The Next Chapter of Medicare Advantage and Part D: Key Takeaways from the 2027 Proposed Rule

On November 25, 2025, the Centers for Medicare & Medicaid Services (CMS or the “Agency”) released the 2027 Medicare Advantage and Part D Proposed Rule (the “Proposed Rule”).

The Proposed Rule marks a significant step in CMS’s ongoing effort to modernize Medicare Advantage (MA). More specifically, the Agency appears to be trying to refine quality measurement, bolster beneficiary protections, modernize risk adjustment models, and codify major changes to Part D made by the Inflation Reduction Act (IRA) of 2022. CMS also paired the Proposed Rule with a series of Requests for Information (RFIs) regarding risk adjustment and Quality Bonus Payments (QBPs), Chronic Condition Special Needs Plans (C-SNPs), and well-being and nutritional policy changes.

In this Insight, we provide an overview of the major components of the Proposed Rule and the direction that CMS appears to be charting for the years ahead.

Part D: Codifying Statutory Changes/IRA

The Proposed Rule aims to codify significant changes to Part D made by the IRA. The IRA authorized CMS to implement the first few years of many of the IRA's major drug pricing changes through guidance and program instruction rather than notice-and-comment rulemaking. To date, therefore, the Agency has codified very few IRA drug pricing changes into regulation and has instead issued various guidance documents and program instructions to implement the changes—including certain changes that have already gone into effect. If finalized, the Proposed Rule would largely codify the guidance and program instructions issued to implement the Part D redesign, establish the Manufacturer Discount Program, and sunset the Coverage Gap Discount Program, and would also codify other related operational and conforming changes. Epstein Becker Green intends to issue a more detailed overview of these changes.

Star Ratings

CMS proposes a number of changes to the Star Ratings program that are intended to “simplify and refocus the measure set on clinical care, outcomes, and patient experience of care measures,”[1] focus on improving the well-being of beneficiaries, and ensure alignment with the priorities of the Make America Healthy Again initiative.

Proposed Additions and Removals

With respect to the Star Ratings measure set, CMS proposes to add one process measure related to depression screening and follow-up and report that measure on the display page for the 2026 Star Ratings (using data from the 2024 measurement year) and then add the measure to the 2029 Star Ratings (based on the 2027 measurement year). The Agency will display separate rates related to (a) the percentage of eligible plan members who were screened for clinical depression and (b) if screened positive, the percentage who received follow-up care within 30 days. CMS will take an average of these two rates to determine the Star Rating for this measure.

In the Proposed Rule, CMS also plans to remove a total of twelve (12) measures—seven (7) Star Ratings measures focused on operational and administrative performance, three (3) measures focused on process of care, and two (2) measures focused on patient experience of care. CMS explains that many of these measures may be better suited as measures for monitoring plan performance and compliance rather than as quality measures in the Star Ratings program. Ratings for many of these measures are sensitive to small changes in performance because they have smaller denominators. Further, performance rates on these measures are consistently high and do not show variation in performance across contracts, thereby limiting the amount of meaningful information available to beneficiaries when choosing a plan. CMS expects that removing these measures will result in an overall decrease in ratings since performance on many of these measures is currently very high. However, the Agency believes this is balanced out by the proposal to remove the Health Equity Index (HEI) reward, also called the Excellent Health Outcomes for All reward, and the continuation of the historical reward factor (discussed below), which CMS estimates will generally increase ratings.

In addition to seeking feedback on the proposed measure removals, CMS also seeks feedback more generally on ways to streamline and modify the Star Ratings methodology to further incentivize quality improvement, as well as suggestions for new outcome measures that promote prevention and wellness (such as nutrition and patient well-being measures) and suggestions for additional measure removals in future years.

