RISE summarizes recent regulatory-related headlines and reports.
MedPAC report: Medicare on track to spend 14% more on MA enrollees in 2026 than FFS
The Medicare Payment Advisory Commission (MedPAC) estimates that Medicare will spend $76 billion more on Medicare Advantage enrollees than beneficiaries in traditional Medicare or 14 percent more than fee-for-service spending for comparable beneficiaries.
In its annual report to Congress. MedPAC attributed the primary drivers of the increased cost to favorable selection and coding intensity. It said Medicare Advantage risk scores are projected to be about 10 percent higher than comparable fee-for-service scores in 2026. Although the Centers for Medicare & Services applies a 5.9 coding adjustment, MedPAC said that a reduction of 12.8 percent is needed to fully offset the coding difference. The report also notes that health risk assessments and chart reviews play an outsize role in payments, accounting for $34 billion in Medicare Advantage payments in 2023.
Another key takeaway from the report: The quality bonus program and Star rating system is costly and flawed. The report said that the quality bonus program will add $16 billion to Medicare Advantage plans in 2026 and the Star rating system has too many measures and is based on a reward-only structure and isn’t budget neutral.
OIG audit: BCBS of Alabama received $7 million in MA overpayments for 2018 and 2019
The Office of Inspector General (OIG) audit of Blue Cross and Blue Shield of Alabama found that most of the high-risk diagnoses codes that the insurer submitted in 2018 and 2018 to the Centers for Medicare & Medicaid Services did not comply with federal requirements for the agency’s risk adjustment program.
The audit focused on nine high-risk diagnosis codes for acute stroke. acute myocardial infarction, embolism, lung cancer, breast cancer, colon cancer, prostate cancer, sepsis, and pressure ulcers, Medical records for 247 of the 271 sampled enrollee-years did not support the diagnosis codes and led to nearly $769,000 in overpayments, according to the audit. Based on the sample results, OIG estimates that Blue Cross Blue Shield of Alabama received at least $7 million in overpayments for those years.
OIG recommends that Blue Cross Blue Shield of Alabama repay the government the $7 million of estimated overpayments as well as any overpayments that may have been made for similar instances of noncompliance that occurred after the audit period. In addition, it called for the insurer to examine its existing compliance procedure and take action to improve areas at risk for miscoding. The insurer disagrees with several findings and asked OIG to reconsider all the recommendations.
CMS tightens marketing rules for ACA quality ratings
The Centers for Medicare & Medicaid Services (CMS) has released its 2026 Quality Rating Information Bulletin, which provides guidance and formalizes how quality rating system scores and the QHP enrollee survey results must be displayed and marketed across the individual marketplace for the 2027 plan year.
According to the bulletin, insurers that choose to market their ratings must include specific CMS-mandated disclaimers, emphasize the latest rating year, and avoid any suggestion that CMS endorses or recommends a product. It also prohibits the use of superlatives, such as “highest rated,” and implications that all products carry a top score.
The agency also encourages plans to advertise Star ratings rather than numerical scores and specify the product type and state, and use CMS’ exact labels.
Insurers are also responsible for ensuring that agents, brokers, delegated entities, and downstream partners comply with the rules.
CMS issues guidance for organ donation system
The Centers for Medicare & Medicaid Services (CMS) has released new guidance for organ procurement organizations and donor hospitals, particularly to allow families more time to make decisions regarding organ donation without coercion. Among the provisions in the updated guidance hospitals must provide complete, life-saving medical treatment without regard to potential organ donation, and families are given time to make an informed decision. Click here to learn more.
Polls show Americans increasingly concerned with health care, prescription drug costs
Americans continue to face financial strain on their daily expenses, including groceries, utilities, and health care expenses. A new Gallup poll, conducted in partnership with West Health, finds that one-third of nearly 20,000 U.S/ adults polled from June through August 2025, have made at least one trade-off with daily living expenses to afford health care.
The financial trade-offs are most common among Americans who do not have health insurance, with 62 percent saying they have made at least one sacrifice to pay for health care, including 32 percent who have borrowed money and 24 percent who have prolonged medication. But even among those with insurance, 3 in 10 have made at least one sacrifice.
Meanwhile, a new KFF Health Tracking Poll finds that 59 percent of 1,343 adults surveyed late last month they are at least somewhat worried about being able to afford prescription drugs for themselves and their families, the largest share since KFF first polled on this question in 2018. This includes about one in five (22 percent) who are “very worried” about affording prescription drug costs.
The poll also found that 72 percent of the adults surveyed say that there is not as much government regulation as there should be when it comes to limiting drug prices, five times the share (13 percent) that says there is too much regulation of drug prices. At least two-thirds of Republicans (68 percent), independents (72 percent), and Democrats (77 percent) favor more government regulation of prices.