Insights

On April 6, 2026, the Centers for Medicare & Medicaid Services (CMS) published its final rule governing the Medicare Advantage (Part C) and Prescription Drug Benefit (Part D) programs for Contract Year (CY) 2027. The final rule is effective June 1, 2026, with most provisions applicable to coverage beginning January 1, 2027, and marketing and communications changes taking effect October 1, 2026. Beyond payment, the rule pursues a broad deregulatory agenda aligned with Executive Order 14192, reversing marketing and enrollment safeguards introduced in 2023 and easing documentation and reporting obligations, while introducing new program integrity requirements.

On April 6, 2026, the Centers for Medicare and Medicaid Services (CMS) circulated the Announcement of Calendar Year (CY) 2027 Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies (the CY 2027 Rate Announcement) to communicate Medicare Advantage (MA) capitation rates and Parts C and D payment policies. The Rate Announcement announces decisions regarding proposals initially published on January 26, 2026, in CMS’s CY 2027 Advance Notice for MA and Part D. The following is a summary of the most significant issues in the Rate Announcement, with further details below: 

On March 20, 2026, the Centers for Medicare and Medicaid Services (CMS) released new guidance outlining the agency’s audit methods and instructions for Medicare Advantage (MA) plans subject to upcoming risk adjustment data validation (RADV) audits for payment year (PY) 2020. In addition to providing necessary context for MA plans selected for auditing, this resource clarifies CMS’s methodological and procedural expectations. While the high-level takeaways are recapped below for convenience, we strongly recommend that MA organizations selected for PY 2020 audits closely review the guidance to understand what may be involved — or required — during the agency’s review.

By the end of 2025, 16 drug manufacturers had voluntarily negotiated and executed agreements to adopt Most Favored Nation (MFN) pricing for certain high-cost drugs. The Trump Administration highlighted the agreements in its “Great Healthcare Plan,” published on January 15, 2026, and communicated the government’s plans to “codify” such deals as a means of “get[ting] Americans the same low prices that people in other countries pay.” The Administration recently leveraged MFN pricing to establish the TrumpRx website, which helps uninsured or cash-paying consumers find drugs at a discounted price. The website reflects the Administration’s stated commitment to provide more lower-cost drugs directly to consumers. Currently, 40 branded medications are available at reduced prices.

On February 3, 2026, President Trump signed a $1.2 trillion spending deal that, among other points, introduced significant regulatory changes for Medicare Part D plans and PBMs providing services to PDP sponsors in the Medicare Advantage and Medicare Part D programs, and imposed significant new restrictions and transparency requirements on PBMs contracting with private group health plans.

On January 27, 2026, the Centers for Medicare and Medicaid Services (CMS) released a Health Plan Management System (HPMS) memo that provided a long-awaited update on how the agency plans to approach previously announced Risk Adjustment Data Validation (RADV) audits for Payment Years (PY) 2020-2024. The memo is the agency’s most comprehensive statement on the subject since September 25, 2025, when the Northern District of Texas vacated the 2023 RADV Final Rule. The memo makes clear that, while CMS has made certain operational adjustments in response to concerns expressed by Medicare Advantage Organizations (MAOs), the agency is largely pressing forward with the accelerated audit strategy announced in May 2025.

On January 26, 2026, the Centers for Medicare and Medicaid Services (CMS) circulated the Calendar Year (CY) 2027 Advance Notice to communicate proposed changes to Medicare Advantage (MA) capitation rates and Parts C and D payment policies.  The changes are expected to be finalized in April 2026 but may be delayed. The following is a summary of the most significant proposals, with further details below:

On November 26, 2025, the Centers for Medicare & Medicaid Services (CMS) published its Proposed Rule for the Medicare Program; Contract Year 2027 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, and Medicare Cost Plan Program (the “CY 2027 NPRM” or “proposed rule”) for public comment. In addition to outlining prospective policy and technical changes to Medicare Advantage (Part C), the Medicare Prescription Drug Benefit (Part D), and Medicare Cost Plan regulations, the proposals showcase the government’s plans to make comprehensive updates in response to statutory changes—notably the Inflation Reduction Act of 2022 (IRA)—as well as feedback from interested parties, and current federal deregulatory priorities.

On Friday, November 21, the Centers for Medicare & Medicaid Services (CMS) noticed its appeal of the Northern District of Texas’ decision in Humana Inc. et al. v. Becerra et al.

On September 25, 2025, the Northern District of Texas granted plaintiffs’ motion for summary judgment in Humana v. Becerra, vacating CMS’s 2023 Final Rule regarding risk adjustment data validation (RADV) audits. In the litigation, Humana challenged CMS’s decision in the Final Rule to not continue applying a Fee-for-Service (FFS) adjuster to its RADV audit methodology.

CMS is well underway in initiating and conducting its Risk Adjustment Data Validation (RADV) audits of Medicare Advantage (MA) organizations for PY 2019, and PY 2020 audit notices are likely to arrive by the end of September. The timing for subsequent PY audits is less clear, but notices will likely be coming soon given CMS’s announced plans to complete all remaining audits by early 2026, including all contracts for PY 2020 and beyond. This approach marks a significant deviation from the agency’s prior policy of reviewing only a fraction of contracts and at a much slower pace.