The final rule for the 2027 Medicare Part C, Part D, and cost plan programs: Highlights for medication management and quality programs
On April 6, 2026, the Centers for Medicare & Medicaid Services (CMS) released the final rule for the 2027 Medicare Part C, Part D, and cost plan programs. The rule touches Star Ratings methodology, Part D benefit structure, opioid prescriber oversight, supplemental benefits, and more. Below, we highlight the provisions most relevant to medication management and quality program.
Inflation Reduction Act
In consistency with the changes from the Inflation Reduction Act (IRA), multiple language updates, both additions and revisions, were finalized and codified with this Rule.
Deductible:
For the Part D deductible, § 423.104(d)(1) was revised by adding language stating that the Part D deductible does not apply to Advisory Committee on Immunization Practices (ACIP)-recommended adult vaccines or covered insulin products, as defined in § 423.100.
Prescription Drug Coverage:
Language revisions were approved to maintain the historical knowledge of the “initial coverage limit” and “coverage gap” related to calendar years (CYs) prior to 2025 and establish the current requirements from CY 2025 and subsequent years. Key aspects that were affected include the following:
- Elimination of the initial coverage limit and the coverage gap phase of the Part D benefit.
- Termination of the Coverage Gap Discount Program, which has been replaced with the Manufacturer Discount Program.
- Codification of the definitions and regulations for the Manufacturer Discount Program.
- The Manufacturer Discount Program is where manufacturers pay discounts for applicable drugs when dispensed to Part D enrollees during the initial and catastrophic coverage phases. These discounts are initially advanced at point of sale by plan sponsors, and CMS provides prospective payments to plan sponsors to ensure they can advance these discounts. Manufacturers are invoiced quarterly.
- CMS codified a requirement for Part D bids to include assumptions regarding payable selected drug subsidy amounts.
- Limitations to the annual out-of-pocket (OOP) threshold
- The annual OOP was set at $2,000 for 2025, with the methodology for determining the annual OOP threshold for 2026 and each subsequent year would be the amount from the previous year, multiplied by the annual percentage increase, then rounding to the nearest multiple of $50. Once an enrollee’s incurred costs exceed the annual OOP threshold, they will enter the catastrophic phase where there is no cost sharing for Part D drugs.
- Adjustments to the definition of incurred costs related to calculating an enrollee’s true out-of-pocket (TrOOP) costs.
- The specialty-tier regulations regarding cost threshold and maximum allowable cost-sharing.
- The selected drug subsidy program, starting in CY 2026.
Low-Income Cost-sharing Subsidy:
The IRA expanded eligibility of the full low-income subsidy (LIS) to individuals with an income below 150 percent of the federal poverty level (FPL), meaning that individuals that previously qualified for partial LIS now qualify for full LIS. Full LIS provides assistance to individuals to pay full premiums and deductibles and reduce cost sharing. CMS finalized the amendment at § 423.782 to align with the IRA’s eligibility criteria.
Support Act of 2018: Opioid Prescriber Oversight
The SUPPORT Act addresses the identification and notification by the Secretary of Part D outlier prescribers of opioid medications. Outlier prescribers are defined as those in the top 25th percentile within their peer group (based on taxonomy and state) with regard to co-prescribing opioids and benzodiazepines and the average daily morphine milligram equivalent (MME) prescribed. The following beneficiaries are excluded from this calculation: those with cancer, sickle cell disease, hospice enrollment, or residence in a long-term care facility.
Prescribers subject to a current CMS or Health and Human Services (HHS) Office of Inspector General investigation are also excluded. Persistent outliers are defined as those identified in three consecutive CMS notifications based on the same methodology.
CMS finalized the addition of the following provisions related to opioid prescribers:
- Outlier prescriber of opioids means a prescriber who is a statistical outlier compared to their peers in a specialty and geographic area.
- Specialty is determined by taxonomy, and geographic area is determined by state of practice.
- CMS will identify and send notifications to outlier prescribers of opioids.
- Persistent outlier prescriber of opioids means an outlier prescriber identified by CMS in three consecutive outlier prescriber notifications.
- CMS will provide information to all Part D plan sponsors on persistent outlier prescribers of opioids at least annually.
