, which noted that plans could use merchant codes, inventory approval system codes, or other similar mechanisms (86 FR 5914). CMS recognizes that health plans have successfully utilized debit cards to deliver healthcare benefits for many years and that the industry has developed substantial expertise in this area. CMS anticipates continued technological advancement and therefore refrains from prescribing specific technological solutions or providing exhaustive examples. It is not CMS's intent to dictate the technology employed, but rather to establish clear expectations for outcomes: enrollees should experience seamless front-end user experiences that preserve both ease of access and transparency. Finally, regarding the request to permit either electronic or manual verification of plan-covered benefits at point-of-sale: CMS does not consider manual verification to be real-time verification. Electronic verification requires automated, system-to-system data exchange and validation processes that occur without manual intervention. However, plans may certainly use manual verification as a troubleshooting alternative when experiencing technological issues with their electronic verification systems. This approach can serve as a temporary workaround to ensure continuity of operations while technical problems are being resolved.

Comment: Similarly, some commenters stated that difficulties could arise at small or independently-owned retail stores that do not have the same technological infrastructure or capacity as larger national chain stores. Another commenter explained that in many cases, plans do not have a contractual relationship with retail stores where debit cards are commonly used, as there is often a financial technology company in the middle. They explained that these plans select products that should be covered, then the third-party administrator and the retail store match products to SKUs.

Response: CMS thanks commenters for sharing their concerns and providing additional insight into how plans operationalize the furnishing of covered supplemental benefits through debit cards. It is important to reiterate that MA operates under a particular structure governed by statutory and regulatory rules. MA plans that offer coordinated care plans may specify the networks of providers from whom enrollees may obtain services, including supplemental benefits. Furthermore, MA organizations have the discretion to choose with whom they contract to furnish services. Section 1854(a)(6)(B)(iii) of the Act, commonly known as the “non-interference clause,” prohibits CMS from requiring an MA plan to contract with a particular health care provider, including vendors, to furnish a benefit. This applies to supplemental benefits as well. CMS recognizes that the technological landscape has evolved and many plans no longer contract directly with retailers. Instead, they partner with financial technology companies to oversee card usage, which impacts which vendors can participate. These arrangements are acceptable, provided that plans comply with CMS requirements, especially disclosure requirements which describe the applicable conditions and limitations associated with the use of supplemental benefits. Finally, CMS reiterates that debit cards are not unrestricted cash cards. Section 1851(h)(4)(A) of the Act prohibits plans from providing cash to enrollees. Instead, debit cards serve as one mechanism that plans may use to furnish covered benefits. Consistent with the MA program structure--in which plans furnish services through a

network of providers or vendors--debit cards are not intended to be usable everywhere.

Comment: Several commenters expressed support for having alternative reimbursement processes available to protect enrollee access to benefits. Some plans acknowledged that they already have processes in place for alternative reimbursement and one plan requested that CMS recognize these existing practices while clearly stating any intended changes to standard industry practices. Another commenter supported the proposal but recommended that for geographic areas where vendor capacity for alternative processes does not currently exist, CMS should allow adequate timeframe for vendors to build out this function.

However, other commenters raised concerns about the administrative burden that may be associated with manual receipt reimbursement processes as an alternative to debit cards. Some plans stated that supplemental benefits like OTC and food allowances rely on CMS-approved product listings comprising thousands of items, and that the automated nature of debit cards ensures real-time validation at the point of sale. Several commenters indicated that mandating a manual reimbursement process would require extensive administrative effort, including additional full-time staff to individually review each item. Some plans stated that current card vendors lack infrastructure to manage receipt reimbursements, meaning the burden would fall entirely on plans. Another commenter expressed concern that requiring an alternative reimbursement process could lead to member confusion, as the debit card enables members to know at the point of service whether a product is eligible, whereas after-the-fact filing could result in situations where purchases made in good faith are not actually reimbursable. Some commenters requested examples from CMS of permissible alternate payment methods that would comply with requirements, as well as examples of issues that would warrant using an alternate process. Several commenters expressed concern that allowing alternative processes would set a precedent with members that they could obtain other plan services through non-contracted locations or providers.