HEI and Historical Reward Factor

CMS previously finalized its proposal to implement the HEI reward for the 2027 Star Ratings (based on data from the 2024 and 2025 measurement years) and to remove the historical reward factor at the same time. The HEI reward was intended to incentivize Part C and Part D contracts to focus on improving care for enrollees who are dually eligible, receive a low-income subsidy, or are disabled. CMS now proposes not to move forward with implementing the HEI reward and instead to continue including the historical reward factor in the Star Ratings methodology. The Agency states that it prefers to incentivize improvement efforts on clinical care, outcomes, and patient experience across all measures, rather than having plans focus only on improvement among the populations included in the HEI reward, and it hopes to find ways to simplify the Star Ratings methodology in the future.

Finally, CMS proposes to codify its current practice of providing certain information to plans during the two plan preview periods that occur before the Star Ratings are released in October of each year. In particular, the Agency includes de-identified contract-level sample data for one of each type of measure needed for plan sponsors to replicate the calculation of the measure-level cut points—i.e., one Consumer Assessment of Healthcare Providers and Systems (CAHPS) measure, one measure for Part C and one for Part D that use clustering, and any measures requiring a different type of calculation such as Complaints about the Plan. CMS provides this data so that plan sponsors can validate the Agency’s cut-point calculations.

Expected Impact

Overall, CMS estimates that the proposals to remove the HEI reward, keep the historical reward factor, and remove the 12 measures will have no impact on the overall rating for 62 percent of contracts, while the overall rating will increase by a half star for 13 percent, decrease by a half star for 25 percent, and decrease by one star for the remaining contracts. Further, CMS estimates that 5 percent of contracts will gain QBPs and 4 percent of contracts will lose QBPs. CMS recognizes that these proposed changes could have an impact on supplemental benefits, premiums, and plan profits. The Agency requests comments on the extent to which the provision of goods or services would increase or decrease in association with the payment changes resulting from these proposals.

See Exhibit A for a summary of the proposed changes to specific Star Ratings measures.

Marketing/Communications and Agents/Brokers

CMS proposes several changes to the MA and Part D marketing rules to reduce beneficiary confusion while lessening the burden on plans and Third-Party Marketing Organizations (TPMOs). The Agency also asks for stakeholder input on other potential regulatory changes and also on how to modernize marketing oversight “to hold bad actors accountable,” while not burdening those TPMOs and plans that adhere to CMS requirements.

Key proposed changes:

• Revising the TPMO disclaimer to remove reference to State Health Insurance Assistance Programs as a source of recommended information
• Providing flexibility on the timing in which agents/brokers must read the TPMO disclaimer when speaking to a beneficiary by phone
• Loosening restrictions on holding marketing events immediately after educational events and allowing for certain marketing-related actions, such as the collection of Scopes of Appointment (SOAs), to occur at educational events
• Removing the 48-hour requirement for completion of an SOA prior to a marketing appointment without requiring a specific timeframe
• Removing the prohibition on the use of superlatives in marketing
• Changing the record retention requirement so that plans would be required to maintain recordings of the marketing portion of calls for six years, with the 10-year retention requirement continuing to apply to the enrollment portion of calls.

Potential future changes (comments requested):

• Modifying the 5 percent translation requirement found in 422.2267 and 423.2267
• Modifying the TPMO definition to delineate the roles of and requirements applicable to different kinds of TPMOs
• Removing the requirement for approval of plan’s use of the Medicare Card image found in 422.2262(a)(1)(xix) and 423.2262(a)(1)(xviii)
• Eliminating Outbound Enrollment Verification requirements found in 422.2272(b) and 423.2272(b)
• Modifying testimonial requirements found under 422.2262(b) and 423.2262(b)
• Eliminating mailing statement requirements found under 422.2267(36) and 422.2267(e)(37)

Regulators further asked for input on proposed changes to “address non-compliance, holding MA plans and Part D sponsors accountable for those TPMOs who provide inaccurate, misleading, and confusing information, or act in a manner contrary to our requirements.” Specifically, CMS is requesting comment on:

• how to hold “bad actors” accountable while not burdening TPMOs and plans that are in compliance;
• how to properly align incentives in the agent or broker space; and
• how to better use data and leverage technology/AI to review, monitor, and assess compliance.

