Medicare Program; Contract Year 2027 and Certain Contract Year 2026 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, and Medicare Cost Plan Program

Finally, we solicited feedback on ways to streamline and modify the Star Ratings methodology to further incentivize quality improvement and suggestions for new outcomes measures to promote prevention and wellness of health and drug plan enrollees to make the Star Ratings program more aligned with MAHA efforts related to healthy aging, such as nutrition and patient well-being. We also solicited feedback on additional measures that could be removed in future years.

Commenters broadly supported CMS's goal to streamline the Part C and D Star Ratings program and shift towards more outcome-focused and prevention-oriented measures, but many commenters cautioned against rapid, large-scale changes that could destabilize plans, reduce competition, and disproportionately harm plans serving high-need, complex, or vulnerable populations (e.g., SNPs, dually eligible individuals, and ESRD beneficiaries). Commenters urged CMS to phase in changes slowly, preserve stability tools in the methodology (guardrails, hold harmless, predictable cut points), and ensure fair benchmarking through stratification by plan type, population, and geography. Many commenters recommended reducing reliance on process and survey-based measures that have small samples or high volatility, while expanding outcome measures tied to chronic disease management, functional status, behavioral health access, nutrition/food-as- medicine, primary care investment, provider experience, and care transitions. Across commenters, there are comments related to aligning measures across programs, reducing administrative burden, improving transparency, and ensuring that quality incentives reflect plan-driven actions that improve beneficiary health, access, and well-being.

We will take all comments received into consideration as we consider ways to streamline and modify the Star Ratings methodology and continue to review the Star Ratings measure set. Any additional changes to the methodology and measure set would need to go through the rulemaking process.

D. Health Equity Index Reward (Sec. Sec. 422.166(f)(3) and 423.186(f)(3))

In the “Medicare Program; Contract Year 2024 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, Medicare Cost Plan Program, and Programs of All- Inclusive Care for the Elderly” final rule, which appeared in the Federal Register on April 12, 2023 (88 FR 22120) (“Contract Year 2024 final rule”), we finalized the addition of the Health Equity Index (HEI) reward (also called the Excellent Health Outcomes for All (EHO4all) reward) \104\ along with the removal of the historical reward factor at the same time. The HEI reward was intended to further incentivize Part C and D contracts to focus on improving care for enrollees that are dually eligible, receive a low-income subsidy, or are disabled because these groups are at risk for poor health outcomes and Star Ratings data show gaps in the quality of care for these enrollees. This reward was finalized at 42 CFR 422.166(f)(3) and 423.186(f)(3) to be implemented beginning with the 2027 Star Ratings using data from the 2024 and 2025 measurement years. The historical reward factor, which incentivizes consistent high performance across Star Ratings measures, was finalized at Sec. Sec. 422.166(f)(1) and 423.186(f)(1) to be removed from the Star Ratings methodology with the implementation of the HEI reward in the 2027 Star Ratings using data from the 2025 measurement year. The historical reward factor was included in the Star Ratings beginning with the 2009 Star Ratings with the purpose of adding incentives for contracts to achieve high and stable relative performance across all measures.

\104\ In the 2026 Rate Announcement, we began to rebrand the Health Equity Index reward with a new name, the EHO4all reward. https://www.cms.gov/medicare/payment/medicare-advantage-rates-statistics/announcements-and-documents/2026.

Since the Contract Year 2024 final rule, we have reviewed the HEI reward consistent with the Executive Order 14192, “Unleashing Prosperity Through Deregulation” and proposed to remove the HEI reward from the Star Ratings methodology. We proposed not to implement the HEI reward with the 2027 Star Ratings and instead continue the historical reward factor. Rather than incentivizing improvement among certain populations like those included in the HEI, CMS would instead incentivize improvement efforts on clinical care, outcomes, and patient experience, in line with the policy finalized in section V.B. of this final rule to refocus the Star Ratings measure set. We recognize that some health plans may have already expended resources on performance improvement focused on the populations included in the HEI reward; however, any improvements in performance among these populations will still contribute to higher performance on the Star Ratings by increasing measure-level scores even without the implementation of the HEI reward. Higher measure-level scores benefit health plans by improving overall performance on the Star Ratings.

This shift is part of a broader effort to refocus the Star Ratings on clinical care, outcomes, and patient experience. In section V.B. of this final rule, we provide more detail about the efforts to refocus the measurement set. Improvements in clinical care can lead to better patient outcomes and, ultimately, higher Star Ratings.

This shift also aligns with our focus on exploring ways to simplify and modify the Star Ratings methodology to further drive quality improvement. Rather than implement the change to the methodology to add the HEI reward and remove the historical reward factor, we instead proposed to keep the methodology consistent for now as we explore ways to simplify the methodology in the future. See section V.C., where we solicited comment on ways to simplify and modify the Star Ratings methodology to further drive quality improvement. Any such simplifications or modifications would be proposed in future rulemaking.

