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Join us at HMA’s 2026 National Conference: Signals, Signs & Flashing Lights

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Registration is now open for the Health Management Associates (HMA) 2026 National Conference, US Healthcare 2026: Signals, Signs & Flashing Lights, October 5–7 in New Orleans, LA. 

HMA’s conference is intentionally structured to bring together leaders who are shaping decisions across sectors—those setting policy, managing risk, leading clinical operations, and innovating approaches to improve outcomes—to engage in candid conversations about what is working, what is not, and what is changing in Medicare, Medicaid, Marketplace and adjacent programs. In an environment defined by new challenges and “flashing lights,” even the most seasoned healthcare leaders will find value in stepping out of their day‑to‑day roles to compare strategies, test assumptions, and learn from peers facing similar pressures. 

This year’s conference is designed to reflect the environment healthcare leaders are navigating today—one defined less by policy certainty and more by shifting expectations and competing pressures on cost, access, and performance. Our experts are crafting discussions to address how organizations are approaching policy engagement in this environment, including new strategies for interpreting signals from federal and state policymakers and negotiating policy frameworks that directly shape market dynamics. 

Across plenary sessions, breakout discussions, and HMA’s signature coffee conversations, the conference will focus on how organizations are interpreting these signals and translating them into practical strategies. 

Programming will center on four cross-cutting themes shaping healthcare decision-making: 

  • Managing risk and cost amid continued financial pressure. Discussions will examine the drivers of utilization and affordability trends across Medicare, Medicaid, and commercial markets and which strategies are demonstrating measurable impact. 
  • Sustaining access and system stability. The agenda also will focus on how providers, health systems, and state programs are maintaining access amid workforce challenges, coverage transitions, and ongoing financial strain.
  • Turning innovation into impact. Sessions will explore where artificial intelligence (AI) and digital health tools are delivering measurable operational or clinical impact and what it takes to implement them effectively. 
  • Building partnerships that last. Conversation will highlight how stakeholders are aligning incentives, funding, and strategy to move from short-term responses to long-term, sustainable solutions. 

As in prior years, the HMA National Conference is structured to support candid dialogue, actionable takeaways, and meaningful connections. Attendees consistently highlight the opportunity to move beyond high-level trends and engage in practical discussions that inform decision-making in their organizations. 

Early-bird registration is now available for a limited time. The 2026 Sponsor Prospectus includes new opportunities for your organization. Additional agenda details, featured speakers, and interactive programming announcements will be released in the coming weeks. 

Outlook 2026: A Conversation on Medicare Draft Payment Rules

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As the Centers for Medicare & Medicaid Services (CMS) advances through the 2027 Medicare payment rule cycle, stakeholders across Medicare Advantage (MA) and the provider community are assessing how proposed changes could affect payment, utilization, and longer-term revenue. To better understand what to watch as draft rules move toward finalization, Jen Colamonico, Vice President, Strategy and Communications at Health Management Associates (HMA), caught up with Rachel Stewart, Senior Consulting Actuary with Wakley, an HMA Company. Of particular interest was CMS’s decision to eliminate the Inpatient Only List (IPO) over a three- year period.

Q: As CMS begins releasing draft payment rules for 2027, what stands out most to you from a budgetary perspective?
Rachel: Timing and uncertainty really stand out. These policies don’t operate in isolation. Changes to Medicare fee-for-service (FFS) payment ultimately affect Medicare Advantage benchmarks, provider contracting, and long-term revenue expectations. Because bids, budgets, and contracts are set before rules are finalized, modeling different scenarios becomes essential. 

Q: One issue that has garnered significant interest is CMS’s decision to phase out Medicare’s Inpatient Only (IPO) policy, which is a list of procedures and services that must be provided on an inpatient basis. In 2026, CMS eliminated nearly 300 services, mostly musculoskeletal services, from the IPO list. How are Medicare Advantage plans thinking about the Inpatient Only list specifically? 

Rachel: Historically, many MA plans have followed the IPO policy even though they weren’t required to do so, largely because it simplified operations and aligned with Medicare fee-for-service payment systems. Plans do have flexibility in how they contract with providers, and we see a wide range of approaches in the market. Some contracts closely mirror FFS, while others incorporate more customized arrangements or risk sharing. Because of that, the direct impact of IPO changes will vary significantly across plans and provider relationships. 

