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Setting the Stage for the 2026 Medicare Advantage Rate Announcement
On April 4th and April 7th, 2025, the Centers for Medicare & Medicaid Services (CMS) released 2026 Medicare Advantage Final Rule and 2026 Final Rate Announcement, respectively. These releases outline critical policy updates and payment adjustments that will shape the present and future of Medicare Advantage plans. The impact of these changes and signals present both a challenge and an opportunity for plans to reassess their strategies and adapt to the new normal.
More than Just the Numbers
CMS finalized a 5.06% increase in Medicare Advantage payments for 2026, amounting to $25 billion in additional plan revenue. Big number. Big headline. But the real story is how CMS continues to evolve its role—not just as a payer but as a regulator, standard-setter and advocate for Medicare enrollees. It's not just how much CMS is investing in the Medicare program, it’s also about the standards for how the they expect plans to operate.
Star Ratings and Measure Impacts: Few Changes but Signals for What’s to Come
From a Stars perspective, these regulatory updates weren’t the tidal wave that some predicted. There was a notable measure rebrand, formerly the Health Equity Index (HEI). The much-maligned measure has been renamed to Excellent Health Outcomes 4 All (EHO4A). This change is not merely cosmetic but signals CMS’s ongoing commitment to reducing cost to the Medicare Advantage program (the true intention of the Health Equity Index anyway). In addition, the possibility of integrating geography as a social risk factor adds an extra layer of complexity for plans to consider. Plans may soon be required to account for geographic location when measuring and addressing health disparities and outcomes – a major nod to challenges in rural health. This could have a profound impact on how programs are designed and how quality measures are calculated, especially in communities facing systemic health challenges.
Finally, CMS has established official deadlines for plans to review and dispute data:
- May 30, 2025 – CTM data review deadline
- June 30, 2025 – Appeals data review deadline
- May 18, 2026 – Part D Patient Safety data review deadline (SY2027)
- March 31, 2026 – Deadline for all contracts to request a review of 2025 CTM data (SY2027)
With these fixed deadlines for data review, last-minute efforts to improve measure performance may be a challenge due to time constraints. Plans need to be much more proactive and diligent when reviewing their own data and searching for improvement opportunities.
A New Normal: The Need for Innovation in the Evolving CMS Landscape
The changes outlined in the 2026 Medicare Advantage announcements are more than just policy adjustments—they are part of a broader shift in the healthcare landscape. With figures like Dr. Oz and RFK Jr. now influencing the conversation, it’s clear that CMS is moving in a direction that prioritizes innovation, positive health outcomes, efficiency and adaptability.
CMS also showed strong interest in AI and operational efficiency, suggesting this administration is open to exploring technology’s role in modernizing Stars and other quality programs. The emphasis on the Universal Foundation of core measures—and the potential removal of many operational-style metrics—means plans will also need to focus on clinical outcomes, data capture/interoperability and measurement strategy in areas that matter most.
Plans must take a hard look at how they operate today and prepare to adjust their strategies under this new lens. The healthcare industry is entering a “new normal,” where the plans that succeed will be those that innovate and respond proactively to emerging trends. Those that fail to adapt risk falling behind in a competitive market. The future of Medicare Advantage will belong to innovators who can navigate this shifting terrain, ensuring that they are providing high-quality, outcomes driven care that meets the evolving needs of beneficiaries.
Conclusion: Building for the Future By Assessing Your Present
The Rate Announcement and Final Rule aren’t just technical documents—they’re a glimpse into CMS’s evolving philosophy: tighter guardrails, enhanced beneficiary protections and a firmer hand on program integrity and efficiency. The takeaway should be about building health plan infrastructure that can keep up with the direction that CMS is heading.
So, what should plans be doing now? We’re entering a summer and fall that will be filled with speculation, potential demonstration programs and policy previews that will shape 2027 and beyond. But 2026 is already defined—and it presents a critical opportunity for health plans to re-evaluate their Stars strategy, challenge current assumptions and reimagine how performance, data and member experience come together. At ProspHire, we’re working with clients to assess Stars readiness from every angle and every function—clinical workflows, data infrastructure, provider engagement and more. In this moment of change, everything should be on the table: new partnerships, new technologies and bold innovations that improve performance and drive sustainable results.
If your team is looking to get ahead of these changes and set the foundation for long-term success, let’s talk. At ProspHire, we have the experience and expertise in the Medicare Advantage and Stars space and the frameworks for evaluating plans capabilities and Stars potential. The way we approach our assessments of plans is comprehensive and wholistic, understanding that Stars success is about the entire health plan not just one team. Gaining a better understanding of your present, in order to prepare for the future will enable long-term success. Change is hard, but the work we do today will define your outcomes of tomorrow.
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