Typically, CMS has proposed and finalized changes to the Star Ratings methodology in advance of the measurement year (which aligns with the rules for measure updates). However, this proposal would avoid the need for updates to the Star Ratings methodology, including a significant amount of programming, as well as updates to the Star Ratings technical documentation and data display in the HPMS, to reflect the temporary addition of the HEI reward and removal of the historical reward factor. Therefore, we proposed to not implement the HEI reward and to continue to implement the historical reward factor beginning with the 2027 Star Ratings. To remove the HEI reward and revert to the historical reward factor in the Star Ratings methodology, we proposed to remove the paragraphs at Sec. Sec. 422.166(f)(3) and 423.186(f)(3), and to modify Sec. Sec. 422.166(f)(1) and 423.186(f)(1) to remove “Through the 2026 Star Ratings.”

We invited public comment on this proposal and received several comments. A discussion of these comments, along with our responses follows.

Comment: Many commenters supported not implementing the HEI reward and adding back the historical reward factor in the 2027 Star Ratings. These commenters cited many reasons for support including:

perceived unfairness of the HEI reward enrollment thresholds and not all contracts being able to qualify for the HEI reward factor,

perceived disadvantage to smaller, regional, or provider- owned plans in meeting enrollment thresholds compared to larger plans and the potential for anti-competitive dynamics as a result,

perceived geographic bias against states that have not expanded Medicaid, because of dual eligibility being one of the main social risk factors included in the HEI,

state policies in some states requiring D-SNP only contracts,

some states have expanded or more generous Medicaid eligibility, while other states use a more limited definition of low income;

continued recognition of consistent high performance on the Star Ratings through inclusion of the historical reward factor,

inadequate understanding of methodology and performance outcomes associated with the HEI,

request for predictability and stability of the Star Ratings and associated QBPs while CMS considers broader simplifications to the Star Ratings methodology,

reduced administrative burden and complexity,

exclusion of some groups with social risk factors such as rural enrollees,

belief that the Star Ratings already incentivized plans to invest in improving health outcomes for enrollees with social risk factors,

perceived ability for plans to better maintain supplemental benefits, have more resources for quality improvement initiatives and member services, and avoid increasing premiums and potential loss of coverage for some enrollees,

perceived ability for plans to invest in prevention and management of chronic disease, and avoid placing additional strain on local healthcare systems,

focus on overall quality for all members, and

belief that improvements made among the populations included in the HEI will help overall Star Ratings performance.

Commenters also appreciated CMS's responsiveness to previous stakeholder feedback recommending not implementing the HEI reward and retaining the historical reward factor.

Response: CMS appreciates these commenters' support. We agree that not implementing the HEI reward and continuing the historical reward factor will result in more stability in the Star Ratings as we consider other changes to refocus the measure set and simplify the Star Ratings methodology. Additionally, we agree that any improvements made by contracts among populations included in the HEI reward will only help with performance on the Star Ratings more broadly, and such improvements should be made regardless of the Star Ratings methodology. We also feel it is important to be responsive to concerns raised by commenters as we have received feedback consistent with these comments over the past few years, including in response to the Medicare and Medicaid Programs; Contract Year 2026 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, Medicare Cost Plan Program, and Programs of All-Inclusive Care for the Elderly proposed rule and the Advance Notice of Methodological Changes for Calendar Year (CY) 2026 for Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies.

Comment: Some commenters encouraged CMS to continue to look for ways to evaluate health equity and address social risk factors, cultural competency, and complex care needs in the Star Ratings. Commenters expressed that it is important to ensure vulnerable populations do not have barriers to care and to hold MA plans accountable for improving the care of vulnerable populations. A commenter stated that future proposals in this area should be supported by a clear policy rationale, transparent methodology, and robust stakeholder engagement.

Response: CMS appreciates these comments and will take them into consideration as we continue to consider future changes to the Star Ratings methodology. Any changes to the Star Ratings methodology will be proposed through the rulemaking process and would include a policy rationale and impact analysis of the proposed changes and an opportunity for stakeholder feedback.

Comment: Several commenters encouraged CMS to implement a one-year or multiple-year hold harmless policy starting with the 2027 Star Ratings where contracts would earn the better of the HEI reward and the historical reward factor, or a phased transition for removing the HEI reward.

Response: CMS does not agree that such a hold harmless or phased transition is necessary, because any improvements contracts made among the populations included in the HEI are consistent with existing program goals and expectations to provide high quality care to all enrollees, including those that are dually eligible (DE), receive a low-income subsidy (LIS), or are disabled. Improvements made for these populations are not isolated to the HEI reward and will only help contracts in their performance on the Star Ratings more broadly. Contracts can earn five stars for the overall rating without either the HEI reward or the historical reward factor, and adding back the historical reward factor does not penalize contracts because it is an upside only reward. Additionally, implementing the

HEI reward for only one year would be operationally complex and it would be potentially confusing for plans and beneficiaries for the methodology to change for just one year only to then revert back to the prior methodology. Additionally, all of this would happen at the same time that we are considering ways to simplify the methodology in the future.