Response: CMS thanks commenters for their feedback. As described in the Contract Year 2026 proposed rule, longstanding guidance at Section 40.3.1 of Chapter 4 of the Medicare MCM requires plans to allow manual reimbursement for OTC purchases via submitted receipts in certain situations. To maintain enrollee access for all benefits administered through a debit card, CMS proposed to codify at Sec. 422.102(g)(2)(iii) that plans must have an alternative reimbursement process for eligible expenses. This would include technical issues such as difficulty using the debit card, provider system failures, erroneous transaction declines, or other situations where debit card use is unfeasible. However, based on feedback from commenters, CMS agrees that the requirement as proposed could inadvertently cause confusion among enrollees regarding how to access in-network benefits. Therefore, CMS will amend Sec. 422.102(g)(2)(iii) to more specifically state that plans must have an alternative process that allows for reimbursement of eligible expenses for plan covered benefits in circumstances where the debit card is unusable at the point of sale, including but not limited to debit card malfunction.

As noted throughout this rule, plans must ensure that beneficiaries maintain access to covered supplemental benefits regardless of the payment mechanism used to administer those benefits. Whether a plan provides access through a debit card or another payment method, the underlying benefit must remain available to eligible enrollees. The manual reimbursement requirement serves as a safeguard to ensure access to eligible services in situations where the debit card becomes unusable due to malfunction, damage, or other technical failures. This requirement protects beneficiaries from losing access to their covered benefits simply because the payment mechanism is temporarily unavailable.

Comment: One commenter requested that CMS reconsider its proposal to allow PPO supplemental benefits to be used at any retailer, noting that expanding benefits to any retailer would require plans to manage approvals and validations manually, significantly increasing administrative complexity. Another commenter asked CMS not to finalize the out-of-network reimbursement requirement. Some commenters expressed concern that CMS's requirement for plans to provide all benefits at in- network cost-sharing rates when no in-network provider is available could expose the program and plans to potential bad actors, as many supplemental benefit providers are not Medicare-enrolled medical providers and are vetted through contractual agreements.

Response: Regarding PPO out-of-network reimbursement, CMS notes that current regulations at Sec. 422.4(a)(1)(v) require MA plans that are PPOs to provide reimbursement for all covered services, regardless of whether the services are furnished within the plan's contracted network. As CMS stated in the 2005 final rule (70 FR 4598) establishing this requirement, CMS intended that local and regional PPOs reimburse enrollees for all covered benefits, regardless of whether those benefits are provided within the network of providers. This longstanding requirement applies regardless of the mechanism through which a benefit is furnished.

Additionally, while plans may maintain established systems for administering supplemental benefits--such as limiting debit card functionality to contracted vendors--supplemental benefits remain covered benefits, and PPOs must still provide reimbursement for covered services obtained out-of-network. CMS has long articulated a similar expectation in sub-regulatory guidance. For example, section 40.3.1 of Chapter 4 of the Medicare MCM states that MA plans, regardless of the payment method used to furnish OTC benefits, must provide a mechanism for manual reimbursement under described circumstances (such as when a debit card network is not functioning). This guidance reflects CMS's longstanding expectation that the method used to administer a benefit does not alter a plan's obligation to ensure access to and reimbursement for covered supplemental benefits in certain situations.

To provide additional clarity, CMS will further amend Sec. 422.102(g)(2)(iii) to specify that plans must establish an alternative process that permits reimbursement of eligible expenses in circumstances where the debit card is unusable at the point of sale, as described earlier in this section, as well as when a beneficiary is entitled to obtain covered benefits out-of-network. As a best practice, plans retain the discretion to implement appropriate verification procedures and safeguards to ensure reimbursement is provided only for actual covered items. CMS recommends that plans consider these requirements when deciding whether a debit card is the most appropriate mechanism for furnishing certain covered benefits.