Q: Where do you see the biggest potential impact for Medicare Advantage?
Rachel: I think the bigger impact may be indirect rather than tied to individual contract changes. Medicare Advantage benchmarks are driven by underlying fee-for-service spending trends. If CMS anticipates lower overall inpatient spending as procedures move to outpatient or ambulatory surgical center settings, that expectation could show up in benchmark growth rates. Even relatively small changes in benchmark growth can affect plan revenue, rebates, and benefit flexibility. 

Q: Are you already seeing signs of that in the data?
Rachel: We do see lower inpatient trends reflected in the 2027 and 2028 US per capita cost projections. It’s still unclear what’s driving those trends—whether its assumptions related to the IPO list removal or other factors. We’ve asked CMS for more clarity. From an actuarial standpoint, understanding what’s baked into those projections is critical, because so many MA financial decisions flow from them. 

Q: How does this uncertainty affect provider planning, especially for hospitals?
Rachel: Providers are understandably concerned about potential revenue shifts if cases move out of the inpatient setting. But in Medicare Advantage, the picture is more nuanced than in fee-for-service. Many MA arrangements include risk sharing, medical loss ratio targets, and quality incentive payments. If overall costs decline, providers may share in savings through those mechanisms. So, while there may be pressure on inpatient revenue, it’s not necessarily a one directional loss. 

Q: Does that mean the overall impact may be less dramatic than it appears?
Rachel: Potentially, yes—especially for organizations already participating in value-based arrangements. A reduction in unit costs doesn’t automatically mean a reduction in total provider revenue in MA. The redistribution of dollars through shared savings and quality bonuses can offset some of that pressure. That’s why understanding contract structure is just as important as understanding the policy itself. 

Q: What about quality and patient safety as procedures move to lower cost settings?
Rachel: Quality is always central in Medicare Advantage, and plans are already managing a lot of complexity related to Star ratings and quality measurement. We haven’t yet seen specific quality safeguards tied to the IPO list changes, but I would expect more discussion in the forthcoming proposed rules. From the MA side, contracting remains a key lever. Plans still have flexibility to ensure procedures are performed in appropriate settings and to align incentives with quality outcomes. 

Q: What steps do you recommend to stakeholders to prepare for the final rule and for 2027?
Rachel: Modeling helps organizations understand the range of possible outcomes rather than betting on a single assumption. We’re looking at different utilization scenarios, site of care shifts, and benchmark growth trajectories. For providers, modeling can inform contract negotiations and capital planning. For plans, it helps assess revenue risk and benefit design flexibility. It doesn’t eliminate uncertainty, but it helps organizations make informed decisions. 

Q: If you could change one thing about how these policies are rolled out, what would it be?
Rachel: Transparency. The more clarity CMS can provide around cost projections and assumptions—especially those affecting benchmarks—the better positioned actuaries, plans, and providers will be to respond. So much of Medicare Advantage pricing relies on understanding how fee-for-service is expected to evolve. Greater transparency helps everyone plan more responsibly. 

HMA’s Medicare Practice Group Can Help 

As CMS moves closer to finalizing the 2027 payment rules, actuarial modeling will continue to be an important tool for translating policy direction into financial strategy. For MA plans and providers alike, early analysis and scenario planning can help mitigate risk and identify opportunity as Medicare’s payment landscape continues to evolve. 

For additional insights, listen to Rachel Stewart and Zach Gaumer on HMA’s Vital Viewpoints podcast. Learn more about our Medicare services and solutions. 

CMS Proposes Modest Hospital Payment Updates and Signals Expanded Use of Mandatory Value-Based Models

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On April 10, 2026, the Centers for Medicare & Medicaid Services (CMS) released the proposed rule for the Fiscal Year 2027 Hospital Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital Prospective Payment System (LTCH PPS). The proposal combines a modest net increase in hospital payments with policy signals around quality reporting and mandatory episode-based payment models—most notably a proposed nationwide expansion of the Comprehensive Care for Joint Replacement (CJR) model. 

These proposed updates underscore CMS’s continued emphasis on value-based purchasing, episode accountability, and alignment across quality programs. In addition, CMS resurfaces ongoing debates with hospital stakeholders about the adequacy of Medicare payment updates amid rising costs and coverage disruptions. 

