CMS Proposes Major 2027 Medicare Advantage and Part D Program Reforms

On November 25, 2025, CMS proposed significant regulatory changes for the 2027 Medicare Advantage (MA) and Part D programs affecting measures under the Star Ratings program, enrollment periods, marketing rules, and dual eligible special needs plans. The proposal codifies provisions of the Inflation Reduction Act (IRA) impacting Part D benefit design, including eliminating the coverage gap, establishing a $2,000 out-of-pocket cap starting in 2025, and instituting a new Manufacturer Discount Program replacing the Coverage Gap Discount. CMS also revises Part D cost sharing, specialty tier drug classifications, and reinsurance methodologies, impacting plan financial operations and manufacturer interactions. CMS introduces new procedures under the SUPPORT Act to identify opioid prescribing outliers and communicate this to Part D sponsors for compliance oversight. Modifications to the enrollment process include a new special enrollment period (SEP) for MA enrollees affected by provider network terminations. CMS aims to strengthen election rules and increase oversight of SEP usage while enhancing access to risk adjustment data by removing previous usage and release restrictions. Marketing regulations are relaxed, including removing prohibitions on superlatives and timing restrictions between educational and marketing events. CMS shortens call recording retention for marketing compliance from 10 to 6 years and removes the Notice of Availability requirement for language assistance, deferring to HHS Office for Civil Rights enforcement. CMS proposes detailed documentation and audit standards for Part D coverage determinations and claim adjudications to enhance program integrity. It establishes a new appeals process for Part D prescription drug event audits, aiming to expand plan sponsors' appeal rights. In Star Ratings, CMS plans to remove 12 measures to simplify and refocus quality metrics, add a depression screening and follow-up measure to address behavioral health, and reject the Health Equity Index Reward in favor of maintaining the historical reward factor. The changes may shift quality bonus payments for some contracts. For Special Needs Plans, CMS proposes technical changes like two Model of Care submission windows and clarifies passive enrollment rules to better facilitate continuity of care for dual eligibles. Amendments to the one D-SNP-per-parent-organization rule address state Medicaid managed care variability, allowing continued enrollment of dual eligibles in Medicaid fee-for-service where mandatory managed care does not apply. CMS also outlines plans for smoother contract terminations when State Medicaid Agency contracts for D-SNPs end mid-year and restricts marketing material submissions for state-only D-SNP contracts. It solicits feedback on improving integration and outcomes for dually eligible beneficiaries in chronic and institutional SNPs. The Proposed Rule includes deregulatory efforts to reduce burdens on providers and plans, aligned with Executive Order 14192. CMS also solicits input on future directions for MA risk adjustment, quality bonuses, well-being and nutrition initiatives to enhance program value and competition. Comments are due January 26, 2026.