Regulatory NewsBREAK: CMS Issues Policy and Technical Changes Final Rule

On April 2, 2026, the Centers for Medicare and Medicaid Services (CMS) issued the 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 Final Rule. 

In the Final Rule, CMS is codifying the changes to the Part D benefit design and the payment obligations of enrollees, Part D plan sponsors, manufacturers, and CMS by the Inflation Reduction Act of 2022 (IRA), including: 

• making additional structural and operational changes to the types of payments that count as True Out-Of-Pocket costs (TrOOP);   
• establishing a policy for how an enrollee’s costs for drugs not subject to the standard deductible count towards eligibility for manufacturer discounts under the Medicare Part D Manufacturer Discount Program (Manufacturer Discount Program); 
• updating the methodology for reinsurance payments to Part D sponsors; and 
• implementing the Selected Drug Subsidy.  

The Final Rule also sunsets the Coverage Gap Discount Program and terminates all Coverage Gap Discount Program agreements as of January 1, 2025 and making conforming changes for clarity.     

The Final Rule codifies the Manufacturer Discount Program, which was established by the IRA to replace the Coverage Gap Discount Program and began on January 1, 2025. 

CMS is also finalizing changes to simplify Star Ratings, including changes to the measure set. CMS determined that it will not move forward with the implementation of the Health Equity Index and will continue to include the historical reward factor in the Star Ratings methodology.  

The Final Rule increases transparency and clarifies eligibility requirements for the Special Supplemental Benefits for the Chronically Ill (SSBCI). CMS is finalizing its proposed requirements for the administration of supplemental benefits through debit cards.

These regulations are effective June 1, 2026. 

More on This Topic:

• Final Rule
• Fact Sheet