Cannabis Products & SSBCI Eligibility
Per the regulations, cannabis products are illegal substances per federal law and are not allowable Special Supplemental Benefits for the Chronically Ill (SSBCI); however, hemp products are excluded from the definition of marijuana within the Controlled Substances Act (CSA). The definition of hemp was recently amended by the Continuing Appropriations, Agriculture, Legislative Branch, Military Construction and Veterans Affairs, and Extensions Act of 2026 and, and this definition took effect on November 12, 2026.
CMS finalized the amendment at § 422.102(f)(1)(iii)(G) to state that cannabis products that are illegal under applicable State or Federal law, including the Federal Food, Drug, and Cosmetic Act (FFDCA), are not allowable as SSBCI. This allows Medicare Advantage (MA) programs to offer hulled hemp seed, hemp seed protein powder, and hemp seed oil as SSBCI, while excluding illegal cannabis products as SSBCI per state law, regardless of federal legal status.
Risk Adjustment Data
CMS finalized the proposals to remove the specific uses of MA risk adjustment data at § 422.310(f)(1) and the specific external parties to whom data can be released at § 422.310(f)(2). Data released will still coincide with Federal laws and CMS data sharing procedures.
Notice of Availability
The Notice of Availability of language assistance services and auxiliary aids and services (NoA) material, formerly known as the Multi-Language Insert (MLI), was implemented with the April 2024 Final Rule. CMS’s requirements for the NoA are largely duplicative of those from the Health and Human Services Office for Civil Rights (OCR). However, some nuances exist – for example, CMS’s requirement to include the NoA in all CMS required materials versus the less specific language from the OCR. CMS finalized the removal of CMS’s NoA requirement, which will defer oversight and management to the OCR.
Special Supplemental Benefits for the Chronically Ill (SSBCI)
Special Supplemental Benefits for the Chronically Ill (SSBCI) may be offered by MA plans for enrollees that meet the statutory definition of “chronically ill enrollee”. These are individuals who meet all of the following criteria defined in the Act:
- Has one or more comorbid and medically complex chronic conditions that is life-threatening or significantly limits the overall health or function of the enrollee.
- Has a high risk of hospitalization or other adverse health outcomes.
- Requires intensive care coordination.
Each SSBCI should also “have a reasonable expectation of improving or maintaining the health or overall function of the chronically ill enrollee.” Plans have flexibility in the methods they can use to determine if an enrollee meets the above criteria, but written policies must provide objective eligibility criteria. However, since there has been no requirement to publicly post these criteria, potential enrollees have been limited in what they are able to review to help determine what SSBCI are available to them.
CMS discovered a lack of consistency in applying SSBCI statutory requirements and proposed technical changes in the CY 2026 proposed rule to establish these expectations. Also, CMS proposed a requirement for MA plans to publish their objective SSBCI eligibility criteria on their public-facing website to provide transparency to their enrollees.
These proposals were finalized with this rule. Effective January 1, 2027, MA plans must publicly post their SSBCI eligibility criteria on their public-facing websites.
Updates to Part C and D Star Ratings
CMS has been planning to simplify the Star Ratings through reducing the number of measures and focusing the measure set on clinical care, outcomes, and patient experience. The 2027 Final Rule solidifies this strategy with multiple upcoming changes.
Firstly, CMS finalized the codification of additional language at §§422.164(e)(2), 422.164(e)(3), 423.184(e)(2), and 423.184(e)(3) of the Act without modification, effective immediately. These updates provide formal documentation on policies and procedures regarding measure removals.
- The language at §§422.164(e)(2) and 423.184(e)(2) states that the reasons and certain circumstances for removing measures quickly where it is appropriate and necessary, codified at §§422.164(e)(1) and 423.184(e)(1), will be communicated through announcement or proposed and finalized through rulemaking.
- The language at §§422.164(e)(3) and 423.184(e)(3) codifies that removal of measures for any other reasons not stated in at §§422.164(e)(1) and 423.184(e)(1) will be proposed and finalized through rulemaking.
For Star Rating removals, CMS targeted operational and administrative measures, as well as process and patient experience measures with high performance and low variability across contracts.