This article reviews several key provisions in the FY 2027 proposed rule. 

Hospital Payment Updates: Headline Increase Masks Net Impact 

Under the proposed rule, CMS would increase base IPPS and LTCH PPS payment rates by 2.4 percent in FY 2027. However, after accounting for proposed reductions to uncompensated care payments for disproportionate share hospitals (DSH) and changes in outlier payments for extraordinarily high-cost cases, CMS estimates the effective payment increase would be closer to 1.2 percent. 

In aggregate, CMS projects the proposed update would translate to approximately $1.4 billion in additional payments to acute care hospitals next year. Hospital industry groups—including the American Hospital Association (AHA) and the Federation of American Hospitals (FAH)—have pushed back, arguing that the proposed update does not sufficiently reflect medical inflation, workforce pressures, or anticipated growth in the uninsured population. 

These concerns reflect a long-standing dynamic in annual hospital payment rules: CMS seeking to balance statutory updates and budget neutrality constraints against the hospital industry’s concern that Medicare payments are lagging behind underlying costs. 

Quality Reporting and Program Alignment 

The proposed rule would also make notable updates to the Hospital Inpatient Quality Reporting (IQR) Program. CMS proposes adding three new quality measures to be phased in during 2029 and 2030, while modifying eight existing measures to include Medicare Advantage patients. CMS also proposes shortening the performance period for certain measures from three years to two—a change designed to accelerate feedback and better align measures across programs. 

These changes continue CMS’s broader effort to harmonize quality measurement across Medicare payment and value-based programs, reduce reporting lag, and incorporate a more comprehensive view of patient populations. 

Updates to Mandatory TEAM Model 

CMS also proposes several updates to the Transforming Episode Accountability Model (TEAM), the mandatory episode-based payment model finalized last year. Key proposals include: 

  • Expanding the list of MS-DRGs included in the spinal fusion episode 
  • Aligning TEAM quality measurement performance periods with the IQR Program 
  • Making targeted technical refinements to payment methodology 

In addition, CMS is seeking stakeholder feedback on whether ambulatory surgery centers (ASCs) should participate in TEAM and whether participation should be voluntary for physician-owned hospitals, signaling potential future expansion or recalibration of the model. 

Proposed Expansion of Joint Replacement Bundles 

CMS proposes to expand the existing Comprehensive Care for Joint Replacement Expanded (CJR-X) Model nationwide beginning October 1, 2027. The agency also plans to make participation mandatory for most IPPS hospitals. 

CMS tested the original CJR model in 34 metropolitan areas between 2016 and 2024, generating improved patient outcomes and net Medicare savings, according to agency evaluations. CJR-X would become the fifth Center for Medicare and Medicaid Innovation model to meet the statutory criteria for nationwide expansion. 

Under CJR-X, hospitals performing lower extremity joint replacements would be accountable for the cost and quality of care for the initial procedure and most related spending during the subsequent 90 days. Although the overall structure mirrors the original CJR model, CMS proposes several important updates: 

  • Expansion of episodes to include ankle replacements, in addition to hip and knee procedures 
  • Adoption of a more robust risk adjustment methodology with significantly more variables, aligning closely with the TEAM model 
  • Introduction of a 5 percent stop-loss policy for hospitals that serve higher proportions of dually eligible beneficiaries and certain smaller hospitals 

Participation would be mandatory for most IPPS hospitals, with exceptions for hospitals already participating in TEAM, which includes a lower extremity joint replacement episode; Maryland hospitals operating under global budgets; and hospitals not paid under both IPPS and the Outpatient Prospective Payment System, such as Critical Access Hospitals. 

Why It Matters 

The 2027 IPPS and LTCH PPS proposed rule reinforces several clear policy signals: 

  • Pressure on hospital margins is likely to persist, as payment updates continue to trail hospital-reported cost growth. 
  • Mandatory episode-based models remain central to CMS’s value-based strategy, with CJR-X representing a significant escalation in scope and scale. 
  • Program alignment and MA inclusion are accelerating, with implications for hospital data systems, care coordination strategies, and reporting infrastructure. 

