By Courtney Breece, Associate Vice President, Payer, Product, Inovalon
LinkedIn: Courtney Breece
LinkedIn: Inovalon
The Medicare landscape is poised for significant changes with the release of proposed rules from the Centers for Medicare & Medicaid Services (CMS) on November 25, 2024. These rules, set to impact the contract year 2026, aim to reshape key elements of Medicare Advantage (MA), Medicare Prescription Drug Programs (Part D), and other Medicare services. If implemented, the changes will have wide-ranging implications for quality and stars managers, presenting both challenges and opportunities to enhance care delivery and compliance.
With that in mind, let’s break down these proposed rule changes.
Which Medicare programs will be affected by the CMS 2026 Proposed Rules?
In the announcement, the proposed rules would affect several Medicare programs, including:
- MA
- Medicare Part D
- Medicare Cost Plan Program
- Programs of All-Inclusive C
According to CMS, the goal is to hold MA and Part D plans more accountable for delivering high-quality coverage so that people with Medicare can get the proper care when needed.
What changes are being proposed to the CMS Star Ratings?
The Medicare Advantage Star Rating program, used to help Medicare beneficiaries compare different health plans based on their quality and performance, changes routinely. Below are some highlights of the proposed changes to the program in 2026.
- Measure Weight Adjustments: The weights for the patient experience, complaints, and access measures will be reduced from 4 to 2 in 2026
- Health Equity Index (HEI): In 2027, a new HEI will replace the reward factor to incentivize plans that address care disparities
- New and Returning Measures:
- Kidney Health Evaluation for Patients with Diabetes (new, spin-off of CDC measure)
- Improving or Maintaining Physical and Mental Health (new weighting)
- Polypharmacy Measures: New measures will focus on medication safety for older adults, specifically concerning anticholinergics and central nervous system agents
- Quality Improvement Measure: The “hold harmless” provision will apply only to 5-star plans starting in 2026
Other coverage and proposed changes in the CMS 2026 Proposed Rules
The proposed rules included several changes to make Medicare plans competitive on issues that matter to Medicare beneficiaries:
- GLP-1 Coverage: Anti-obesity medications (AOMs) are “permitted” for coverage for Medicare and Medicaid beneficiaries managing chronic weight issues
- Prior Authorization Restrictions: This section outlines when MA plans can apply utilization management and ensures plan coverage policies are transparent and publicly available. The use of AI is restricted
- Promoting Access to Behavioral Health Providers: MA will align mental health cost-sharing with Traditional Medicare, ensuring equitable access for underserved populations
- Consumer Protection: Expanding oversight on marketing materials and increased transparency in provider directories and pharmacy contracts
- Access to Generic Drugs: Requiring pharmacy benefit managers (PBMs) to stop favoring brand name drugs over generics or biosimilars due to rebate arrangements
- Access to Supplemental Benefits via Debit Cards: Plans can no longer promote the dollar value of supplemental benefits via debit cards
- Medical Loss Ratio (MLR) Changes:
- Requirements that provide incentive and bonus arrangements are tied to clinical or quality improvement standards to be included in the MA MLR numerator
- Administrative costs are required to be excluded from quality-improving activities in the MA and Part D MLR numerators
When will the 2026 proposed rules go into effect?
As the healthcare industry navigates these proposed changes, it is essential for stakeholders to stay informed and proactive. CMS has opened a public comment period on the proposed rules, which will close on January 27, 2025. However, these rules will not be finalized until the new Trump administration takes office and determines the future direction of these proposed changes.
Quality and stars managers should use this time to evaluate the potential impacts on their operations, identify areas requiring adaptation, and begin strategic planning to align with potential new regulations.
This article was originally published on the Inovalon blog and is republished here with permission.