Slaying ‘Ghost Networks’: How CMS’s Proposed Rule on MA Directories and PBM Transparency Impacts Medical Billing

If there is one phrase that universally frustrates patients, providers, and medical billers alike, it is the dreaded "ghost network." For years, Medicare Advantage (MA) enrollees have navigated directories filled with disconnected phone numbers, retired physicians, and clinics that no longer accept their insurance.

However, a major regulatory shift is on the horizon. On October 16, 2026, the Centers for Medicare & Medicaid Services (CMS) issued a sweeping proposed rule (CMS-4214-P) designed to clean up MA provider directories, establish strict transparency requirements for Pharmacy Benefit Managers (PBMs), and deliver cost-saving protections for low-income beneficiaries.

Implementing key healthcare provisions from the Consolidated Appropriations Act of 2026, this proposed rule will fundamentally alter how health plans manage their data. For medical coders, billers, and revenue cycle managers, understanding these changes is critical to preparing for the 2028 and 2029 contract years.

Exorcising MA Ghost Networks

Section 6220 of the 2026 law, known as the Requiring Enhanced and Accurate Lists of (REAL) Health Providers Act, targets the systemic inaccuracies in MA directories.

When patients attempt to schedule routine preventive care—such as an initial Annual Wellness Visit (often billed with HCPCS code G0438)—only to find that the listed physician left the network months ago, they experience a systemic barrier perfectly captured by ICD-10-CM code Z75.3 (Unavailability and inaccessibility of health-care facilities). To combat this, CMS is proposing strict new verification standards starting in contract year 2028:

90-Day Verifications: MA plans will be required to verify and update their provider directory information at least once every 90 days.
Rapid Removals: Providers who have left the network must be removed from the directory within five business days (a massive reduction from the traditional 30-day standard).
Facility Checks: Acute inpatient hospitals, intensive care units, and ambulatory surgery facilities must be verified at least every 12 months.
Public Accuracy Scores: Beginning in contract year 2029, CMS will publish directory accuracy scores in a machine-readable format. MA organizations will also be required to prominently display these letter grades in their own directories, allowing beneficiaries to factor directory reliability into their plan selection.

Cost-Sharing Protections: A Paradigm Shift for Billers

Perhaps the most impactful provision for the revenue cycle is the new cost-sharing protection for enrollees, slated to take effect in 2028.

Under the proposed rule, if a senior relies on an inaccurate MA directory and inadvertently receives care from an out-of-network provider, the enrollee will pay no more than the in-network cost-sharing amount. This effectively shifts the financial risk of "ghost networks" from the patient to the health plan.

What this means for medical billing: Currently, when a patient sees an out-of-network provider due to a directory error, the resulting claim denial often triggers a messy, time-consuming appeals process. Billers are forced to balance-bill the patient, leading to disputes and financial hardship. Under the new rule, MA plans will be legally obligated to treat these specific out-of-network encounters as in-network for the patient's out-of-pocket maximums. Billing departments will need to adapt their workflows to ensure that claims denied as out-of-network are promptly appealed with narratives and evidence citing the plan's directory errors on the date of service.

PBM Transparency and Delinking Drug Costs

Alongside the directory crackdown, CMS is