For Health Maintenance Organization (HMO) plans specifically, it is important to note that “eligible expenses” under the manual reimbursement requirement refer exclusively to covered services obtained in accordance with the plan's network requirements. In an HMO, manual reimbursement does not extend to purchases made from out-of- network providers or vendors or suppliers, as

such services would not constitute eligible covered benefits under an HMO plan structure. The intent of this provision is to protect beneficiary access to covered benefits when the debit card payment mechanism fails, not to expand coverage to out-of-network services that fall outside the plan's benefit design. CMS reminds readers, however, that even if an MA plan chooses to administer supplemental benefits through a debit card, the plan must still arrange for and cover any medically necessary covered benefit outside of the plan provider network, at in-network cost sharing, when an in-network provider or benefit is unavailable or inadequate to meet an enrollee's medical needs under 42 CFR 422.112(a)(1)(iii).

Finally, in response to the request that CMS not finalize the requirement that MA plans provide all benefits at in-network cost- sharing rates when no in-network provider is available, CMS again notes that this is an existing requirement at 42 CFR 422.112(a)(1)(iii) and is applicable to all covered benefits, including supplemental benefits, regardless of delivery method. This requirement applies only when a plan lacks an adequate contracted provider or vendor to furnish a covered benefit--a situation expected to be rare. It does not require plans to always cover benefits outside the provider network at in- network cost sharing.

Comment: A commenter requested that CMS not finalize the removal of the proposed language “or other means” at proposed Sec. 422.102(a)(6)(i), stating that it would unnecessarily restrict plans from using alternatives such as stored value cards or future technological developments like mobile applications.

Response: CMS thanks the commenter for this feedback. The Contract Year 2026 proposed rule proposed to remove “or other means” from the regulation and solicited comments on which alternative delivery methods beyond manual reimbursement or debit cards might be unintentionally eliminated, and whether stored value cards can meet the requirements at Sec. 422.102(g), specifically regarding real-time point-of-sale verification and plan-year-only restrictions.

CMS clarifies that, as explained in the January 2021 rule, the cost-sharing reduction flexibilities authorized at Sec. 422.102(a)(6)(i) and (ii) do not exclude stored value cards, provided they can be programmed to permit their use only for the purchase of specific, covered items and services. The changes proposed at Sec. 422.102(a)(6) were not intended to prohibit stored value cards, provided they comply with the requirements at Sec. 422.102(g). CMS solicited comment on whether to remove the phrase “or other means” from Sec. 422.102(a)(6)(i) and instead specify the types of cards or mechanisms that would satisfy the proposed requirements under Sec. 422.102(g).

CMS received no direct comments on these questions but appreciates the commenter noting the possible unintended consequences of removing “or other means.” Therefore, CMS will not finalize the removal of “or other means” in Sec. 422.102(a)(6)(i). Stored value cards will continue to be permitted as a mechanism to administer reduced cost sharing and covered benefits, provided such cards comply with the requirements under Sec. 422.102(g). CMS anticipates continued innovation in this technological space and welcomes opportunities to engage with stakeholders on emerging advancements.

Comment: Multiple commenters requested clarification on various technical aspects of the proposal, including: examples of how plans can meet disclosure requirements and model documents; whether plans may use the same physical card year to year with only the amount expiring; whether a plan can disclose categories of OTC items as opposed to each individual OTC item; and more detailed specifications for customer service requirements. Several commenters stated that MA organizations already have processes in place for delivering plan-covered supplemental benefits and providing education to enrollees, and that the objective of the new proposed requirements is unclear.

Response: CMS appreciates the comments received and acknowledges that many plans are likely to have processes in place to meet several of the proposed requirements in this rule. As stated throughout this rule, many of these requirements primarily codify and further clarify existing expectations. In response to requests for clarification on whether plans may use the same physical card year to year with only the benefit amount expiring, CMS proposed and is finalizing at Sec. 422.102(g)(2)(iv) that supplemental benefits administered through debit cards must be limited to the plan year. Plans may allow enrollees to use the same physical debit card in subsequent plan years; however, the dollar amounts or benefit allocations associated with the card cannot carry over from one plan year to the next. This ensures that each plan year's benefits are utilized within the designated plan year period.