This announcement finalized the removal of these 10 measures:
- Beginning with the 2028 Star Ratings:
- Call Center – Foreign Language Interpreter and TTY Availability (Part C)
- Call Center – Foreign Language Interpreter and TTY Availability (Part D)
- Beginning with the 2029 Star Ratings:
- Plan Makes Timely Decisions about Appeals (Part C)
- Reviewing Appeals Decisions (Part C)
- Special Needs Plan (SNP) Care Management (Part C)
- Complaints about the Health/Drug Plan (Part C and D)
- Medicare Plan Finder (MPF) Price Accuracy (Part D)
- Members Choosing to Leave the Plan (Part C and D)
- Customer Service (Part C)
- Rating of Health Care Quality (Part C)
CMS also finalized the removal of the Statin Therapy for Patients with Cardiovascular Disease (SPC) Part C measure beginning with the 2028 Star Ratings. This measure will be on the display page starting in 2028 due to the substantive change to the age qualifications, removing the current calendar year 2026 as a measurement year.
The Diabetes Care – Eye Exam Part C measure had been considered for removal but based on comments received by CMS opposing this change and supporting its place in comprehensive diabetes care, this measure has been retained for now.
CMS also finalized the addition of one new single-weighted Part C measure, Depression Screening and Follow-Up, for the 2029 Star Ratings. This is consistent with the CMS initiative to increase emphasis on clinical care and outcomes and fills a gap in behavioral health measures in the Star Ratings. This means that 2027 will be a measurement year towards the 2029 Star Rating, and that preparing, implementing, and refining initiatives through the remainder of 2026 into 2027 will be critical for plans to perform well.
The Final Rule furthermore states that the historical reward factor will continue to be used, meaning that Health Equity Index (HEI) reward, also known as the Excellent Health Outcomes for All (EHO4all) reward, from the 2024 Final Rule will not be implemented for 2027. A key rationale for this decision is consistent with CMS’s overall strategy to focus on clinical care, outcomes, and patient experience and incentivize efforts within these versus certain population subsets (dually eligible, recipients of low-income subsidy (LIS), and disability). Per simulations, CMS expects that 2027 overall ratings would have no change for 63% of contracts, with 4% of contracts gaining quality bonus payments (QBPs) and 3% losing QBPs.
Lastly, CMS has finalized the technical clarifications on contract consolidations at §§ 422.162(b)(3) and 423.182(b)(3), effective immediately. In the first year of consolidation, measure scores will be treated as missing in the calculation of an enrollment-weighted measure score if the score for a consumed or surviving contract is missing as a result of not having enough data to meet the technical specifications or for a CAHPS (Consumer Assessment of Healthcare Providers and Systems) measure having reliability less than 0.6. In the second year of consolidation, measure scores for all measures except HEDIS (Healthcare Effectiveness Data and Information Set), HOS (Health Outcomes Survey), CAHPS, and call center will be considered missing if the score for a consumed or surviving contract is missing as a result of not having enough data to meet the technical specification.
Also, for the 2027 Star Ratings, CMS will begin to use data collected through the Part C Reporting requirements to confirm completeness of the IRE data used in the calculation of the Plan Makes Timely Decisions about Appeals and Reviewing Appeals Decisions measures, and will change the calculation regarding the Categorical Adjustment Index when there is a contract consolidation. The percentage of low-income subsidy (LIS)/dual eligible (DE) enrollees and disables enrollees from the surviving contract will be determined for the first two years following consolidating by combining the enrollment data for the month of December for the measurement period of the Star Ratings across all contracts in the consolidation.