Hospitals and health systems will need to assess not only the near-term financial impact of the proposed payment updates, but also their readiness to accept expanded episode accountability and meet evolving quality measurement requirements. 

Comments on the proposed rule will shape final decisions regarding payment levels, quality program changes, and the scope of mandatory participation in CJR-X. Stakeholders will be watching closely to see whether CMS moderates its approach to mandatory models or doubles down on episode-based accountability as a cornerstone of Medicare payment reform. 

In parallel, CMS has released several other proposed payment rules this month, including those that would affect skilled nursing facilities, hospice providers, inpatient rehabilitation facilities, and inpatient psychiatric facilities. For these entities, CMS generally proposes payment updates of approximately 2.4 percent and 2.3 percent for inpatient psychiatric facilities. As part of its broader program integrity focus, CMS also has proposed new transparency measures for hospice providers; this follows recent enforcement actions related to fraudulent enrollment. 

Connect with Us 

Health Management Associates, Inc. (HMA), monitors federal regulatory and legislative developments in the inpatient setting and assesses the impact on hospitals, life science companies, and other stakeholders. Our experts interpret and model hospital payment policies and assist clients in developing CMS comment letters and long-term strategic plans. Our team replicates CMS payment methodologies and model alternative policies using the most recent Medicare fee-for-service and Medicare Advantage (100%) claims data. We also support clients with DRG reassignment requests, New Technology Add-on Payment (NTAP) applications, and analyses of Innovation Center alternative payment models. 

For more information about the proposed policies, contact one of our Medicare experts. 

HMA Resource Provides Key Insights about the Evolving Medicare-Medicaid Integration Landscape

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People who are dually eligible for Medicare and Medicaid remain a central focus for policymakers and healthcare organizations, given their complex care needs, disproportionate share of spending, and the long-standing challenge of coordinating coverage across two programs. One of the primary vehicles for advancing integration has been Dual Eligible Special Needs Plans (D-SNPs), which continue to play an increasingly prominent role as federal and state policymakers encourage tighter Medicare-Medicaid alignment.

As states play a more active role in shaping enrollment rules, Medicaid contracting, and procurement strategies, the duals market is becoming more structured and more explicitly guided by state policy decisions. Health Management Associates (HMA’s) 2026 Duals Integration Environmental Inventory, examines how this shift shapes the integration landscape in 2026. This comprehensive inventory is based on a review of the 2026 market, insights from states, and other publicly available resources.

This article examines key trends from HMA’s 2026 inventory and addresses federal policy changes scheduled to take effect for 2027, which contribute to this dynamic environment.

What to Expect in 2026

As the landscape for duals integration evolves, the central question has shifted from whether D-SNPs operate in a state to the more consequential question of how states are using Medicaid policy levers (i.e., enrollment rules, procurement, contracting, and managed care structures) to drive tighter alignment between Medicare and Medicaid. 

At the federal level, recent Medicare Advantage and Part D rulemaking is reinforcing that movement. The Contract Year 2025 Medicare Advantage and Part D Final Rule finalized the second phase-down of the D-SNP look-alike threshold to 60 percent for 2026 and established 2027 rules that limit enrollment in certain D-SNPs to members of an affiliated Medicaid managed care organization. The rule also limits the number of D-SNP benefit packages that can be offered alongside an affiliated Medicaid managed care organization. More recently, the Contract Year 2026 Medicare Advantage and Part D Final Rule requires certain D-SNPs to use integrated member ID cards and integrated health risk assessments beginning in 2027. 

Together these rules signal a continued federal emphasis on linking D-SNP enrollment and operations more closely to Medicaid coverage and delivery systems, with states playing a greater role in determining how alignment is achieved. 

What the 2026 Inventory Shows

HMA’s 2026 Duals Integration Environmental Inventory shows how these policy signals are translating into state action. More specifically: 

  • Statewide exclusively aligned enrollment appears in 16 states in the 2026 inventory, up from nine in 2025. 
  • Applicable Integrated Plans (AIPs) are present in 22 states, up from 14, and default enrollment is in place in 21 states, up from 16. 
  • The inventory also captures 6,084,997 total D-SNP enrollees, including 1,975,250 in Highly Integrated SNPs (HIDE) and 743,683 in Fully Integrated SNPs (FIDE-SNPs). 