Comment: A couple of commenters supported removing the HEI reward but did not support adding back the historical reward factor. A few other commenters suggested changes to the historical reward factor methodology. A commenter stated their belief that some measures included in the Star Ratings are flawed or may be influenced by administrative scale, vertical integration, or extensive outreach, and they argued for the historical reward factor to be sunset or narrowed. The commenter also stated that the reward factor favors plans with resources to optimize across a large measure set. A couple commenters believed the historical reward factor should not be based on variance in performance either because they believed this penalizes plans or because the ratings are dynamic in terms of the measure set and cut points. A commenter stated that the historical reward factor creates a cliff problem, because it includes cut offs for mean and variance, and further stated that CMS should develop a continuous reward that incentives excellent performance.

Response: CMS will consider whether the historical reward factor should continue to be part of the Star Ratings in the future. However, performing consistently well across the full set of Star Ratings measures is an indicator of overall plan quality. This is consistent with the Star Ratings methodology as a whole, which emphasizes the importance of performing well across a variety of measures and showing improvements from the prior year. This is also reflected in how we set cut points each year based on industry performance, include the improvement measures, and include a measure set focused on a range of clinical care, outcome, and patient experience measures. Contracts should not focus on performing well on only a few measures.

CMS also appreciates the suggestions for changes to the historical reward factor methodology. We are continuing to implement the historical reward factor under the current methodology at this time while we consider ways to simplify and modify the Star Ratings methodology to further drive quality improvement. Any changes to the historical reward factor methodology would need to be proposed through rulemaking.

Finally, we note that the historical reward factor is intended to reward consistent high performance across the Star Ratings measures. If a contract has high variance in performance, it will not receive a reward under the historical reward factor. Since the intent is to reward contracts with both high mean and high variance, cut offs are required to define high mean and high variance. CMS will take the comments related to a continuous reward factor into consideration; however, it would not be appropriate to assign a reward factor to all contracts regardless of the level and consistency of performance as this is inconsistent with the intent of the reward factor. We also note that no contracts are penalized by the reward factor because it is upside only.

Comment: A number of commenters opposed removing the HEI reward and adding back the historical reward factor. Several commenters raised concerns about the timing of this proposal since it is not in advance of the measurement years for the HEI reward and historical reward factor for the 2027 Star Ratings. Commenters argued plans have made investments in improving care for populations included in the HEI reward. A couple of commenters noted negative financial implications for plans that invested in improving care as a result of the HEI reward. Other commenters raised concerns about removing incentives for plans to invest in care models, improved access, and high quality care for populations with high needs and social risk factors. A few commenters stated that plans are consistently denying patients needed care and the historical reward factor does not address this, and that therefore CMS should allow plans to move forward with efforts to implement the HEI. A commenter stated that it reasonably relied on the finalized HEI provisions in its planning.

Response: CMS expects that plans will invest in improving care for all enrollees regardless of the Star Ratings and QBPs, including among enrollees that may have higher needs, such as the populations included in the HEI reward. This expectation is appropriate and consistent with MA statutory and regulatory requirements under section 1852 of the Social Security Act (the Act) and implementing regulations at 42 CFR part 422. Under section 1852(a)(1)(A) of the Act and Sec. 422.101(a), MA organizations must furnish, with limited exceptions, all Medicare- covered benefits to enrollees. Section 1852(e) of the Act and Sec. 422.152 further require MA organizations to maintain ongoing quality improvement programs designed to improve the quality of care provided to all enrollees, while section 1852(d) of the Act and Sec. 422.112 require that MA organizations offering network-based coordinated care plans ensure that covered services are available and accessible to each enrolled individual with reasonable promptness and continuity of care. Collectively, these provisions establish that MA organizations must ensure equitable access to high-quality care for all enrollees, including dually eligible, low-income, and disabled beneficiaries. While CMS recognizes that plans have made investments to improve care for populations included in the HEI reward, these investments should not be viewed as contingent on the continuation of a specific reward mechanism, as improvements in care delivery, access, and outcomes for these populations are foundational to the MA program and remain important regardless of the Star Ratings structure. Improvements in performance among these populations will still contribute to higher performance on the Star Ratings by increasing measure-level scores even if the HEI reward is not implemented. Furthermore, as previously explained, maintaining the historical reward factor instead of implementing the HEI reward will incentivize improvement efforts on clinical care, outcomes, and patient experience for all enrollees, rather than incentivizing improvement for only certain populations. This consideration outweighs concerns about any potential reliance by plans on a future policy that had not yet been implemented. CMS expects that plans will work to provide high quality care to all enrollees and address instances where lower quality care may be provided to certain groups of enrollees. CMS expects this regardless of the Star Ratings methodology and incentives. Further, any improvements plans made in anticipation of a future HEI reward are for the benefit of enrollees and have the potential to boost the plan's Star Ratings performance, whether the HEI reward is included in the Star Ratings or not. While CMS acknowledges the commenter's statement regarding reliance on the inclusion of the HEI reward, CMS notes that plans remain responsible for meeting existing quality requirements and delivering appropriate care to all enrollees. Removal of the HEI provisions do not negate or undermine investments made to improve care, as such efforts continue to advance quality improvement goals and overall

performance under the Star Ratings program.