RFIs

CMS issued three distinct RFIs as part of the Proposed Rule. The RFIs cover:

• risk adjustment and QBPs,
• Dual Eligible Enrollment in C-SNPs and Institutional Special Needs Plans (I-SNPs); and
• well-being and nutrition policy changes.

The following is a brief overview of the RFIs and potential implications.

RFI: Risk Adjustment and QBPs

CMS has solicited feedback on seven areas regarding risk adjustment. The Agency is:

1. reassessing which diagnoses should count for risk adjustment,
2. evaluating the appropriate timeframe for using diagnostic data,
3. considering whether a diagnosis should be valid for risk adjustment only when tied to encounters with properly paid or otherwise validated claims,
4. examining whether to move toward encounter-based or inferred risk-adjustment models that rely on utilization indicators rather than diagnosis codes alone,
5. analyzing how to design the next-generation risk adjustment model that draws on alternative inputs,
6. assessing how artificial intelligence could calibrate current or affect future risk adjustment models, and
7. exploring whether risk adjustment should incorporate broader data sources.

The fourth area above may be of special interest to MA plans and stakeholders. Specifically, there is a growing industry recognition that the existing risk adjustment model based on Hierarchical Condition Category (HCC) should be supplemented or potentially replaced by a model that infers risk from real patterns of care rather than diagnosis codes alone, because HCC-capture improvement efforts are resource-intensive. From CMS’s viewpoint, the current HCC-based risk adjustment model has created an environment in which MA plan revenues are closely tied to HCC-capture improvement efforts and may not necessarily correlate with better health outcomes for Medicare beneficiaries. The Agency is therefore envisioning a new risk adjustment model in which the HCC-based risk adjustment model can include either additional elements of encounter data or entirely new sources of data—such as utilization patterns, clinical markers, lab values, or prescription activity—to identify disease severity with greater accuracy than primarily relying on HCCs.

The RFI on risk adjustment encompasses CMS’s vision to modernize the MA program and strengthen competitive conditions in a market where more than half of Medicare beneficiaries are now enrolled. The Agency has indicated on several occasions that the current risk adjustment structure creates disparities between large national health plans and smaller regional issuers, where the incentives reward administrative behavior (e.g., coding improvement efforts) in ways that diverge from beneficiary outcomes. In sum, the risk adjustment RFI focuses on soliciting ideas for program reform that may result in less risk adjustment manipulation, improve patient outcomes, and maximize value for taxpayers.

QBP Program

CMS is undertaking a broad review of the structure of the MA QBP program to ensure that the MA quality incentive system promotes accurate measurement, equitable competition, and timely accountability for plan performance. The QBP RFI builds on recent concerns raised in the 2024 Consolidation in Health Care Markets RFI jointly issued by the Federal Trade Commission, the U.S. Department of Justice, and the Department of Health and Human Services, where some respondents requested reforms to address score inflation, gaming, and competitive distortions that do not reflect actual enrollee outcomes. These concerns have also been documented by MedPAC, academic researchers, and commenters to the annual notices that the Star Ratings program relies on outdated performance data and does not effectively drive improvement.

The Agency notes that a major weakness of the current QBP program is the significant delay between performance and payment. New measures require years of testing and at least two years on display before they can be added to the Star Ratings program. Once a measure is added to the program, there is a two-year lag between when data on the measure is collected and when plans are submitting bids using the QBP rating associated with that measure data. This ultimately creates a total lag of up to three years between measurement and financial impact. To address the disconnect, the Agency is seeking comment on ways to shorten these timelines, including reducing the display period, and possibly developing a CMS Innovation Center model that delinks QBP from the MA bid cycle, which would allow bonuses to reflect more current performance and better support timely quality improvement and cost containment efforts.