Those changes are already visible in state markets: 

  • Illinois, Massachusetts, Ohio, and Rhode Island entered 2026 with a greater FIDE-SNP presence tied to legacy Medicare-Medicaid Plan transitions. 
  • Michigan launched MI Coordinated Health as a HIDE-SNP in selected regions in 2026, with statewide expansion planned for 2027. 
  • Delaware also stands out: Although it already had AIPs in the 2025 inventory, it adds statewide exclusively aligned enrollment in 2026 and shows both HIDE-SNPs and coordination-only D-SNPs. 

A Resource to Track State Market Direction

HMA’s 2026 Duals Integration Environmental Inventory, available to HMA Information Services (HMAIS) subscribers, includes a state-by-state view of the Medicaid policy, contracting, and program structures shaping duals integration and D-SNP markets. In addition to enrollment trends, the inventory documents the integration model each state is pursuing, whether long-term services and supports or behavioral health are included in managed care, and how procurement and contract decisions may inform future market activity. 

HMA experts work with clients to apply this information and deepen their understanding of state integration approaches, inform assessments of their market readiness and alignment opportunities, and develop strategies that support more effective Medicare-Medicaid integration. 

Looking Ahead

Notably, HMA’s inventory reflects a point in time understanding of where an individual state is today and what is known at this time about their next steps and plans. However, we expect changes in many states as they seek guidance from the Centers for Medicare & Medicaid Services and the D-SNP community to implement required changes and adopt new regulatory provisions that support state goals and priorities. 

The 2026 inventory suggests that more states are using formal alignment tools, that more enrollment is concentrated in integrated products, and that more markets are being shaped by the interaction between Medicaid structure, procurement, and D-SNP strategy. 

Connect with Us 

For organizations seeking to understand where the market is headed, the Duals Integration Inventory offers a clear view of how state policy and market structure are evolving and where tighter Medicare-Medicaid alignment is taking hold. 

Contact Holly Michaels Fisher and Julie Faulhaber to discuss your organization’s questions and needs regarding an integration strategy and market analysis. For information about the HMAIS subscription, access to the Duals Environmental Inventory contact Andrea Maresca and Gabby Palmieri. 

CMS’s LEAD Model: A New Phase for Accountable Care and Application Considerations

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The Long‑term Enhanced Accountable Care Organization (LEAD) Model represents the next major step in the Centers for Medicare & Medicaid Services (CMS) accountable care strategy and reinforces a federal commitment to value-based participation in Traditional Medicare. Announced as the successor to ACO REACH, LEAD is a voluntary, nationwide, 10‑year model that will operate from 2027 to 2036, making it the longest-running accountable care organization (ACO) model the Center for Medicare and Medicaid Innovation has tested.

Momentum around the LEAD ACO model has accelerated since CMS’s recent release of the Request for Applications (RFA), which formally moves LEAD from policy design to implementation. The RFA requires prospective participants to evaluate program design choices, financial implications, and operational readiness on a compressed timeline. Notably, CMS has indicated that additional opportunities to express interest will follow for organizations that are not prepared to apply for participation in the initial cohort.

This article explains key design elements of the LEAD model and identifies considerations for organizations assessing whether and when to pursue participation in LEAD.

Core Design Evolutions of the LEAD Model

While LEAD builds on many of the elements from ACO REACH, its design reflects how the Innovation Center intends to address challenges with previous ACO models, such as the Medicare Shared Savings Program (MSSP). At its core, LEAD seeks to establish a pathway to long‑term engagement in value-based care that creates an attractive option for all types of providers, including ACOs with a history of engaging in value-based care and providers that have yet to meaningfully participate.

LEAD introduces a set of targeted design changes intended to improve predictability, alignment accuracy, and long‑term participation in accountable care—most notably through revised benchmarking, updated beneficiary alignment, and expanded flexibility for engaging specialists and high‑needs populations.