As previously announced, the 2027 Star Ratings Measures and Weights  are as follows:
* Removed beginning with the 2029 Star Ratings / 2027 Measurement Year
** New measure/first year Star Rating; 2027 is a measurement year
| Part | Measure | Weight | |||
| C | Breast Cancer Screening | 1 | |||
| C | Colorectal Cancer Screening | 1 | |||
| C | Annual Flu Vaccine | 1 | |||
| C | Improving or Maintaining Physical Health | 3 | |||
| C | Improving or Maintaining Mental Health | 3 | |||
| C | Monitoring Physical Activity | 1 | |||
| C | Special Needs Plan (SNP) Care Management* | 1 | |||
| C | Care for Older Adults – Medication Review | 1 | |||
| C | Care for Older Adults – Functional Status Assessment** | 1 | |||
| C | Osteoporosis Management in Women who had a Fracture | 1 | |||
| C | Diabetes Care – Eye Exam | 1 | |||
| C | Diabetes Care – Blood Sugar Controlled | 3 | |||
| C | Kidney Health Evaluation for Patients with Diabetes | 1 | |||
| C | Controlling Blood Pressure | 3 | |||
| C | Reducing the Risk of Falling | 1 | |||
| C | Improving Bladder Control | 1 | |||
| C | Plan All-Cause Readmissions | 3 | |||
| C | Statin Therapy for Patients with Cardiovascular Disease* | 1 | |||
| C | Transitions of Care | 1 | |||
| C | Follow-up after Emergency Room Visit for People with Multiple High-Risk Chronic Conditions | 1 | |||
| C | Getting Needed Care | 2 | |||
| C | Getting Appointments and Care Quickly | 2 | |||
| C | Customer Service* | 2 | |||
| C | Rating of Health Care Quality* | 2 | |||
| C | Rating of Health Plan | 2 | |||
| C | Care Coordination | 2 | |||
| C & D | Complaints about the Health Plan* | 2 | |||
| C & D | Members Choosing to Leave the Plan* | 2 | |||
| C | Health Plan Quality Improvement | 5 | |||
| C | Plan Making Timely Decisions about Appeals* | 2 | |||
| C | Reviewing Appeals Decisions* | 2 | |||
| C & D | Call Center – Foreign Language Interpreter and TTY Availability* | 2Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â | |||
| D | Drug Plan Quality Improvement | 5 | |||
| D | Rating of Drug Plan | 2 | |||
| D | Getting Needed Prescription Drugs | 2 | |||
| D | MPF Price Accuracy* | 1 | |||
| D | Medication Adherence for Diabetes Medications | 3 | |||
| D | Medication Adherence for Hypertension (RAS Antagonists) | 3 | |||
| D | Medication Adherence for Cholesterol (Statins) | 3 | |||
| D | Statin Use in Persons with Diabetes | 1 | |||
| D | Concurrent Use of Opioids and Benzodiazepines (COB)** | 1 | |||
| D | Polypharmacy: Use of Multiple Anticholinergic Medications in Older Adults (Poly-ACH)** | 1 |
Note: 2027 is a measurement year, but not a Star Rating Year, for the new Part C measure Depression Screening and Follow-Up.
Three measures were removed beginning with the 2027 Star Ratings:
- Care for Older Adults – Pain Assessment
- Medication Reconciliation Post-Discharge
- The Transitions of Care Part C measure does include Medication Reconciliation Post-Discharge in the rates used to determine the average.
- MTM Program Completion Rate for CMR
- This measure will return for the 2029 Star Ratings, making 2027 a measurement year.
Model of Care (MOC): Off-Cycle Submission Window Changes
Special needs plans (SNPs) are required to have a National Committee for Quality Assurance (NCQA) approved, evidence-based model of care (MOC) and a series of care management services. Each MOC is submitted to CMS for NCQA evaluation and approval. Currently, SNPs may utilize the off-cycle MOC submission process between June 1 and November 30 of each year to seek revisions to their processes and strategies. CMS previously announced that starting with contract year 2027, the initial and renewal MOC submission deadline has been moved to the Friday before the first Monday of June.
Subsequently, the proposal to adjust the off-cycle submission process to split periods of January 1 to March 31 and October 1 to December 31 of each calendar year has been finalized to accommodate these changes.
Passive Enrollment for Dually Eligible Enrollees
Integrated dually eligible special needs plans (D-SNPs) combine Medicare and Medicaid services and administrative processes, which eases burden for these enrollees and improves coordination of care. But disruptions in coverage may occur, prompting CMS to change regulations in the April 2018 final rule to allow for passive enrollment for full-benefit dually eligible enrollees from a non-renewing integrated D-SNP into another comparable plan in an attempt to ensure continuity of care. However, there have been difficulties with provider networks and facility networks not being substantially similar between relinquishing and prospective receiving plans. CMS proposed amending the regulations by removing the substantially similar network requirements and instead requiring receiving plans to provide continuity of care for all incoming enrollees for a minimum of 120 days and have the care coordinator staffing capacity to receive passively enrolled enrollees. These amendments were finalized with this rule.
