The Centers for Medicare & Medicaid Services (CMS) recently released two updates related to Medicare Advantage and prescription drug (Part D) plans for Contract Year 2027:

• Medicare Advantage and Part D Policy and Technical Changes Final Rule: CMS finalized policies affecting Medicare Advantage, the Medicare Prescription Drug Benefit (Part D), and Medicare Cost Plan programs. The rule updates quality measures used for Star Ratings and codifies prescription drug coverage provisions from the Inflation Reduction Act, including eliminating the coverage gap phase, setting a lower annual out-of-pocket threshold, and removing cost sharing in the catastrophic phase. It also finalizes policies related to supplemental benefits, including those offered to chronically ill enrollees.
• CY 2027 Medicare Advantage and Part D Rate Announcement: CMS announced that finalized payment policies are projected to increase payments to Medicare Advantage plans by 2.48 percent, or more than $13 billion, in 2027. The update also includes changes to the Part D risk adjustment model to reflect Inflation Reduction Act changes to the Part D benefit. In 2025, 46 percent of Medicare beneficiaries living in non-metropolitan counties were enrolled in a Medicare Advantage plan.

The Centers for Medicare & Medicaid Services (CMS) announced an update to the Wasteful and Inappropriate Services Reduction (WISeR) Model, a six-year effort to reduce fraud, waste, and abuse in Medicare fee-for-service by using technology-enabled prior authorization for selected services.

CMS will delay prior authorization and pre-payment review for two services—deep brain stimulation for essential tremor and Parkinson’s disease, and percutaneous image-guided lumbar decompression for spinal stenosis—to allow more time for operational readiness. A new implementation date for these services will be announced in a future Federal Register notice.

April 2, 2026, the Centers for Medicare & Medicaid Services (CMS) issued the Hospice Wage Index and Payment Rate Update proposed rule for fiscal year (FY) 2027, which annually updates the Medicare hospice payment rate and the aggregate cap amounts paid to hospice providers.

For FY 2027, CMS proposes a 2.4% payment increase, an estimated $785 million in additional payments, and would raise the hospice cap to approximately $36,210 per beneficiary, an estimated 2.4% increase from FY 2026. The rule also updates the Hospice Quality Reporting Program, in which hospices that fail to submit the required data would receive a 4-percentage-point reduction, resulting in a net 1.6% payment reduction, and beginning FY 2028, CMS proposed adding a Medicare Care Compare icon for hospices that are non-compliant. Finally, the rule maintains the current wage index methodology while updating geographic classifications and while also strengthening oversight through new measures like the Service and Spending Variation Index (SSVI) and required election statement addenda. Comment by June 1.

This week, the Centers for Medicare & Medicaid Services (CMS) released a proposed rule for Medicare Skilled Nursing Facility Payment Rates for FY 2027.

The proposed rule indicates a 2.4 percent increase for non-rural SNFs and a 2.7 percent increase in payments for rural SNFs. In addition to payment updates, the rule proposes changes to the Skilled Nursing Facility Quality Reporting Program (QRP), including the removal of two COVID-19 vaccination measures, revised data submission deadlines to improve timeliness of public reporting, and a new requirement to submit Minimum Data Set (MDS) data on all residents receiving skilled care, regardless of payer. The proposal also includes updates to the Skilled Nursing Facility Value-Based Purchasing (VBP) Program, which withholds 2% of SNF payments and redistributes a portion based on performance, along with technical updates to align measure calculations and reporting timelines. Additionally, CMS is seeking stakeholder input through Requests for Information on topics such as advanced care planning and potential refinements to the Patient-Driven Payment Model (PDPM) to address case-mix coding practices. Comment by June 1.

On April 2, the Centers for Medicare & Medicaid Services (CMS) released a proposed rule for Medicare Inpatient Rehabilitation Facilities (IRF) Payment Rates for fiscal year (FY) 2027.

The proposed rule indicates a 2.4 percent increase for IRFs. In addition to payment updates the rule proposes applying the third and final year of the phase-out of the rural adjustment for IRFs transitioning from rural to urban that were reclassified due to Core-Based Statistical Area Delineations. CMS also proposes changes to the IRF coverage rules stating that current functional status be documented at admission, the initial Interdisciplinary Team (IDT) meeting must take place on or before the fourth day of admission, and all therapies must be started within 36 hours of admission. Additionally, CMS proposes to shorten the timeframe for data submission from 4.5 months to 45 days beginning in FY 2029. CMS has also included a request for information on modernizing the IRF PPS methodologies for classifying patient case-mix.

Comment by June 1. 

On April 2, 2026, the Centers for Medicare & Medicaid Services (CMS) issued a proposal to update Medicare payment policies and rates for Inpatient Psychiatric Facilities (IPF) under the IPF Prospective Payment System (PPS) for fiscal year 2027.

CMS is proposing to update the IPF PPS payment rates by 2.3% and is modifying the outlier payment policy.  CMS is proposing to cap outlier payments at the provider level so that the most expensive IPFs do not receive the majority of all available outlier payments. CMS is also proposing changes to the IPF quality reporting program measures. Comment by June 1.

Pennsylvania Attorney General Dave Sunday announced the release of an annual report that ranks his office’s Medicaid Fraud Control Section at No. 1 nationally in criminal convictions, and third overall in charges filed against those who steal from Pennsylvania’s Medicaid program, which provides limited-income and vulnerable populations with access to health care.

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