RFI: Increased Dual Eligible Enrollment in C-SNPs and I-SNPs

CMS notes the significant growth in C-SNPs and expresses concern about the rising proportion of dual eligible individuals enrolling in both C-SNPs and I-SNPs. The Agency explains that “the challenges with C-SNPs and I-SNPs enrolling high proportions of dually eligible individuals are similar to the challenges of D-SNP look-alikes,” because dual eligible beneficiaries enrolled in these plans may not receive the Medicaid coordination, integrated benefits, or care management supports that are central to the Dual Special Needs Plan (D-SNP) model. In light of these trends, CMS is seeking comment on whether additional guardrails or integration requirements may be necessary to prevent C-SNP and I-SNP products from functioning as de facto D-SNP look-alikes.

Specifically, CMS requests input on three potential policy pathways. First, the Agency asks whether C-SNPs or I-SNPs with high concentrations of dual eligible enrollees should be required to enter into Medicaid contracting arrangements similar to those required of D-SNPs, thereby “allow[ing] States to proactively consider and coordinate their integration strategy for dually eligible individuals” with these plans. Second, CMS seeks comment on strategies to increase care coordination expectations for C-SNPs and I-SNPs that disproportionately serve duals, noting that these plan types are not currently subject to the enhanced care coordination standards that apply to D-SNPs. Third, the Agency requests feedback on whether certain elements of the D-SNP look-alike limitations—such as enrollment thresholds, contracting requirements, or benefit design tests—should be applied to C-SNPs and I-SNPs to ensure that dual eligible individuals are directed into integrated care models rather than into MA-only structures.

If CMS ultimately extends D-SNP-style integration requirements or look-alike guardrails to C-SNPs and I-SNPs, operators of these products may face substantial changes to their Medicaid contracting strategies, enrollment management, and care coordination infrastructure. Plans with high proportions of dual eligible enrollees may need to pursue new or expanded agreements with state Medicaid agencies, strengthen care coordination capabilities to meet D-SNP-like standards, and redesign benefit packages or marketing strategies to avoid triggering future look-alike classifications. Depending on state readiness and existing Medicaid program structures, some plans may also need to reassess product sustainability or consider transitioning certain SNP offerings into integrated models to remain compliant with evolving federal expectations.

RFI: Well-Being and Nutrition Policy Changes

CMS seeks stakeholder input on policies to improve beneficiary well-being and nutrition and strengthen MA organizations’ ability to invest in care that promotes long-term health and mitigates chronic disease.

Well-being, as explained by CMS, is a broad approach to disease prevention and health promotion that integrates mental and physical health while also emphasizing preventative care. The Agency is requesting input on tools and policies designed to improve emotional health, social connections, purpose, and fulfillment. This includes feedback on the applicability of tools and constructs that assess the integration of complementary and integrative health, skill-building, and self-care within the MA framework.

CMS also introduced a separate, parallel RFI on policies to support optimal nutrition and preventive care among MA enrollees. Nutrition improvement may include strategies, guidelines, and practices designed to promote healthy eating habits and ensure individuals receive the necessary nutrients for maintaining health, growth, and overall well-being. Such policies may also include aspects of health that support or mediate nutritional status, such as physical activity and sleep.

A common theme underpinning both RFIs is the role of financial incentives. CMS explicitly seeks feedback on how incentives can be improved to ensure that the risk borne by MA organizations provides them with adequate, long-term motivation to support beneficiaries in improving their well-being and nutritional habits.

While the Agency will not be addressing specific comments received in response to these RFIs, the Agency intends to use the collected input to inform its policy development efforts in future rulemaking cycles or potentially through the testing of new payment and service delivery models by the CMS Innovation Center.

Conclusion

The Proposed Rule will have a significant impact on any organization in the MA or Part D market. Organizations should therefore see the comment phase of the rulemaking process as an opportunity to take stock of current processes and consider how upcoming changes may alter operational demands and strategic priorities. Accordingly, Epstein Becker Green health care attorneys are tracking the Proposed Rule closely and are available to help assess its potential impacts, develop comment submissions, and support planning efforts as CMS moves forward with the proposed changes.