Continuity in Enrollment for Full-Benefit Dually Eligible Individuals
The April 2024 final rule finalized multiple requirements, starting in contract year 2027, regarding full-benefit dually eligible individuals enrolling in MA organizations, their parent organizations, or entities that share a parent organization with the MA organization, that offer a D-SNP. Since codification, CMS has received feedback on challenges with implementation for states without mandatory Medicaid managed care for the dually eligible population. CMS proposed multiple changes that were finalized with this rule with some modifications.
Key points to highlight:
- SMACs must include language allowing enrollment of full-benefit dually eligible individuals into the D-SNP.
- SMACs must stipulate that full-benefit dually eligible individuals cannot be enrolled in a Medicaid MCO that is owned and controlled by an entity other than the MA organization, its parent organization, or an entity that shares a parent organization with the MA organization.
- Such exceptions are available to a highly integrating dual eligible (HIDE) SNP and a coordination-only D-SNP that operates in a state where the State Medicaid agency does not mandate enrollment in Medicaid managed care for all full-benefit dually eligible individuals. This removed the proposed majority requirement.
- A MA organization, its parent organization, or an entity that shares a parent organization with the MA organization may offer one or more additional D-SNPs for full-benefit dually eligible individuals who are enrolled in Medicaid Fee-for-Service (FFS).
D-SNP Contract Modifications Following State Medicaid Agency Contract Termination
MA organizations with terminating SMACs are not currently required to seek a mutual termination of its MA contract with CMS. CMS finalized the addition of language to establish that CMS may immediately terminate a contract if the MA organization is no longer eligible to offer a D-SNP because the MA organization does not hold a contract with the State Medicaid agency.
Annual Health Equity Analysis of Utilization Management: Requirement Rescinded
CMS implemented health equity requirements from the 2024 Final Rule, which included a requirement to include an expert on health equity on the utilization management (UM) committee, additional data collection, and the public posting of an annual health equity analysis. However, CMS’s position on these requirements’ rationale, feasibility, and administrative burden has changed, so this rule finalized the removal of the requirements at §422.137(d)(5) for a health equity expert, (6) for an annual health equity analysis for the user of prioritization, and (7) for a posted publicly accessible health equity analysis.
Quality Improvement Program Health Disparities Requirement: Rescinded
The 2023 Final Rule added a requirement at §422.152(a)(5) that directs MA organizations to integrate one or more activities that reduce disparities in health and health care within their quality improvement program. However, consistent with the executive orders from January 2025, CMS finalized elimination of the requirements from § 422.152(a)(5) to incorporate one or more activities that reduce disparities in health and health care.
How Can Clarest Provide Support?
With significant updates to the Medicare Program, 2027 will demand that plans do more with less. It will require a shift from volume to value, anchored by data accuracy and direct member engagement. Your ClarestPath Team is prepared to help you navigate and manage immediate and future changes.
- Driving Quality Measure Performance: All Star measures are critical for success, but highly weighted and clinically focused Star measures are the key driving factors moving forward. This includes medication adherence, concurrent use of high-risk medications, and more. Process measures are on their way out, removing those additional points that helped drive up ratings, making the remaining measures even more critical to improve and maintain high performance. ClarestPath through our clinical programs and highly skilled clinical staff provide high-touch and patient-centric solutions to directly and positively impact measure performance and optimize medication utilization on both individual and population levels.
- Data Integrity: Our platform provides a holistic view of a patient’s medication regimen and continuous monitoring for potential medication and disease management issues, bridging the gap between what is prescribed, what is taken, and how effective the current treatment plan is in managing each individual patient’s healthcare concerns.
- Money on the Mind: With the Part D coverage gap eliminated and the catastrophic phase leaving patients with $0 cost sharing, health plans may end up responsible for additional medication costs. Our platform can facilitate data analyses on your population’s medication utilization and support formulary and benefit management initiatives to ensure that patients are using the most cost-effective and clinically appropriate medications.
Let’s connect to explore how our clinical programs can protect your ratings and optimize your medication management strategy.
Source: Federal Register, Vol. 91, No. 65, April 6, 2026.