CMS Announces Major Changes for Medicare Advantage and Part D Programs

On April 6, 2026, the Centers for Medicare & Medicaid Services (CMS) introduced the final rule for the Medicare Advantage (Part C) and Prescription Drug Benefit (Part D) programs for Contract Year 2027. Effective June 1, 2026, with certain provisions starting later, the rule introduces significant regulatory changes impacting marketing and program integrity frameworks. These modifications are crucial for insurance carriers to align with evolving regulatory compliance requirements.

The rule aligns with Executive Order 14192, simplifying marketing and enrollment processes while emphasizing program integrity. Insurance providers must reassess compliance and operational strategies to meet these new regulatory demands. Notably, updates mandated by the Inflation Reduction Act affect the Part D benefit format, introducing a Multi-Dose Packaging (MDP) scheme. Health plans need to integrate this format into their systems and adhere to the specified billing protocols.

Key changes include the transformation of the Star Ratings methodology, which now emphasizes survey-based and clinical outcomes, compelling plans to adjust quality improvement strategies accordingly. Marketing regulations have been reduced, effective October 1, 2026, allowing plans to engage potential enrollees more freely. Additionally, supplemental benefits will face heightened transparency and compliance requirements, with further adjustments anticipated for Special Needs Plans. Collectively, the CY 2027 rule improves payment conditions while postponing decisions on critical issues like risk adjustment updates to later cycles.