CMS: Extra Versatile Plan Selections for Medicare Beneficiaries

Last week, the Centers for Medicare & Medicaid Services (CMS) announced updates to certain Medicare plans. CMS explained that it is enhancing health plan quality, making it easier to understand and compare Medicare Advantage (MA) and prescription drug plans, strengthening financial protections in Part D, and reducing unnecessary red tape for plans and providers.

For 2027, CMS announced plans to improve the MA and Part D Star Ratings system to better represent clinical quality, health outcomes, and patient experience.

Key changes include:

• Refocusing the Star Ratings measure set: CMS is streamlining the measure set to give beneficiaries clearer information when choosing a plan. Some measures will be removed, especially those focused on administrative processes and measures where plans perform similarly, providing little useful comparison for beneficiaries. A new Part C Depression Screening and Follow-Up measure is being added to address behavioral health gaps. CMS is keeping the Diabetes Care – Eye Exam measure in the Part C Star Ratings.
• Rewarding sustained high performance: For 2027 Star Ratings, CMS will not implement the Excellent Health Outcomes for All reward (previously called the Health Equity Index reward), which was designed to encourage better performance for a subset of enrollees. Instead, CMS will maintain the historical reward factor to motivate consistently high performance across all enrollees as it works to simplify the Star Ratings methodology.
• Reducing regulatory burden: CMS will remove duplicative and burdensome regulatory requirements, including restrictions on beneficiaries’ access to enrollment information and certain documentation requirements for MA and Part D organizations.

The rule formalizes provisions of the Inflation Reduction Act that revised the Medicare Part D benefit, including:

• Eliminating the coverage gap phase, establishing a lower annual out-of-pocket limit, and removing cost sharing for enrollees in the catastrophic phase.
• Reflecting the statutory end of the Coverage Gap Discount Program and the incorporation of the new Manufacturer Discount Program.