1. Revising Benchmarking Policies to Support Predictability and Success

  • LEAD provides a major win for ACOs seeking long-term predictability by setting a long-term benchmark that will not rebase for the entirety of the 10-year model. In MSSP, many ACOs eventually face the “ratchet effect” in which benchmarks erode after rebasing to reflect the ACO’s more recent spending patterns. It can create a significant hurdle for ACOs that have already successfully reduced spending, as their own prior success lowers their benchmark. By not rebasing for the entirety of the model period, LEAD provides an attractive alternative to the MSSP, which rebases every five years.
  • LEAD will also support historically successful ACOs by transitioning to a fully regional rate book by the end of the model period. As a result, benchmarks will be set based on overall spending in the region where an ACO operates rather than an ACO’s historical spending. While ACO REACH also used a regional rate book to inform some ACO benchmarks, LEAD goes further by seeking to transition all ACOs to a benchmark based fully on a regional rate book while also adding protections for higher-spending ACOs by transitioning regions at different timelines to ensure that newer ACOs have the opportunity to implement the kinds of care delivery changes that lead to lower spending before they are subject to penalties.
  • Other notable changes to benchmarking include a variety of ACO-specific adjustments and the addition of an administrative component to benchmarking. ACOs will be eligible to receive a boost to their benchmarks with either a regional efficiency adjustment for ACOs with lower spending or a prior savings adjustment for ACOs with a demonstrated history of achieving savings. LEAD also introduces an administratively set component to benchmarking—the Accountable Care Prospective Trend—which already is used in the MSSP, though LEAD adds a new guardrail policy to promote predictability.

2. Improving Accuracy in Beneficiary Alignment

  • LEAD’s new “hybrid” alignment option increases accuracy and responsiveness. Monthly additions of voluntarily aligned beneficiaries and mid-year recognition of new participant taxpayer identification numbers (TINs) adopted after the start of the performance year (PY) allow alignment to better reflect real-time care relationships, averting lag and operational friction.

3. Adding Support for High-Needs Beneficiaries

  • LEAD expands support for beneficiaries with complex needs through a universal High Needs category and recalibrated risk adjustment. By moving away from ACO REACH’s population‑exclusive model, LEAD lowers barriers for organizations that serve a disproportionate share of high‑needs and dually eligible populations. In addition, CMS will test Medicare‑Medicaid alignment in two states, and help states develop arrangements supporting the provision of value-based care between ACOs and state Medicaid agencies or managed care organizations.

4. Promoting Deeper Engagement with Specialists

  • LEAD increases flexibility for engaging specialists in value‑based arrangements. New Non‑Primary Care Capitation options and episode-based risk arrangements (CMS‑Administered Risk Arrangements (CARAs)), allow ACOs to share risk with specialists without Total Care Capitation, reducing operational complexity while expanding accountability beyond primary care.

5. Advancing Technology Adoption and Innovation

  • LEAD introduces structured pathways to promote technology adoption. Planned Artificial Intelligence (AI)‑inferred risk adjustment will be phased in following successful testing and validation, while the Tech Enabler Initiative and Rapid Cycle Innovation Program seek to reduce administrative burden and accelerate evidence generation—particularly for smaller or resource‑constrained ACOs.
Next Steps

The Innovation Center is operating on an accelerated timeline for the initial LEAD cohort. Prospective ACOs have fewer than 50 days to digest a detailed Request for Applications and model potential performance. Applications are due May 17, 2026. ACOs that participated in ACO REACH in PY 2026 will be well-positioned, as many of the provisions in LEAD will be familiar, and the agency is permitting this group of ACOs to submit an abbreviated application for participation.

For organizations not ready to apply for the first cohort, CMS will release a standardized Letter of Interest form by April 17, 2026, to gauge interest in future application rounds. In this context, organizations considering LEAD participation should be assessing not only near‑term application readiness, but also longer‑term strategic alignment with the model’s 10‑year commitment, risk structure, and operational requirements. Key considerations include benchmarking predictability, readiness to manage regional benchmarks, capacity to engage specialists and high‑needs beneficiaries, technology capabilities, and alignment with broader value‑based care strategies across Medicare and Medicaid.

Connect with Us

Health Management Associates (HMA), supports organizations across the LEAD decision continuum, including those pursuing immediate application and those preparing for future cohorts. HMA can help organizations:

  • Interpret LEAD’s policy and financial design relative to existing ACO and MSSP participation
  • Model performance scenarios under alternative benchmark, alignment, and risk configurations
  • Assess operational readiness across care management, contracting, analytics, and compliance
  • Develop application strategies and supporting materials, including responses to the LEAD RFA
  • Choose to defer application on steps that preserve future optionality

As CMS advances LEAD under an ambitious timeline, early analysis and disciplined decision‑making will be critical for organizations seeking to align participation with their long‑term value‑based care strategies.

