On November 25, 2025, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that puts forth policy and technical changes to the Medicare Advantage (MA) and Part D programs for 2027 and beyond. This sweeping proposal includes major revisions to the Star Ratings system, codification of Inflation Reduction Act provisions, and significant regulatory relief measures. Among the most impactful changes are the removal of the Health Equity Index reward, elimination of 12 Star Ratings measures, and adjustments to marketing and enrollment rules. CMS estimates these changes will increase Medicare spending by nearly $14 billion over the next decade, primarily due to higher quality bonus payments tied to revised ratings.
Healthcare stakeholders should assess how these updates affect quality bonus payments, risk adjustment, and health equity initiatives, and prepare to engage in the comment process to shape the final rule. Comments on the proposed rule are due by January 26, 2026.
key takeaways from the contract year 2027 MA and Part D proposed rule
- Significant Star Ratings proposals: CMS proposes several significant changes to the Star Ratings system, including changes that would impact the 2027 ratings and others that would take effect starting with the 2027 measurement and impact ratings in later years.
- Removing Excellent Health Outcomes for All reward (EHO4all): CMS proposes to remove the EHO4all reward (also known as the Health Equity Index) from the 2027 Star Ratings and continue applying the existing reward factor, which was scheduled to end with the 2027 ratings.
- Removing measures: CMS proposes to remove 12 measures from the Star Ratings, beginning with the 2027 measurement year. The 12 measures, including the rating year their removal is proposed are:
- Plan Makes Timely Decisions about Appeals (Part C – 2029 Star Ratings)
- Reviewing Appeals Decisions (Part C – 2029 Star Ratings)
- Special Needs Plan (SNP) Care Management (Part C – 2029 Star Ratings)
- Call Center – Foreign Language Interpreter and TTY Availability (Part C – 2028 Star Ratings)
- Call Center – Foreign Language Interpreter and TTY Availability (Part D – 2028 Star Ratings)
- Complaints about the Health/Drug Plan (Parts C and D – 2029 Star Ratings)
- Medicare Plan Finder Price Accuracy (Part D – 2029 Star Ratings)
- Diabetes Care – Eye Exam (Part C – 2029 Star Ratings)
- Statin Therapy for Patients with Cardiovascular Disease (Part C – 2028 Star Ratings)
- Members Choosing to Leave the Plan (Parts C and D – 2029 Star Ratings)
- Customer Service (Part C – 2029 Star Ratings)
- Rating of Health Care Quality (Part C – 2029 Star Ratings)
CMS estimates that these changes would not impact overall ratings for 62% of contracts. Overall ratings would increase by a half star for 13% of contracts, decrease by a half star for 25% of contracts, and decrease by one star for one contract. Additionally, 5% of contracts would gain quality bonus payments, while 4% would lose quality bonus payments.
CMS projects that these changes, together with additional modifications to individual measures discussed in more detail later in this summary, would increase Medicare spending by $13.8 billion between 2027 and 2036. Most of the increase would come in 2028 and 2029, when CMS estimates spending would increase by $5.0 billion and $2.3 billion, respectively. After that, spending would increase by less than $1 billion each year. This implies that the most significant financial impact would come from the proposal to eliminate the EHO4all reward and retain the existing reward factor.
In addition to the changes proposed for 2027, CMS seeks feedback on ways to shorten the lag between when performance is measured and when quality bonus payments (QBPs) are made, as discussed in more detail below.
- Codifying Inflation Reduction Act (IRA) of 2022 provisions: CMS proposes to codify a number of changes to the Part D benefit design, as required by the IRA, including elimination of the coverage gap phase and the annual out-of-pocket threshold, removing cost sharing for enrollees in the catastrophic phase, and implementing the Manufacturer Discount Program. While these provisions of the IRA are already in effect, CMS had implemented them using temporary authority and is proposing to codify the provisions in regulation.
- Regulatory relief with a focus on health equity requirements: CMS proposes to modify several existing regulatory requirements, including a number focused on health equity. Among other changes, the proposals would:
- Eliminate the requirement for MA quality improvement programs to include activities that reduce health disparities.
- Eliminate health equity requirements for MA utilization management (UM) committees, including the requirement that a health equity expert be included on the committee, and the requirement that a plan conduct an annual health equity analysis and publicly post the results of such analysis.
- Eliminate the requirement that MA plans send mid-year notices informing enrollees about unused supplemental benefits (CMS had previously suspended this requirement, but is moving to formally remove it).
- Reduce the time the Limited Income Newly Eligible Transition (LINET) program must maintain a toll-free customer call center from 8:00 am to 8:00 pm in all regions served by the Part D plan to 8:00 am to 7:00 pm Eastern time Monday through Friday, except holidays.
- Changes to marketing and communications: CMS proposes several changes to rules governing marketing and outreach to beneficiaries, including reducing restrictions on beneficiary outreach and third-party marketing organizations (TPMOs). CMS also notes that, if finalized for the 2027 contract year, these changes would take effect on October 1, 2026, when marketing for the 2027 plan year begins.
- Special enrollment periods: CMS proposes to modify the special enrollment period (SEP) that allows an enrollee to change plans when a provider they see leaves the network. Specifically, CMS proposes to eliminate the requirement that the network change be deemed “significant” in order to trigger the SEP. CMS also proposes to codify existing policy that certain SEPs require prior CMS approval.
- Improvements for SNPs: CMS proposes a number of policy changes for SNPs, focusing on passive enrollment, continuity of care, contract modifications, and Model of Care (MOC) off-cycle submissions.
- Requests for Information (RFIs): In addition to the proposed changes to regulation, and to inform potential future rulemaking, the rule includes several RFIs seeking feedback on several issues. The topics on which CMS invites input include risk adjustment, Stars and QBPs, well-being and nutrition, C-SNPs, marketing oversight and agent and broker regulations, and reducing data collection and reporting burdens.
The full summary of the proposed rule is for McDermott+ clients and McDermott+ Insider subscribers only; please contact your relationship consultant with questions. For inquiries, please contact info@mcdermottplus.com.
MA and Part D proposed rule resources