Regarding whether a plan can disclose categories of OTC benefits as opposed to listing each individual benefit, the listing of categories of covered OTC benefits is permissible provided the plan discloses any limitations and is able to provide more specific details to the enrollee if necessary. CMS declines to provide more prescriptive guidance, as the purpose of these requirements (e.g., adequate transparency and enrollee support) is clear, and CMS does not wish to be overly restrictive to plans that may already have adequate processes in place. CMS will continue to engage in dialogue with plans and may provide additional guidance at a later date as necessary.

Comment: A commenter expressed concern that cards function as inducements and that beneficiaries may make enrollment decisions based on having a “card” rather than the overall benefit package.

Response: As noted in the Contract Year 2026 proposed rule, CMS shares concerns that beneficiaries may base enrollment decisions on perceived debit card access rather than the comprehensive benefits package. CMS encourages all enrollees and potential enrollees to consider the full benefits package when selecting a plan. The increased disclosure requirements in this rule are designed to improve transparency and support informed enrollment decisions, and CMS will continue to monitor developments in this area and welcomes ongoing stakeholder feedback.

Comment: Some commenters expressed concern about lack of transparency surrounding delivery and use of benefits. While supporting the proposal, another commenter noted concerns that it would not allow other agencies or entities to monitor whether plan-provided debit cards are being used only for items that meet criteria. Another commenter suggested that CMS should work to ensure MA plans share information with providers on supplemental benefits available to patients in real time, at the point of care, and in a standardized manner. A commenter, while supporting the proposal, expressed concern that the proposed guardrails do not prevent someone other than the beneficiary from using the card.

Response: CMS thanks commenters for sharing their concerns. It is noted that existing requirements mandate MA plans to disclose all supplemental benefits. The new requirements clarify that such disclosures must include all applicable conditions and limitations associated with the receipt or use of supplemental benefits, and that this disclosure applies to all benefits, including those administered through a

debit card. The existing requirements, along with the proposed disclosure clarifications regarding applicable conditions and limitations and benefits furnished through debit cards, are sufficient to ensure transparency. Additionally, per Sec. 422.2267(e)(34), plans offering CMS-approved SSBCI are required to include the SSBCI disclaimer in all marketing and communications materials that mention SSBCI. In the SSBCI disclaimer, plans must list the chronic condition(s) the enrollee must have in order to be eligible for the SSBCI (in accordance with CMS requirements). Plans must also convey in the SSBCI disclaimer that even if the enrollee has a listed chronic condition, the enrollee will not necessarily receive the benefit because other eligibility and coverage criteria also apply. Additionally, in section IV.L. of this rule, CMS is finalizing a requirement that MA organizations post their SSBCI eligibility criteria on their plan websites. CMS believes this requirement, together with existing transparency requirements, will enhance overall transparency regarding SSBCI benefits.

Regarding comments about provider transparency, CMS expects MA plans to ensure that contracted providers are informed about covered benefits and plan policies relevant to the furnishing and coordination of care. Such information-sharing supports appropriate benefit administration and care coordination between the plan and its network providers. Lastly, CMS thanks the commenter for raising concerns that the proposed guardrails do not prevent non-enrollees from using the debit card. CMS shares these concerns about potential abuse and will further evaluate this issue for possible additional guardrails in future rulemaking.

Comment: A commenter opposed CMS requiring debit card transactions to be included in the Explanation of Benefits (EOB).

Response: Thank you for the comment. As explained in the Contract Year 2026 proposed rule, MA organizations must send enrollees an Explanation of Benefits (EOB) monthly or quarterly that includes all Part C claims activity--covering basic benefits, mandatory and optional supplemental benefits, and SSBCI. Each claim must show a descriptor, billing code, amount billed, approved reimbursement, plan payment, and enrollee liability. EOBs must also include year-to-date information such as amounts toward the Maximum Out-of-Pocket (MOOP) limit. These existing requirements apply to all benefits, including those accessed via a plan debit card, regardless of delivery method. Plans experiencing operational challenges in meeting these requirements when using debit cards may wish to evaluate whether an alternative mechanism would be more suitable for furnishing covered benefits.