Comment: A couple of commenters stated that removing the HEI reward from the 2027 Star Ratings is impermissibly retroactive or a retroactive policy change.

Response: CMS disagrees with the commenters' assertion that removing the HEI reward from the 2027 Star Ratings is retroactive. There are no retroactive effects on past Star Ratings. That is, all Star Ratings that have already been calculated stay exactly the same. This change only affects how Star Ratings will be calculated in the future, starting with the 2027 Star Ratings.

Removing the HEI reward is a methodology change, not a measure specification change. At Sec. Sec. 422.164(c) through (e) and 423.184(c) through (e), CMS lays out rules for adding, removing and updating measures and what needs to be finalized prior to the measurement year. In this case, we are not changing any measure specifications or the data plans must collect or report to CMS. We are updating how a reward will be calculated using existing data.

Pursuant to our authority under sections 1856(b) and 1860D-12 of the Act to adopt standards to carry out the Part C and D programs, CMS may update and improve the Star Ratings methodology over time. This methodology change is being made through the notice-and-comment rulemaking process, which means plans and other stakeholders were given advance notice, had the chance to submit comments, and are receiving a formal response in this preamble. CMS did take into consideration that some plans may have made investments based on the HEI reward being implemented; however, these investments should still be reflected in the measure scores and benefit contracts that showed significant improvement in the care that they provided to the populations includes in the HEI reward.

Comment: A couple of commenters stated that removing the HEI and continuing the historical reward factor risks allowing plans to improve on average while not improving or potentially worsening disparities in performance among high-need and socially disadvantaged populations. One commenter stated if CMS does not move forward with the HEI it should replace it with stratified reporting or weighting for dual eligible/LIS enrollees so that plans can't improve on average while neglecting high- need populations.

Response: CMS appreciates these suggestions for modifying the Star Ratings methodology to account for dual eligible/LIS enrollees and will take them into consideration as we consider future changes to the Star Ratings methodology. CMS expects that plans will work to provide high quality care to all enrollees and address instances where a lower quality of care may be provided to certain groups of enrollees. CMS expects this regardless of the Star Ratings methodology and incentives. Plans remain responsible for meeting existing quality requirements and delivering appropriate care to all enrollees.

Comment: A few commenters did not support rewarding historical performance through the historical reward factor. A commenter stated that tying incentives to historical performance may result in plans focusing on preserving existing metrics rather than making forward- looking investments in care coordination, preventive services, and community-based supports that are important for socially complex populations. The commenter further stated that without adjusting for social risk, the historical reward factor may dampen incentives for innovation among plans serving more complex populations.

Response: These commenters may have misunderstood what we meant by historical reward factor. This reward factor does not rely on historical data. The use of historical was meant only to clarify that we were referring to the reward factor that has been in the Star Ratings since the 2009 Star Ratings and to distinguish this reward factor from the HEI reward. The historical reward factor uses the same, most recently available data as the rest of the Star Ratings calculations.

Comment: A commenter stated their belief that removing the HEI would perpetuate D-SNPs being penalized by the Star Ratings as a result of the impact of non-medical risk factors on enrollees' health. The commenter supported continuing the HEI or making changes to the Categorial Adjustment Index (CAI) for D-SNPs. The commenter also stated the Star Ratings do not adjust for member mix effectively.

Response: CMS appreciates these comments and will take them into consideration as we continue to consider future changes to the Star Ratings methodology. CAHPS and HOS measures are adjusted for case mix, and the Part D medication adherence measures will be adjusted for case mix beginning with the 2028 Star Ratings. Other measures are included in the CAI, as described at Sec. Sec. 422.166(f)(2) and 423.186(f)(2), which adjusts for within-contract performance differences associated with the percentages of beneficiaries that receive an LIS or are dual eligible or have disability status.

Comment: Several commenters stated that the historical reward factor embeds disparate quality standards that favor more resourced, healthier populations. A couple of commenters also stated that removing the HEI reward and adding back the historical reward factor would mask gaps in care and remove the focus on fixing such gaps.

Response: CMS appreciates these comments and will take them into consideration as we consider future changes to the Star Ratings methodology. CMS expects that plans will work to provide high quality care to all enrollees and address instances where a lower quality of care may be provided to certain groups of enrollees. CMS expects this regardless of the Star Ratings methodology and incentives. Plans remain responsible for meeting existing quality requirements and delivering appropriate care to all enrollees.

Comment: A commenter stated that without the HEI reward there is an unfair advantage for larger plans compared to smaller regional plans that results in perpetuating disparities and weakening incentives for plans that serve vulnerable populations.

Response: CMS appreciates these comments and will take them into consideration as we consider future changes to the Star Ratings methodology.

Comment: A couple of commenters stated that removing the HEI reward and adding back the reward factor is not consistent with the objective of shifting the Star Ratings toward outcome-based measures and away from operational incentives, because the reward factor is unrelated to improving clinical care, outcomes, or patient experience.

