CMS Proposes Major Changes to Medicare Advantage and Part D for 2027

On November 25, 2025, CMS released the Contract Year 2027 Medicare Advantage (MA) and Part D Proposed Rule, which outlines significant regulatory and programmatic modifications impacting the Medicare landscape. Key changes include revisions to the Star Ratings program, a new special enrollment period for enrollees affected by provider terminations, expanded access to risk adjustment data, and relaxed marketing and communications requirements. The rule also codifies previous guidance and rescinds certain prior administration regulations, aiming to streamline processes and reduce administrative burdens. One major area of focus is the implementation of provisions from the Inflation Reduction Act of 2022 (IRA) and the SUPPORT Act of 2018. The IRA's Part D Redesign eliminates the coverage gap phase starting January 1, 2025, simplifies benefit phases, and introduces a $2,000 annual out-of-pocket maximum that eliminates costs during catastrophic coverage. The Manufacturer Discount Program replaces the prior Coverage Gap Discount Program, requiring drug manufacturers to provide point-of-sale discounts in new coverage phases with detailed operational requirements outlined in the Proposed Rule. The Proposed Rule refines the calculation of true out-of-pocket costs, specialty tier drug designation, and reinsurance payment methodologies, affecting Part D plan cost-sharing and financial arrangements with manufacturers. It also details procedures for identifying opioid prescriber outliers as mandated by the SUPPORT Act to assist Part D plans in monitoring and oversight for opioid prescribing behaviors. In Medicare Advantage, CMS proposes modifications to the Special Supplemental Benefits for the Chronically Ill (SSBCI), clarifying prohibitions related to cannabis products while permitting certain hemp-derived ingredients as benefits under defined conditions. The Proposed Rule revises enrollment priorities by establishing a new special enrollment period for beneficiaries impacted by provider network terminations. It enhances CMS oversight on election mechanisms, streamlines risk adjustment data access by removing some restrictions, and strengthens documentation standards for Part D plan coverage determinations to support audit functions. Marketing and communication regulations are relaxed by removing prohibitions on superlative language, adjusting third-party marketing organization disclaimers, shortening call recording retention from ten to six years for marketing and sales, and eliminating the Notice of Availability requirement for language assistance to reduce duplicate administrative burdens. CMS also introduces a new appeals process for Part D Prescription Drug Event audits, modifies timeliness requirements for drug event submission, and proposes variations to the Star Ratings system by removing twelve measures and adding a depression screening measure. The rule proposes retaining the historical reward factor rather than implementing the Health Equity Index reward and estimates mixed impacts on quality bonus payments and plan star ratings. Special Needs Plans (SNPs) will see procedural adjustments, including new deadlines for Model of Care submissions, changes to passive enrollment rules promoting continuity for dually eligible enrollees, and amendments to the "one D-SNP" requirement allowing exceptions in states without mandatory Medicaid managed care. CMS is also seeking feedback on policy options to improve SNP integration and care coordination, specifically for Chronic Condition SNPs and Institutional SNPs. Further proposals target deregulatory measures aligned with Executive Orders to lessen administrative and compliance burdens across Medicare Advantage and Part D programs. CMS also solicits input on future directions addressing risk adjustment methodologies, quality bonus payments, and well-being and nutrition initiatives that could affect program modernization and value maximization. Comments on the Proposed Rule are due by January 26, 2026, marking a critical period for stakeholders to influence the direction of Medicare Advantage and Part D regulatory frameworks.