Comment: Some commenters requested additional items be added to the allowable OTC list and expressed concerns that non-allowable examples-- such as grooming supplies, shampoo, lotion, and hygiene-related items-- are overly restrictive. These commenters argued that requiring these items to be available only to members with certain chronic conditions would limit access to many members and increase benefit complexity, making it more difficult to use. They asserted that requiring some OTC items to be offered to all enrollees as primarily health-related supplemental benefits, while allowing others to be limited to chronically ill enrollees as SSBCI, could lead plans to reduce the overall scope of their OTC offerings. Another commenter requested that if CMS proceeds with codifying these changes, the Agency should provide an exhaustive list of allowed and prohibited OTC products to ensure all plans operate under consistent expectations. Additionally, a commenter suggested that only oral health products bearing the ADA Seal of Acceptance should be included as eligible OTC items for purchase with debit cards.

Response: CMS thanks commenters for their suggestions. As explained in the Contract Year 2026 proposed rule, plans have indicated that a non-exhaustive list would provide further clarity for MA organizations and would assist in their bid preparations. Such lists were common in previous sub-regulatory guidance, making this an appropriate opportunity to provide an updated list of items CMS has previously approved. CMS declines to add more items to this list because an item's absence does not prohibit a plan from proposing to offer it. CMS also declines to provide an exhaustive list, as this would inhibit plans' ability to further innovate in this area. Regarding the comment that plans only provide oral health products bearing the ADA Seal of Acceptance, plans may propose to offer any OTC provided they meet CMS requirements, particularly those at Sec. 422.100(c)(2) and under Sec. 422.102. Further delineations, such as products endorsed by specific independent advisory groups, are at the discretion of the plan. With respect to grooming supplies, shampoo, lotion, and similar hygiene- related items, a supplemental benefit is not primarily health-related if the item or service is used solely or primarily for cosmetic, comfort, general use, or social determinant purposes (86 FR 5971). CMS considers such items to be general use items that do not qualify as primarily health-related benefits. Alternatively, plans may propose to offer these items as SSBCI benefits, provided all requirements under Sec. 422.102(f) are met.

Comment: Some commenters requested that CMS allow food, housing, and transport as primarily health-related, and another commenter requested a non-exhaustive list of allowable special supplemental benefits for the chronically ill. Some commenters raised concerns about cards counting towards resources in federal programs and suggested CMS should issue a rule clarifying that these benefits are not income for purposes of Medicaid and other federally funded programs. A commenter recommended CMS regularly analyze and report plan-level data on supplemental benefits to assess their impact on health expenditures and outcomes. Another commenter suggested that CMS expand supplemental benefit data reporting. Others expressed concerns regarding the potential consequences of VBID sunsetting, particularly the inability of plans to transition certain VBID benefits in MA. Some FQHCs requested CMS update Medicare Claims Processing Manual guidance concerning supplemental payments.

Response: CMS appreciates these comments. However, they are out of scope of this regulation.

Comment: Regarding comments on CMS's proposal to prohibit MA organizations from marketing the dollar value of a supplemental benefit or the method by which a supplemental benefit is administered, most comments were not supportive. The majority of commenters argued that prohibiting marketing of supplemental benefit dollar values would reduce transparency and harm informed decision-making. They stated beneficiaries have a right to know benefit values before enrolling, that supplemental benefits were often the most important reference point, and that the restrictions would create “secret benefits.”

Response: CMS thanks commenters for their feedback. In consideration of the comments received, at this time, CMS has decided not to finalize the proposed amendment to Sec. 422.2263, regarding MA organizations' marketing of supplemental benefits.

Comment: Commenters also questioned how beneficiaries would obtain this information beyond dense

Evidence of Coverage documents and noted that failing to disclose benefit values was itself potentially misleading. Commenters noted that without benefit value information, beneficiaries could not differentiate between similar plans or compare value across MA organizations. which could create distrust and cause beneficiaries to decline plans they might otherwise prefer. In addition, some commenters were concerned that the proposal would burden seniors by requiring them to call multiple plans for critical information, potentially leading to more complaints, unwitting enrollment, and benefit misuse.

Response: CMS appreciates these additional concerns raised by commenters. As noted previously, CMS is not finalizing the proposed supplemental benefits marketing provision.