Response: CMS disagrees that the reward factor is unrelated to clinical care, outcomes, and patient experience. The reward factor incentivizes high, consistent performance across all measures included in the Star Ratings, including those focused on clinical care, outcomes, and patient experience. As we consider how to simplify and modify the methodology and refocus the measure set, we will continue to focus on how to incentivize improvements in clinical care, outcomes, and patient experience.

Comment: A commenter did not support adding back the historical reward factor, stating that it benefits a small subset of plans and does not recognize improvement because it is intended to only reward plans that have consistently high Star Ratings across multiple years. Another commenter

stated that the reward factor may distort ratings by making them less responsive to changes in quality.

Response: The reward factor is not based on multiple years of performance; it is based on consistent, high performance across measures in a single Star Ratings year. As such, the historical reward factor was in fact intended to incentivize improvement because plans must have high performance during the measurement year across the measure set in order to qualify.

Comment: A commenter stated that the only rationale provided for removing the HEI reward is that it aligns with our focus on exploring ways to simplify and modify the Star Ratings methodology. A few commenters stated that simplicity should not be the key factor in performance measure selection or come at the expense of meaningful measurement.

Response: Our rationale for removing the HEI reward, as stated in the Contract Year 2027 proposed rule, is to incentivize improvement efforts on clinical care, outcomes, and patient experience in line with our proposed changes to the measure set, rather than incentivizing improvement among certain populations. We also noted that we are exploring ways to simplify and modify the methodology, and we proposed to keep the methodology consistent for now while we conduct this exploration. Finally, as we explained in our responses to comments above, we are also being responsive to stakeholder feedback received over the past several years.

When we consider changes to the methodology and measure set, the key factors we consider are consistent with the guiding principles for making enhancements and updates to the Star Ratings we stated in the Medicare Program; Contract Year 2019 Policy and Technical Changes to the Medicare Advantage, Medicare Cost Plan, Medicare Fee-for-Service, the Medicare Prescription Drug Benefit Programs, and the PACE Program final rule at 83 FR 16521. The MA and Part D Star Ratings are designed to align with CMS's Quality Strategy and to fairly, accurately, and transparently reflect plan quality and beneficiary experience, using reliable data and consensus-based measures that are stable over time and largely within plans' control. The system is intended to support public accountability, informed beneficiary choice, and quality improvement while minimizing unintended consequences and incorporating meaningful stakeholder input.

In addition, the Star Ratings methodology has become more complex over time, prompting us to consider ways to simplify and modify the methodology to maintain statistical rigor while making the methodology easier to understand and implement. Simplifying the methodology may also improve how well the Star Ratings incentivize quality improvement.

Comment: A commenter opposed our proposal to not implement the HEI reward and add back the historical reward factor, stating that policies should support, not penalize, clinicians and plans serving high-risk populations and should encourage investment in primary care, care coordination, and community-based interventions.

Response: CMS appreciates these comments; however, the historical reward factor is an upside-only reward that encourages consistent, high performance across Star Ratings measures and does not penalize plans or clinicians. CMS expects that plans will invest in improving care for all enrollees regardless of the Star Ratings and QBPs, including among enrollees that may have higher needs, such as the populations included in the HEI reward. This expectation is appropriate and consistent with MA statutory and regulatory requirements under section 1852 of the Social Security Act (the Act) and implementing regulations at 42 CFR part 422. Under section 1852(a)(1)(A) of the Act and Sec. 422.101(a), MA organizations must furnish, with limited exceptions all Medicare- covered benefits to enrollees. Section 1852(e) of the Act and Sec. 422.152 further require MA organizations to maintain ongoing quality improvement programs designed to improve the quality of care provided to all enrollees, while section 1852(d) of the Act and Sec. 422.112 require that Medicare organizations offering network-based coordinated care plans ensure that covered services are available and accessible to each enrolled individual with reasonable promptness and continuity of care. Collectively, these provisions establish that MA organizations must ensure equitable access to high-quality care for all enrollees, including dually eligible, low-income, and disabled beneficiaries.

After consideration of the public comments we received and for the reasons outlined in the Contract Year 2027 proposed rule and our responses to comments, we are removing the paragraphs at Sec. Sec. 422.166(f)(3) and 423.186(f)(3) and modifying Sec. Sec. 422.166(f)(1) and 423.186(f)(1) to remove “Through the 2026 Star Ratings.”

E. Plan Preview of Star Ratings (Sec. Sec. 422.166(h)(2) and 423.186(h)(2))

We proposed to add additional information about the data available to MA organizations and Part D sponsors during the plan preview periods before each Star Ratings release described at Sec. Sec. 422.166(h)(2) and 423.186(h)(2). During the first plan preview, CMS expects Part C and D sponsors to closely review the methodology and their posted numeric data for each measure in HPMS prior to display on MPF. The second plan preview provides an opportunity for Part C and D sponsors to review any updates from the first plan preview and preliminary Star Ratings for each measure, domain, summary rating, and overall rating. When the Star Ratings methodology was first codified in the Contract Year 2019 final rule, we anticipated that the plan preview periods would continue to evolve and it was not necessary to codify the specific display content. As the plan previews have continued to evolve, CMS has added de-identified contract-level sample data for one of each type of measure needed for MA organizations and Part D sponsors to replicate the calculation of the measure-level cut points (that is, one 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). These data allow MA organizations and Part D sponsors to validate CMS's cut point calculations. The same cut point programming is used for all other measures as the sample measures, so de-identified contract-level data for only the sample measures are displayed in HPMS during the second plan preview. We proposed to codify our current practice of providing sample data for one of each type of measure during the second plan preview described at Sec. Sec. 422.166(h)(2) and 423.186(h)(2).

