New Proposed Regulations for Medicare Advantage Modernization
On November 25, 2025, the Centers for Medicare & Medicaid Services (CMS) unveiled new proposed regulations for Medicare Advantage (MA) and Part D, targeting the modernization of these programs by 2027. The proposed changes focus on refining quality measurements, enhancing beneficiary protections, updating risk adjustment models, and integrating significant reforms from the Inflation Reduction Act (IRA). In tandem, CMS is soliciting feedback through Requests for Information (RFIs) on key topics such as risk adjustment and Quality Bonus Payments (QBPs), aiming to optimize chronic care improvements.
The proposal seeks to formalize Part D changes enacted by the IRA. Previously, CMS adopted these reforms through guidance rather than formal rulemaking. By integrating the proposed regulations, CMS aims to cement these changes, introduce the Manufacturer Discount Program, and phase out the Coverage Gap Discount Program.
Proposed Modifications to Star Ratings
CMS is proposing modifications to streamline the Star Ratings system, focusing on evaluations based on clinical care and patient outcomes. By introducing a depression screening and follow-up measure and removing twelve varying operational metrics, CMS anticipates potential drops in ratings. Feedback is encouraged to further refine the system to drive quality enhancements.
Additionally, CMS plans to withdraw the Health Equity Index reward from the Star Ratings, maintaining the historical reward factor. This shift intends to bolster overall clinical improvements. The agency ensures plans receive measurement data during preview periods to maintain transparency before official ratings.
Projected Impact and Stakeholder Feedback
CMS projects that 62% of MA and Part D contracts may remain unaffected under these proposals. However, ratings fluctuations could affect supplemental benefits, premiums, and profitability. Stakeholder input is critical to assessing the financial impacts of these changes.
Improved Marketing and Regulatory Compliance
In marketing, CMS aims to simplify communication rules, reducing beneficiary confusion and easing compliance demands on plans and third-party marketing entities. Feedback is sought on regulatory changes to enhance accountability within the industry sector.
Exploring Alternatives in Risk Adjustment and Quality Bonus Payments
The RFIs tackle areas such as risk adjustment and QBPs adjustments. CMS is exploring alternatives to the Hierarchical Condition Category model, striving for a system that aligns incentives with health outcomes, benefiting both large and small issuers effectively. Within the QBP framework, there is consideration to shorten performance-to-payment timelines to better align quality incentives with prompt care improvements.
The increase in dual enrollees in Chronic Condition and Institutional Special Needs Plans raises regulatory concerns. CMS contemplates regulations to prevent plans from merely mimicking Dual Special Needs Plans without necessary integrations and care coordination infrastructures. By engaging actively in this feedback phase, organizations can anticipate regulatory adjustments, allowing for strategic compliance and operations alignment.