The Centers for Medicare & Medicaid Services (CMS) finalized a Medicare Advantage (MA) rule with substantial adjustments to the metrics used for calculating Medicare Advantage star ratings, but did not lock in a proposal to establish a special enrollment period when providers leave the plan’s network.
In line with its proposal back in November, the Contract Year 2027 MA and Part D final rule cuts the Excellent Health Outcomes for All reward. Previously called the Health Equity Index reward, the metric was designed to incentivize better outcomes for a portion of enrollees. CMS affirmed Thursday it will instead use the historical reward factor “that encourages consistently high performance for all enrollees across all quality measures.”
Meanwhile, 11 measures focused on administrative processes that CMS said generally received high marks and showed little variation across plans have been axed. Removing these “duplicative and burdensome” requirements, including documentation and disclosure rules as well as some health equity requirements, aligns with the administration’s sweeping directive to slash regulations in pursuit of improved competition and efficiency.
A new measure around MA plans’ depression screening and follow-up that was floated in the proposed rule has also been finalized. However, in a break from the proposal and in recognition of feedback outlining “its importance in preventing serious complications,” the administration said it would not be removing a measure on diabetes care eye exams for MA plans.
“We are fundamentally shifting our approach to quality,” Chris Klomp, director of the Center for Medicare and chief counselor of the U.S. Department of Health and Human Services, said in a release. “This isn't just about adjusting measures; it's about redefining success. We are moving away from a system that incentivizes administrative box-checking and are instead laser-focused on what truly matters: the clinical outcomes and health of our beneficiaries. This is a critical first step toward a more efficient, effective, and patient-first healthcare system.”
Ratings changes finalized in the rulemaking are now in place for the 2027 measurement year and will show up in star ratings scores starting in 2029.
Among the final rule’s departures from the November proposal is a pause on a new special enrollment window that would have allowed beneficiaries to switch plans if one or more of their regular providers go out-of-network for their current plan.
CMS was relatively quiet on the decision in the final rule, writing that it would not address the comments it received on the proposal but that it “acknowledge[s] the broad interest related to this topic and will continue to consider the extent to which it may be appropriate to engage in future rulemaking in this area.”
The exclusion was not outlined in the agency’s press release on the final rule. However, an included statement from CMS Administrator Mehmet Oz, M.D., broadly describes changes that “protect patients when their providers leave their network,” an apparent reference to the excluded proposal. Fierce Healthcare has reached out to CMS for clarification on the quote’s intent.
Beyond these, the final rule codifies changes to the Medicare Part D prescription drug benefit, including “eliminating the coverage gap phase, establishing a reduced annual out-of-pocket threshold, removing cost sharing for enrollees in the catastrophic phase, and incorporating the Manufacturer Discount Program that replaced the Coverage Gap Discount Program on January 1, 2025,” among other changes, according to a fact sheet.
Two supplemental benefit policies proposed in the CY 2026 proposed rule are also being finalized. One of these strengthens Special Supplemental Benefits for the Chronically Ill (SSBCI) administration by clarifying eligibility requirements and increasing transparency requirements for plans. The other locks in requirements for administering supplemental benefits through debit cards, which CMS said would help combat fraud. CMS also clarified that cannabis products illegal under applicable state or federal law are not allowable as SSBCI.
The Alliance of Community Health Plans, in a statement, applauded the final rule's updates, including the removal of the "flawed Health Equity Index."
“The Administration is taking important steps to improve quality and ensure MA delivers real value for consumers,” Ceci Connolly, president and CEO of the group, said in a statement. “These policies will drive better care, raise the bar on quality and create stronger competition for seniors across the country.”
CMS is expected to soon release the final version of its annual advance notice governing MA and Part D. The proposed version, back in January, outlined a near-flat net payment rate of 0.09% in MA, sparking immediate backlash from the industry.