CMS Proposed 2027 Medicare Advantage and Part D Changes Focus on Simplification and Oversight

The Centers for Medicare & Medicaid Services (CMS) has released its Proposed 2027 Policy and Technical Changes for the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, and Medicare Cost Plan Program. These proposals aim to simplify and refocus the Star Ratings system by concentrating on clinical care, outcomes, and patient experience measures while removing 12 measures related to operational and administrative performance, process of care, and patient experience. Notably, CMS does not intend to proceed with the Health Equity Index rewards under this program. The agency also solicits feedback on the quality bonus payment system tied to Star Ratings.\n\nCMS proposes regulatory changes to marketing and communications within Medicare Advantage and Part D plans, including revisions to the definition of third-party marketing organizations (TPMOs), translations, enrollment verification, and the use of testimonials. The agency is seeking input on modernizing marketing oversight to reduce administrative burdens while maintaining accurate beneficiary information and ensuring accountability for TPMOs engaged in questionable practices.\n\nThe proposed rules suggest broader permissible uses of risk adjustment data, allowing CMS to share this data more extensively with government entities and external parties, even before reconciliation, while aiming to protect beneficiary confidentiality. These changes respond in part to recent legal challenges regarding risk adjustment methodologies.\n\nA significant portion of the proposals address the ongoing implementation of Medicare Part D redesigns mandated by the Inflation Reduction Act, including sunsetting the Coverage Gap Discount Program, formalizing the Manufacturer Discount Program, clarifying medical loss ratios, and adjusting amounts counting towards True Out-of-Pocket (TrOOP) costs.\n\nCMS is also exploring ways to streamline Medicare reporting requirements for Medicare Advantage organizations and Part D plan sponsors. This includes seeking technological solutions, such as automated data sharing, to reduce the burden associated with reporting on provider networks, medical loss ratios, utilization of benefits, and special needs plans’ models of care.\n\nThe agency issued a broad Request for Information regarding the Medicare Advantage program's future, with a focus on improving risk adjustment, quality bonus payments, data transparency, beneficiary plan selection, competitiveness, fraud reduction, and taxpayer savings. CMS is actively seeking stakeholder feedback to inform potential program enhancements.