2026 Medicare Advantage Proposed rule

On November 26, 2024, CMS released the Contract Year (CY) 2026 Policy and Technical Changes to the Medicare Advantage (MA) Program, Medicare Prescription Drug Benefit Program (Part D), Medicare Cost Plan Program, and Programs of All-Inclusive Care for the Elderly (PACE) proposed. We have analysed the proposed rule for any and all changes related to the Star ratings.

Summary of Proposed Star Ratings Updates

New or Updated Measures:

• IET (Part C), IOP-LD (Part D), Breast Cancer Screening (Part C), Appeals Measures (Part C and D).

Other Updates:

• Removing Guardrails
• Improvement Measure: Clarification on how hold harmless provision would be applied for HEI reward calculation.
• Enrolment calculation for contract consolidations
• HEI Reward: Calculation updates for D-SNP transitions, I-SNP-specific clarifications, contract consolidations and HEDIS data discrepancy handling.

In-depth - MA 2026 proposed rule

Adding Measures

Initiation and Engagement of Substance Use Disorder Treatment (IET) (Part C)

• CMS proposes to add the IET measure beginning with the 2028 Star Ratings (2026 MY).
• The IET measure is a composite measure that averages two separate rates: Initiation of Substance Use Disorder Treatment and Engagement of Substance Use Disorder Treatment
• A contract must have scores on both rates to receive a score for this measure

Initial Opioid Prescribing for Long Duration (IOP-LD) (Part D)

• CMS proposes to add the IOP-LD measure for the 2028 Star Ratings (2026 MY) as it is an important measure to promote safer prescription opioid use
• The IOP-LD measure is a preventative-focused quality measure that addresses initial prescription opioid exposure to reduce the likelihood of long-term opioid use and reduce the risk of opioid overdose

Updating Measures

Breast Cancer Screening (Part C)

• As discussed in the CY 2025 Rate Announcement, CMS is proposing to expand the age range for the Breast Cancer Screening measure to women aged 40-49, for an updated age range of 40-74, for the 2027 and subsequent MY.
• The expanded age range for this screening measure significantly increases the size of the population covered by this measure and is therefore a substantive measure specification change.
• The legacy measure with the narrower age range of 50-74 years will remain available and used in Star Ratings until the updated measure has been on the display page for two years and has been adopted through rulemaking

Implementation Timeline:

• 2027 and 2028 Star Ratings: Updated measure will be available on the display page.
• 2029 Star Ratings: If finalized through rulemaking, the updated measure will replace the legacy measure.

Plan Makes Timely Decisions about Appeals (Part C) and Reviewing Appeals Decisions (Part C)

Eliminating the 5-day grace period for submission

• For purposes of defining and calculating timeliness, the IRE currently adds five calendar days to the timeframes listed above for all appeal file submissions.
• For example, the IRE currently considers a standard service case, without an extension, to be submitted timely if it is received within 35 calendar days of the valid request for reconsideration
• CMS is proposing to eliminate this 5-day period for all cases submitted electronically starting on January 1, 2025
• CMS says this change is justified due to the overwhelming majority of cases being submitted electronically. These changes are only in effect for electronic submissions. The timeliness of case files submitted by mail would continue to be subject to the 5-day grace period.

 Updating the IRE portal submission time

• The second update CMS is implementing starting January 1, 2025, is to use the electronic system receipt date and time as the date the appeal was received by the IRE, regardless of whether it is during the IRE’s business hours, for electronic submissions.
• Currently, the IRE uses the system receipt date as the date the appeal was received if it is during the IRE’s normal business hours. If the system receipt time or date is outside of the IRE’s normal business hours, the following business day is currently used as the receipt date

Implementation Timeline:

• Updated measure to begin with the  2028 Star rating (2026 MY)
• Legacy measure will remain in Star Ratings until the updated measure has been on display for two years.

