The Office of the Inspector General (OIG) continues to focus on Medicare Advantage (MA) risk adjustment payments, issuing a report this week detailing its audit of MA risk adjustment payments based on acute stroke diagnosis codes that do not have corroborating hospital records. OIG found that submissions for 97 out of 100 sample enrollees were not supported in the enrollee’s medical records, estimating $462 million in potential net overpayments in 2021. Unlike prior OIG audits assessing various high-risk diagnoses submitted by a single MA plan, this report focuses on a single condition across multiple plans. While the audit is not without its limitations, it is another signal that MA organizations should consider implementing proactive measures to ensure the accuracy of acute stroke diagnosis codes (in addition to other high-risk diagnosis codes) prior to submission to Centers for Medicare & Medicaid Services (CMS) and expect to continue seeing code-level audits from OIG.

Explore 2025 managed care enforcement trends under the Trump administration. Learn about DOJ and CMS priorities, Medicare Advantage risk adjustment cases, key cases interpreting regulatory changes, and compliance strategies for MAOs.

Last week, the Centers for Medicare & Medicaid Services (CMS) released its proposed Contract Year 2027 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, and Medicare Cost Plan Program (Proposed 2027 Rules).

As is common for the annual proposed rules, the Proposed 2027 Rules cover a broad range of topics. In the last few years, the agency has lost multiple legal cases challenging the validity of its rules and/or how it implements its rules – it has lost cases relating to Star Ratings, its updated marketing and communications rules that were adopted for 2025, and most recently, the risk adjustment extrapolation rule. The Proposed 2027 Rules broadly touch on all of these regulatory areas. In its very brief summary of the Proposed 2027 Rules, CMS also highlights changes to Part D drug coverage, the enrollment process, and special needs plans. The Proposed 2027 Rules also include multiple Requests for Information (RFI). Below are some initial takeaways.

On November 5, 2025, CMS published the CY 2026 Physician Fee Schedule Final Rule (Final Rule), which includes changes to how drug manufacturers must treat Bona Fide Service Fees (BFSFs) in the context of Average Sales Price (ASP) submissions. In the Final Rule, CMS opted not to finalize its proposal to modify the BFSF definition to require fair market value (FMV) methodology standards, FMV reassessments, and independent third-party valuations. This is a notable departure from the proposed rule, which we covered in a prior blog post. However, CMS is moving forward with several important provisions that impact how manufacturers and other stakeholders document and report BFSFs when calculating ASP for Medicare Part B drugs. This update highlights the finalized requirements that stakeholders should now prepare to implement effective January 1, 2026.

CMS finalizes 2026 Medicare Part D changes under the IRA, including new cost limits, subsidy guidance, and updated creditable coverage rules.

The CY 2026 Physician Fee Schedule Proposed Rule (PFS Proposed Rule) introduces significant changes to how drug manufacturers must treat Bona Fide Service Fees (BFSFs) when calculating Average Sales Price (ASP) for Medicare Part B drugs.

The CY 2026 Physician Fee Schedule Proposed Rule (PFS Proposed Rule) introduces significant changes to how drug manufacturers must treat Bona Fide Service Fees (BFSFs) when calculating Average Sales Price (ASP) for Medicare Part B drugs. While the rule is directed at manufacturers, it has important implications for plans, pharmacy benefit managers (PBMs), group purchasing organizations (GPOs), and other entities that receive BFSFs, particularly if the Centers for Medicare & Medicaid (CMS) proposes similar changes to Part D. 

Within the first six months of President Trump’s second term, his Administration and the GOP have already implemented significant policies that are reshaping health care in the United States. Through his Administration’s restructuring of the Department of Health and Human Services (HHS), promulgation of Marketplace Integrity and Affordability rules, sweeping RADV audit changes, and now the passage of the One Big Beautiful Bill Act (OBBA), entities throughout the health care industry—particularly managed care plans and sub-capitated providers—will need to readjust to the new paradigm. 

The PBM Policy and Legislative Update — Spring 2025 edition builds upon prior issues and summarizes activity from January through March (2025) that affects the PBM industry. It highlights federal activities, state activities, and other noteworthy events and trends affecting the PBM industry.