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Exhibit A

The measures that CMS proposes to add and remove, and the impacted Star Ratings year, are summarized below.

Part C or D	Measure Name	Measure Type	Add or Delete	Star Ratings Year for Change	Reason
C	Call Center – Foreign Language Interpreter and TTY Availability	Operational / Admin	Delete	2028 Star Ratings	The measure topped out, with little variation in performance across contracts. CMS will continue to monitor the plan’s performance, as well as compliance and customer service issues through CAHPS.
D	Call Center – Foreign Language Interpreter and TTY Availability	Operational / Admin	Delete	2028 Star Ratings	The measure topped out, with little variation in performance across contracts. CMS will continue to monitor the plan’s performance as well as compliance and customer service issues through CAHPS.
C	Statin Therapy for Patients with Cardiovascular Disease	Process of Care	Delete	2028 Star Ratings	There is little variation in performance across contracts, and other measures cover Medication Adherence for Cholesterol (Statins). An updated measure finalized by the National Committee for Quality Assurance for the 2026 measurement year will be placed on the 2028 display page and monitored for changes in performance.
C	Depression Screening and Follow-Up	Process of Care	Add	2029 Star Ratings	There are currently no other measures specific to behavioral health care, and adding the measure fills an important gap. CMS will begin reporting the measure on the 2026 display page.
C	Plan Makes Timely Decisions about Appeals	Operational / Admin	Delete	2029 Star Ratings	The measure topped out, with little variation in performance across contracts. CMS will continue to monitor the plan’s performance on appeals and access issues through CAHPS.
C	Reviewing Appeals Decisions	Operational / Admin	Delete	2029 Star Ratings	The measure topped out, with little variation in performance across contracts. CMS will continue to monitor the plan’s performance on appeals and access issues through CAHPS.
C	Special Needs Plan (SNP) Care Management	Operational / Admin	Delete	2029 Star Ratings	The measure does not provide information about whether enrollees ultimately received needed care, as indicated by their health risk assessments. The measure will be moved to the display page.
C & D	Complaints About the Health/Drug Plan	Operational / Admin	Delete	2029 Star Ratings	The measure topped out, with little variation in performance across contracts. CMS will continue to monitor the plan’s performance and access to care/patient experience issues through CAHPS.
D	Medicare Plan Finder (MPF) Price Accuracy	Operational / Admin	Delete	2029 Star Ratings	The measure topped out, with little variation in performance across contracts. CMS will continue to monitor the plan’s performance and access to related drug prices posted on MPF.
C	Diabetes Care – Eye Exam	Process of Care	Delete	2029 Star Ratings	There are other measures that focus on diabetes care. The measure will be moved to the display page.
C & D	Members Choosing to Leave the Plan	Process of Care	Delete	2029 Star Ratings	The measure does not allow for meaningful comparisons between contracts. The measure will be moved to the display page.
C	Customer Service	Patient Experience of Care	Delete	2029 Star Ratings	There is little variation in performance across contracts. CMS will continue to collect data for quality improvement and report the measure on the display page.
C	Rating of Health Care Quality	Patient Experience of Care	Delete	2029 Star Ratings	There is little variation in performance across contracts. CMS will continue to collect data for quality improvement and report the measure on the display page.

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For additional information about the issues discussed in this Insight, please contact the attorney(s) listed on this page or the Epstein Becker Green Health Care and Life Sciences attorney who regularly handles your legal matters.

Sara Devaraj, a Law Clerk – Admission Pending (not admitted to the practice of law) in Epstein Becker Green’s Washington, DC, office, contributed to the preparation of this Insight.

ENDNOTE

[1] 90 Fed. Reg. at 54,964 (Nov. 28, 2025).