On November 25, the Centers for Medicare and Medicaid Services (CMS) issued its proposed Medicare Advantage and Part D rule for Calendar Year 2027. Despite the government shutdown, the proposed rule was issued on time – even a few days early. The rule is expected to be finalized in late March or early April after a comment period that ends in late January. The rule is accompanied by some major Requests for Information (RFIs) as well.
Star Ratings proposed changes
I went into details about the Star Ratings proposed changes in a November 28 blog. You can get all the details here: https://www.healthcarelabyrinth.com/cms-medicare-advantage-star-program-to-get-tougher/ .
Here is a quick summary though of major Star changes proposed:
In Measure Years 2026 and 2027 (Star Years 2028 and 2029), CMS proposes to remove 12 measures focused on operational/administrative processes or those that no longer show variability in quality among plans. That has the effect of transferring so-called Star power to drug, HOS survey, and quality improvement measures.
The Excellent Health Outcomes for All (EHO4all, the former Health Equity Index (HEI)), is proposed to not be implemented for Star Year 2027 (Measure Year 2025). The Reward Factor would be maintained for consistently high-performing plans.
CMS also proposes to introduce a new Depression Screening and Follow-Up measure that would begin with MY 2027/SY 2029. This was expected as Universal Foundation measures are rolled out throughout government healthcare programs.
CMS says all of these changes could mean at least a quarter of plans would see a drop in Star ratings.
Enrollment, benefit, and clinical oversight proposed changes
Provider Network SEP: A new Special Enrollment Period (SEP) for provider network changes is proposed, and other existing SEP policies will be codified. If a provider leaves a plan network, an enrollee can change plans to help ensure continuity of care. The MA plan and CMS would no longer have to deem the network change is significant. The change is aimed to allow someone to follow their provider to another plan due to inflight treatment.
SSBCI Prohibition: Special Supplemental Benefits for the Chronically Ill (SSBCI) language would be amended to prohibit coverage of cannabis products that are illegal under federal or state law.
Account-Based Plan Relief: Proposed language would exempt account-based plans (such as health reimbursement arrangements (HRAs), flexible spending accounts (FSAs), and health savings accounts (HSAs)) from creditable coverage disclosure requirements.
Health Equity Provisions Repealed: The proposed rule would remove requirements for MA utilization management committees to include a health equity expert and for quality improvement programs to include activities specifically designed to reduce health disparities.
Supplemental Benefit Notification Repeal: The rule also proposes to remove the requirement for plans to issue mid-year notices regarding unused supplemental benefits.
Marketing and related changes
Waiting Period Relief: The rule proposes to eliminate the 48-hour waiting period between completing a Scope of Agreement (SOA) and holding a personal marketing appointment. The proposed rule would eliminate the mandatory 12-hour waiting period between an educational event and a subsequent marketing event at the same location. Other marketing reforms are proposed to bring flexibility.
TPMO Reform: Key changes impacting Third-Party Marketing Organizations (TPMO) are proposed, including updated language specifying the number of organizations and plans represented, continuation of the TPMO disclaimer verbally during sales calls, and reduction of the required retention period for recordings from 10 years to 6 years. CMS is also asking for input on the TPMO definition and oversight structure.
Superlatives Allowed: The proposed rule also removes the explicit prohibition on superlatives such as “best” or “most” in marketing materials, but marketing content cannot be misleading, confusing, or materially inaccurate.
Inflation Reduction Act codification
The rule will permanently codify reforms to Medicare Part D created by the Inflation Reduction Act (IRA), such as:
- The elimination of the coverage gap.
- The reduction of the annual out-of-pocket threshold.
- Removal of cost sharing in the catastrophic phase.
- Updates to True Out-of-Pocket (TrOOP) cost calculations.
- Clarification related to specialty-tier drugs, reinsurance payments, and subsidy structures.
- Implementing the Manufacturer Discount Program that replaced the Coverage Gap Discount Program.
Requests For Information (RFIs)
CMS is seeking public input on future modernizations:
Risk Adjustment and Star Ratings Programs: CMS wants broad input on changes to reform and modernize the risk adjustment and quality bonus payment systems.
The risk adjustment request stems from the overpayment controversy at large plans and views that the system may discriminate against smaller, newer, and regional plans. CMS may want to migrate to an encounter-based rate-setting system.
Some within CMS and on Capitol Hill also want the Star program to be budget neutral and not additive in terms of funding. MA has the only quality bonus that comes from added dollars. CMS also wants to reduce the two-year time lag in ratings.
Oversight of Chronic Condition Special Needs Plans (C-SNPs) For Dually Eligible Individuals: C-SNPs have grown demonstrably over the past two years. Dual Eligible Special Needs Plans (D-SNPs) were meant to enroll dual eligibles, but more and more are going into the fast-growth C-SNPs. CMS may want to require state Medicaid contracting for C-SNP as well as Institutional Special Needs Plans (I-SNPs).
Well-Being: Coverage of well-being (including preventive care, mental health, and social connections) and nutrition policies.
Additionally, CMS is seeking public input on approaches and opportunities to streamline regulations and reduce burdens on those participating in the Medicare program through a standalone RFI.
#medicareadvantage #partd #regulations #cms
— Marc S. Ryan
