Medicare-Medicaid Plan Close-Out Letter for Non-Renewing Contracts 2026
Relevant to: PDF, TrOOP, COB, State Medicare-Medicaid Plan Handbooks, Part D
Each week, we scan the latest CMS memos to find the most important ones that apply for PACE programs. Below is a summary of what you need to know.
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Introduction
As Medicare-Medicaid Plans approach their January 1, 2026 non-renewal deadline, CMS has outlined crucial close-out requirements. These instructions detail essential steps and responsibilities for plan sponsors, including payment obligations and compliance with Part D reporting. Adhering to these guidelines will ensure a smooth transition and fulfillment of contracts with the necessary regulatory bodies before the cessation of their agreements.
Key Dates and Deadlines
- Closing Date for Non-Renewal: January 1, 2026
- Submission Deadline for 2025 Risk Adjustment Data: PY 2025 or before losing CMS access
- Final Submission Deadline for 2025 PDE Data: June 29, 2026, 11:59 PM ET
- Deadline for 2025 DIR Report: June 30, 2026
- Expected Final Settlement Package from CMS for 2025 Contracts: After July 2027
PACE Compliance
This memo is relevant to PACE programs because it sets forth the compliance obligations and close-out requirements for Medicare-Medicaid Plan (MMP) contracts that are non-renewing as of January 1, 2026. Here is an outline of the necessary actions related to compliance:
For Payment:
- MMPs must submit risk adjustment data and attestations to CMS and relevant state Medicaid agencies for non-renewing contracts, ensuring all data are submitted before losing access to CMS systems.
- Prescription drug event (PDE) data and direct and indirect remuneration (DIR) data must be submitted according to set deadlines to avoid being excluded from Part D payment reconciliation.
- Annual Medical Loss Ratio (MLR) Reports and Attestations need submission in line with the three-way contract.
- Overpayments must be reported and returned to CMS and respective state agencies, adhering to section 1128J(d) of the Social Security Act, even after the contract ends.
- Retroactive payment adjustments should be corrected within 90 days of the final MARx payment reports.
For Part D Requirements:
- MMPs are required to coordinate and facilitate True Out-of-Pocket (TrOOP) Balance Transfers effectively, ensuring proper exchange of information and benefit accumulation.
- Even if non-renewing, MMPs must comply with all documentation and reporting requirements until the end of the contract termination process.
Additional MMP and Part D Requirements:
- Submission of required Healthcare Effectiveness Data and Information Set (HEDIS) data for 2026 is necessary, even for non-renewing contracts.
- Documentation, resolution, and closure of complaints via the Complaint Tracking Module is required until the end of the contract term.
- Maintenance of records must be ensured for ten years for audit purposes, as specified by 42 CFR §§ 422.504(d) and (e) and 423.505(d) and (e), along with the three-way contract.
Overall, the compliance requirements emphasize the need for timely data submission, continuity of care, and adherence to administrative processes related to contract termination and payment reconciliation. Failure to comply with these requirements may affect the final settlement process.
Required Actions
1. Submit risk adjustment data: Ensure all Risk Adjustment Data, including RAPS and EDS data, from January 2024 through December 2025 are submitted by the specified deadlines. This includes submitting risk adjustment data by the PY 2025 deadline or before the contract loses access to CMS systems.
2. Submit PDE and DIR data: MMPs must electronically submit PDE data every month, address rejected records within 90 days, and ensure all 2025 PDE data is submitted by June 29, 2026. Additionally, complete the 2025 DIR Report for Payment reconciliation by June 30, 2026.
3. Handle MLR Reports and Attestations: Submit the annual Medical Loss Ratio (MLR) Reports and Attestations to CMS, along with compliance with the requirements set by your state Medicaid agency. Be aware of the communicated deadlines regarding MLR submissions.
FAQs
- What are the close-out requirements for non-renewing Medicare-Medicaid Plan sponsors effective January 1, 2026?
- How should Medicare-Medicaid Plans (MMPs) submit risk adjustment data and attestations?
- What are the submission deadlines for Prescription Drug Event (PDE) data for non-renewing contracts?
- What is the process for reporting overpayments in risk adjustment data for MMPs?
- What are Medicare-Medicaid Plans’ obligations for continuation of care after contract non-renewal?