We solicited comment on this proposal. In this section, we summarize the comments we received and provide our responses and final decisions.

Comment: A majority of commenters expressed support for CMS's proposal to codify its current practice of providing sample data during the plan preview periods. Some commenters stated that increased transparency will help plans more accurately review, validate, and understand their Star Ratings calculations, ultimately improving the integrity of Star Ratings and leading to improved quality assurance and better outcomes for beneficiaries.

Response: CMS appreciates the support for the proposed codification of

our current practice of providing sample data for one measure of each type during the second plan preview period. CMS agrees this approach aligns with our goals of promoting accountability, improving the integrity of Star Ratings, and leading to better outcomes for beneficiaries.

Comment: Several commenters recommended CMS expand the current practice of providing sample data for one of each measure type by providing sample data for all measures. They stated that without full access to the underlying data for all measures, plans cannot fully validate CMS's methodologies and calculations. Another commenter noted that much of the data already exists and asked that CMS provide a list on the HPMS Star Ratings website of all data sets available to plans and where to obtain them.

Response: As stated in the Contract Year 2027 proposed rule, CMS provides de-identified contract-level sample data for one measure of each type so MA organizations and Part D sponsors can replicate calculation of the measure-level cut points. Because the same cut point programming is used for all measures of the same type, only de- identified contract-level data for the sample measures are needed to validate CMS's cut point methodology. Adding de-identified contract- level data for all measures would be burdensome to implement, and data provided during the plan preview are preliminary. The purpose of the plan preview is for Part C and D sponsors to closely review their own Star Ratings data, including preliminary Star Rating assignments. Contracts are not entitled to review other contracts' preliminary Star Ratings data before they are public. Adding a list of all data sets available to plans and where to obtain them may be easier to implement and CMS will take this suggestion under consideration as a future enhancement.

After consideration of the public comments we received and for the reasons outlined in the Contract Year 2027 proposed rule and our responses to comments, we are finalizing Sec. Sec. 422.166(h)(2) and 423.186(h)(2) as proposed without modification.

Simulations of the impact of removing the HEI reward, keeping the historical reward factor, and removing the 12 measures as proposed in section V.B. of the Contract Year 2027 proposed rule, using data from the 2025 Star Ratings (2022 and 2023 measurement years) but updating the measure set and measure weights for changes consistent with the 2026 Star Ratings (for example, reducing the weight of patient experience/complaints and access measures from 4 to 2) show most contracts (62 percent) would have no change in the overall rating. The overall rating would increase by a half star for 13 percent of contracts, would decrease by a half star for 25 percent of contracts, and would decrease by one star for one contract. Five percent of contracts would gain QBPs, and four percent of contracts would lose QBPs.

As described in this final rule, we are adding and removing certain Star Ratings measures. The new measure entails moving an existing measure from the display page to Star Ratings, which would have no impact on plan burden. The measures being removed are either calculated from administrative data \105\ or would still be submitted by plan sponsors and, as such, there would be no decrease in plan burden. The finalized provisions would not change any respondent requirements or burden pertaining to any of CMS's Star Ratings related PRA packages, including: OMB control number 0938-0732 for CAHPS (CMS-R-246), OMB control number 0938-1028 for HEDIS (CMS-10219), and OMB control number 0938-1054 for Part C Reporting Requirements (CMS-10261). Since the provisions would not impose any new or revised information collection requirements or burden, we are not making changes under any of the aforementioned control numbers.

\105\ The following measures proposed for removal are calculated from administrative data: Plan Makes Timely Decisions about Appeals, Reviewing Appeals Decisions, Complaints about the Health/Drug Plan, Medicare Plan Finder Price Accuracy, Members Choosing to Leave the Plan.

We solicited feedback on the impact of these proposed changes.

Comment: A commenter requested that CMS conduct an impact analysis that separates out SNP from non-SNP plans. The commenter also requested an analysis broken out by region and size of enrollment. The commenter stated that these analyses would ensure that the proposed changes do not inadvertently harm vulnerable populations.