Removing Guardrails

• CMS is considering to finalize the proposed removal of guardrails (bi-directional caps that restrict cutpoints movement by 5 points) when determining measure-specific thresholds for non- CAHPS measures
• This change will apply beginning 2028 Star rating (2026 MY)
• Reason for removal: CMS says that with the implementation of Tukey method, extreme outliers are removed before, which minimizes the need for guardrails to achieve predictability and stability of cut points. Additionally, the removal of guardrails would allow cut points to adjust when there are unanticipated changes in performance across the industry.

Improvement Measure (IM) Scores - Hold Harmless provision for HEI

• The improvement measure hold harmless for the highest rating will be determined based on the rounded rating before the addition of the HEI reward, if applicable.
• CMS says this is consistent with how the improvement measure hold harmless rules have historically been applied based on the rounded rating, and require that the HEI reward be added after the application of the improvement measures and before rounding to the nearest half star.
• CMS would determine the application of the improvement measures for the highest rating using the rating rounded to the nearest half star before the addition of the HEI reward, if applicable.
• Then when adding the HEI reward if applicable for the highest rating, CMS would go back to the unrounded rating either with or without the improvement measures, add the HEI reward, and then round to the nearest half star.
• Example of how hold harmless provision would apply:
  • If the highest rating rounded to the half star before the addition of the HEI reward is 4 stars or more without the use of the IM and with all applicable adjustments (CAI and the reward factor), a comparison of the highest rating with and without the IM is done. The higher rating is used for the rating.
  • If the highest rating rounded to the half star before the addition of the HEI reward is less than 4 stars without the use of the IM and with all applicable adjustments (CAI and the reward factor), the rating will be calculated with the IM.

Contract Consolidations

• 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 proposes to treat this measure score as missing in the calculation of the enrollment-weighted measure score.

Health Equity Index Reward

The Health Equity Index (HEI) reward will be implemented beginning with the 2027 Star Ratings (MY 2024 and 2025) that will be released in October 2026. CMS has proposed specific rules for HEI as follow:

Handling Contract Consolidations

• For consolidated contracts, the HEI reward will be calculated based on:
  • Combined enrollment of the surviving and consumed contracts using the most recent pre-consolidation data.
  • For example, if two contracts consolidate as of January 1, 2026, we would combine the enrollment of the surviving and consumed contracts when calculating the 2027 Star Ratings based on enrollment in the surviving and consumed contracts in 2025
• Starting with the 2027 Star Ratings, for the second year following a consolidation when calculating the HEI score for the surviving contract, the patient-level data used in calculating the HEI score is combined across the consumed and surviving contracts in the consolidation and used in calculating the HEI score.
• The enrollment used in assessing whether the surviving contract meets an enrollment threshold will be the combined enrollment from the consumed and surviving contracts from the most recent year of data used to calculate the HEI

D-SNP transition

• CMS explained how the HEI reward will be calculated for "legacy" MA contracts and the new state-mandated D-SNP-only contracts, starting with the 2029 Star Ratings.
• As when D-SNP PBPs are moved to state-mandated D-SNP-only contracts, legacy MA contracts may face challenges in qualifying for the HEI reward.
• CMS has developed a set of specific rules where Legacy contracts can qualify for HEI rewards if they meet enrollment thresholds and HEI performance criteria, either alone or combined with the new D-SNP-only contracts.

I-SNP specific clarification

• I-SNP contracts are exempt from certain measures (e.g., CAHPS, HOS), potentially preventing them from meeting the "half of measures" requirement.
• To clarify that starting with the 2027 Star Ratings, for I-SNP-only contracts to have the rating-specific HEI calculated, these contracts must have data for at least half the measures included in the rating-specific HEI for the subset of measures that I-SNP-only contracts are required to report

Rules impacting quality improvement indirectly

Medical Loss Ratio (MLR)

• CMS is proposing to establish clinical and quality improvement standards for provider incentives and bonus arrangements included in the MA MLR numerator
• They also want to prohibit administrative costs from being included in quality improvement activities in both the MA and Part D MLR numerator

BHA believes that proposed removal of guardrails and technical clarification to ho the improvement measure score hold harmless would be applied are the biggest two areas that would impact MA payers ability to reach or maintain a higher star rating.

 Reference: https://public-inspection.federalregister.gov/2024-27939.pdf

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