Comment: Some commenters suggested that low-income seniors and dual-eligible beneficiaries would be particularly affected if the proposal to restrict debit card marketing were finalized. For example, commenters noted that in Puerto Rico, where over 45 percent of MA enrollees were dual eligible, debit card availability and benefit dollar values were most relevant to low-income seniors. Commenters stated that supplemental benefits filled gaps in federal benefits, helped cover Part B premiums, reduced pharmacy costs, and provided food and nutrition services, and furthermore, beneficiaries with specific health needs relied on supplemental benefits existing only in MA plans. In addition, a few commenters believed CMS's proposed debit card marketing restrictions would disincentivize plan innovation and stated it was not within CMS legal authority to impose judgment on which benefits were most significant to beneficiaries.

Response: CMS again thanks commenters for this valuable input. In light of concerns raised by the commenters and as previously discussed, CMS is not finalizing the marketing proposal at this time.

Comment: Other commenters urged CMS to focus on bad actors rather than broadly restricting all plans. They recommended revising guidance to provide clear examples of prohibited misleading marketing, working with plans to develop clearer communication standards, requiring disclaimers when marketing benefit values, and establishing limits on card amounts and approved services.

Response: CMS thanks commenters for these ideas and may take them under consideration for future policymaking regarding supplemental benefit marketing issues.

Comment: Several commenters supported prohibiting marketing of administration methods but opposed prohibiting marketing of dollar values, arguing this deprived beneficiaries of critical decision-making information. They understood CMS concerns about consumer confusion but believed these should be addressed with more information and transparency, not less. They also noted that not providing information on benefit access could result in beneficiary confusion contrary to CMS transparency efforts and could negatively impact Star Ratings measures based on the Complaints Tracking Module.

Response: CMS appreciates this feedback. While CMS is opting not to finalize this aspect of the proposal at this time, the Agency may take this feedback into consideration for future rulemaking.

Comment: Some commenters supported CMS efforts to prevent misleading advertising that interfered with beneficiaries' plan selection, particularly ads suggesting “free money” without restrictions. They endorsed prohibiting marketing of benefit administration methods. Commenters reported instances where flex card advertising induced individuals to disenroll from PACE or switch plans, resulting in loss of care. A few commenters recommended additional safeguards requiring ads to identify coverage limits, covered items, and eligibility restrictions in the same font or volume as the main content. Other commenters recommended limiting television, billboard, and radio marketing mentioning debit card amounts while allowing such information in plan materials with appropriate disclaimers.

Response: CMS again thanks commenters for their comments and recommendations on these various issues. CMS is not finalizing the marketing proposal at this time but will consider the comments received for future policymaking. Summary of Regulatory Changes

After considering the comments received and for the reasons outlined in the Contract Year 2026 proposed rule and in responses to comments, CMS is taking the following actions in this final rule:

1. Finalizing Sec. 422.111(b)(6) as proposed, which requires MA plans to disclose all supplemental benefits, including applicable conditions and limitations, eligible over-the-counter items, and benefits accessible through debit cards.

2. Finalizing the new subparagraph Sec. 422.102(g) with modifications, specifically amending Sec. 422.102(g)(2)(iii) to state that plans must have an alternative process that allows for reimbursement of eligible expenses for plan covered benefits in circumstances where the debit card is unusable at the point of sale, including but not limited to debit card malfunction or when a beneficiary is entitled to obtain covered benefits out-of-network.

3. Not finalizing the proposed amendment to Sec. 422.102(a)(6)(i), which would have eliminated “or other means” as an acceptable way to administer cost-sharing reductions.

4. Not finalizing the proposed amendment to Sec. 422.2263, which would have prohibited MA organizations from marketing the dollar value of a supplemental benefit or the method by which a supplemental benefit is administered, such as use of a debit card by the enrollee to provide the plan's payment to the provider for the covered services.

V. Medicare Advantage/Part C and Part D Prescription Drug Plan Quality Rating System (Star Ratings) (Sec. Sec. 422.162, 422.164, 422.166, 423.182, 423.184, and 423.186)