Response: In the tables below, we break out the impacts for MA contracts by SNP-only contracts, partial SNP contracts (those with both SNP and non-SNP plans), and non-SNP contracts and by contract enrollment size. These tables show the impacts of the changes finalized in this final rule (i.e., removing 11 measures as finalized in section V.B. of this final rule, removing the HEI reward, and keeping the historical reward factor). We do not provide a breakout of the impacts by region because some contracts have broad service areas. [GRAPHIC] [TIFF OMITTED] TR06AP26.034

[GRAPHIC] [TIFF OMITTED] TR06AP26.035

After consideration of the public comments we received, and for the reasons outlined in the Contract Year 2027 proposed rule and our responses to comments, we are finalizing all Star Ratings proposals from the Contract Year 2027 proposed rule, except for the removal of the Diabetes Care--Eye Exam (Part C) measure. The impact of the finalized changes based on the simulations using data from the 2025 Star Ratings and accounting for changes implemented in the 2026 Star Ratings, as explained at the beginning of this section, show most contracts (63 percent) would have no change in their overall rating. The overall rating would increase by a half star for 13 percent of contracts, and would decrease by a half star for 24 percent of contracts. Four percent of contracts would gain QBPs, and three percent of contracts would lose QBPs.

G. Contract Consolidations (Sec. Sec. 422.162(b)(3) and 423.182(b)(3))

In the Medicare and Medicaid Programs; Contract Year 2026 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, Medicare Cost Plan Program, and Programs of All-Inclusive Care for the Elderly proposed rule, which appeared in the Federal Register on December 10, 2024, we proposed a technical clarification of existing policy at Sec. 422.162(b)(3)(iv)(A)(2) and (B)(2) and Sec. 423.182(b)(3)(ii)(A)(2) and (B)(2) to provide details about how the enrollment-weighted measure score is calculated when a consumed or surviving contract is missing data for a measure. In the first year of the consolidation when a measure score for a consumed or surviving contract is missing as a result of not having enough data to meet the measure technical specification or for a CAHPS measure having reliability less than 0.6, CMS proposed to treat this measure score as missing in the calculation of the enrollment-weighted measure score. Similarly, in the second year of the consolidation for all measures, except HEDIS, HOS, CAHPS, and call center measures, when a measure score for a consumed or surviving contract is missing as a result of not having enough data to meet the measure technical specification, CMS proposed to treat this measure score as missing in the calculation of the enrollment-weighted measure score. For Sec. 423.182(b)(3)(ii)(A)(2) and (B)(2) we also removed reference to Sec. 423.184(g)(1)(ii) since it was reserved in the Medicare Program; Changes to the Medicare Advantage and the Medicare Prescription Drug Benefit Program for Contract Year 2024--Remaining Provisions and Contract Year 2025 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, Medicare Cost Plan Program, and Programs of All-Inclusive Care for the Elderly (PACE) final rule (pages 30639- 30642).

We solicited comment on this proposal.

Comment: A couple commenters supported this technical clarification, noting that it is consistent with other similar approaches for calculations and will help prevent gaming. No commenters opposed the clarification.

Response: We thank these commenters for their support.

Comment: A commenter encouraged CMS to continue to take a uniform and consistent approach to data standards for contract consolidations.

Response: We thank this commenter for their support of a uniform and consistent approach to data standards for consolidations and find that the current methodology for consolidations and the proposed technical clarification align with this approach.

Comment: A commenter requested clarification that CMS will exclude missing data from the weighted average calculation, noting that some software will give missing values as the final output when missing data are included in calculations.

Response: CMS confirms that missing data would be excluded consistent with the proposed technical clarification.

Comment: A commenter requested CMS assess potential impacts and confirm the clarification accurately reflects plan performance and quality of care for impacted populations.

Response: Excluding missing data from the calculation of measure scores for the surviving contracts of consolidations for measures with low reliability or that do not have enough data to meet the measure technical specifications more accurately reflects plan performance and the quality of care provided.

After consideration of the comments we received and for the reasons outlined in the Contract Year 2026 proposed rule and our responses to comments, we are finalizing the technical clarification at Sec. Sec. 422.162(b)(3) and 423.182(b)(3). As this is a technical clarification, CMS is applying it immediately on the effective date of the final rule and to the 2027 Star Ratings.

Congress first authorized special needs plans (SNP) through the enactment of the Medicare Prescription Drug, Improvement, and Modernization

Act of 2003 (Pub. L. 108-173). The law authorized CMS to contract with Medicare Advantage (MA) coordinated care plans that are specifically designed to provide targeted care to individuals with special needs. Section 1859(f)(5)(A) of the Act, as added by section 164 of the Medicare Improvements for Patients and Providers Act (Pub. L. 110-275), imposes specific care management requirements for all SNPs effective January 1, 2010. As a result, all SNPs are required to implement care management requirements which have two explicit components: a National Committee for Quality Assurance (NCQA) approved, evidence-based model of care (MOC) and a series of care management services.\106\

\106\ For more discussion of the history of SNPs, please see Chapter 16B of the Medicare Managed Care Manual (MMCM).

All SNPs must submit their MOCs to CMS for NCQA evaluation and approval and an MA organization sponsoring multiple SNPs must develop a separate MOC to meet the needs of the targeted population for each SNP type it offers as required at Sec. Sec. 422.4(a)(1)(iv), 422.101(f)(3)(i), and 422.152(g). The NCQA MOC evaluation and approval process scores each of the clinical and non-clinical elements of the MOC. The Institutional Special Needs Plan (I-SNPs) and Dual-Eligible Special Needs Plan (D-SNPs) MOCs that receive a passing score from NCQA are then approved for one-, two-, or three-year periods as set forth at Sec. 422.101(f)(3)(iii). A Chronic Condition Special Needs Plan (C- SNP) MOC that receives a passing score is approved for one year as required by section 1859(f)(5)(B)(iv) of the Act. As the MOC approval periods end, SNPs submit new MOCs to CMS for NCQA evaluation and approval during an annual renewal MOC submission window. This ensures that all operating SNPs have a current, NCQA approved, MOC in place.

CMS has acknowledged in the past that to more effectively address the specific needs of its enrollees, a SNP may need to modify its processes and strategies for providing care during its approved MOC timeframe. A SNP that seeks to revise a MOC before the end of the MOC approval period may do so between June 1st and November 30th of each calendar year via the “off-cycle MOC submission process” outlined at Sec. 422.101(f)(3)(iv). A D-SNP or I-SNP that decides to make revisions to their existing approved MOC may submit a summary of their off-cycle MOC changes, along with the red-lined MOC, in the Health Plan Management System (HPMS) Model of Care module for NCQA review and approval. The off-cycle submission requirements apply to substantial changes in policies or procedures as described at Sec. 422.101(f)(3)(iv)(B)(1) and other revisions identified at Sec. 422.101(f)(3)(iv)(B)(2) to (5). These types of MOC changes are at the discretion of the applicable MA organization offering the SNP, and it is the responsibility of the MA organization to notify CMS of revisions and electronically submit their summary of changes to their MOC in HPMS for review and approval.

Since the beginning of the MOC approval process, CMS has developed, issued, and updated guidance on the MOC to support plan performance and assist in improved health outcomes. CMS had previously required initial and renewal MOCs to be submitted mid-February of the preceding plan contract year, aligning with the MA application deadline. However, as announced in an HPMS email titled “Contract Year 2027 Model of Care Submission Timeline Updates” on September 3, 2025, CMS has moved the initial and renewal MOC submission deadline to the Friday before the first Monday of June, starting with the contract year (CY) 2027 MOC submission period. The new MOC submission deadline and subsequent NCQA evaluation overlap with the current off-cycle MOC submission window. To accommodate the CY 2027 MOC submission deadline change and ensuing operational considerations both for NCQA and CMS's HPMS, a new timeline for the off-cycle submission process is needed. As such, CMS proposed that for CY 2027 and subsequent years, D-SNPs and I-SNPs seeking to revise their NCQA-approved MOC during the MOC approval period must submit updates and corrections between January 1st and March 31st and October 1st and December 31st of each calendar year. This will functionally provide SNPs with two separate windows of opportunity to submit off-cycle MOC changes each year. Of note, SNPs currently have a six-month window to update or correct their MOCs; this new proposed timeline will split that period to accommodate the operational needs of CMS and NCQA as staff review initial and annual MOC submissions.

CMS expects there will be no change in the estimated burden from this changed timeline for SNPs submitting off-cycle MOC changes. Additionally, there will be no new collection of information for this rule, only maintenance of past expectations around the off-cycle MOC process.

CMS invited public comment on this proposal and received several comments in support. CMS received no comments opposing this proposal, but several commentors offered support with suggested modifications. The comments and responses are as follows:

Comment: Several commenters supported CMS' proposed change, but requested CMS continue to look at greater alignment with state Medicaid contracting windows where possible.

Response: CMS appreciates the commenters' support of this proposed change and agrees that the timing of MOC deadlines should align with state Medicaid contracting windows when possible. The shift in timing of the annual renewal and initial MOC submission process reflects feedback CMS has received over the years from plans and state Medicaid agencies. In some instances, CMS is restricted by the operational practicalities related to NCQA's review and approval of SNP MOCs in relation to finalizing all MA plan requirements for the upcoming contract year. However, CMS will continue to review the MOC submission process and its impact on plans and state partners.

Comment: Several commenters supported the proposal but suggested keeping the SNP MOC submission portal open year-round to give SNPs more time to make corrections and submit changes. They noted that this is particularly necessary when there are significant policy changes or mandates made at the state level. Commenters stated that an enhanced open portal timing would further reduce burden since plans are prohibited from making care management and some operational changes until NCQA has approved the SNP's off-cycle MOC submission. Another noted that the window should remain open from October 1st to March 31st of the next contract year.

Response: CMS appreciates the commenter's concerns and have taken plan burden into consideration when developing this proposal. As noted in the previous comment response, however, CMS is limited by operational considerations specific to NCQA's review process in relation to finalizing all MA plan requirements for the upcoming contract year. While this proposal represents the best balance of all these considerations, CMS will continue to review the MOC review process for future refinement opportunities.

Regarding the potential extension of the off-cycle window from October 1st to March 31st of the next contract year, this proposal is essentially providing the opportunity the commenter is

seeking. The text of the proposal is written to align with current regulatory practices in mind as many of our current regulations are consistent with a contract year framework, which is why CMS framed the proposal around two separate portions of the same contract year.

After reviewing and responding to all comments, CMS is finalizing revisions to Sec. 422.101(f)(3)(iv)(B) and (G) without modification.