For questions contact Amy Bassano and Rebecca Nielsen.

HIMSS26: Building the Foundation for Interoperable, AI-Ready Healthcare 

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Key Insights from the 2026 HIMSS Global Health Conference and What They Mean for Your Organization  

American healthcare is confronting two urgent realities. First, the administrative burden on clinicians and patients remains very high. Prior authorization delays, manual intake forms, fragmented records, and identity challenges continue to drive cost and erode the trust that is the foundation of the provider-patient relationship. At the same time, artificial intelligence (AI) capabilities are advancing rapidly, outpacing governance frameworks, regulatory structures, and data infrastructure. Together, these dynamics are the defining operational challenge of 2026. 

Federal policy is responding less through sweeping new regulation than through coordinated execution levers. The Centers for Medicare & Medicaid Services (CMS) initiatives, including the Health Technology Ecosystem, information blocking enforcement, Health Data, Technology, and Interoperability (HTI-5) Proposed Rule , and the prior authorization (PA) final rule, reflect a shift toward making interoperability operational in production environments. What distinguishes this moment from prior efforts is the explicit linkage between interoperability and AI. Federal leaders are saying openly that reliable, trustworthy, and deflationary AI depends on disciplined data exchange, identify, and governance. 

The 2026 HIMSS Global Health Conference & Exhibition (HIMSS26), March 9–12, in Las Vegas, NV, marked a marked a turning point in which the industry began translating that message into tangible organizational decisions. Two Health Management Associates (HMA), companies actively engaged in the program: the Leavitt Partners digital health team moderated sessions in the preconference forums and Interop Experience Pavilion, and Wakely Consulting Group, lent their expertise in Medicare Advantage (MA), Medicaid managed care, risk adjustment, and quality measurement—the areas in which FHIR-based infrastructure will directly reshape performance and risk management. 

This article reflects what these teams learned and what it means for the industry. 

What We Learned at HIMSS 

Several themes surfaced throughout the conference, not as isolated ideas but as shared assumptions of the field shaping near-term strategy: 

Successful AI deployments rely on interoperability and quality data.  Across sessions and conversations, speakers emphasized that success will require not just access, but data that are standardized, governed, and semantically consistent. The promise of AI is advancing quickly, but many organizations are still working to build the data foundation needed to support it. 

CMS-aligned networks are paving the way for federal transformation. Concrete pledge deadlines, and a Centers for Medicare & Medicaid Services (CMS) Administrator willing to say publicly that healthcare is the only sector where technology has failed to be deflationary, sent a signal that the industry took seriously. Voluntary frameworks are being seen as previews of future requirements. 

Information blocking enforcement is no longer theoretical. Officials from ASTP/ONC confirmed that notices of potential nonconformity have already gone out to health IT firms under the certification program, and more are on the way. With Department of Health and Human Services Office of the Inspector General penalties of up to $1 million per active violation and more than 1,500 complaints filed since the federal portal launched, the compliance calculus has shifted. Dr. Thomas Keane, National Coordinator for Health Information Technology, was direct: Developers that block information risk losing their certification, and their clients risk losing access to CMS payment incentives. The long implementation runway is over, enforcement is now active, and the consequences are real. 

The federal vision for AI is patient-first. CMS Administrator Dr. Mehmet Oz said to slow the inflationary effects of the growth in healthcare technology, he wants to put agentic AI tools in the hands of every Medicare beneficiary before the end of this administration—an ambitious goal. He cautioned, however, that none of it works without building the necessary data infrastructure now. AI is the destination; interoperability is the road. 

CMS is ready to pivot to digital quality measures and put investment behind it. CMS and ASTP/ONC leadership announced that all quality measures will now be modeled on HL7 FHIR. MultiCare Connected Care showed it working in production. Early adopters will shape the pathway and gain strategic advantage as the transition accelerates. Successful transformation will require simplified workflows, established lines of accountability, and a product-oriented mindset geared toward data and interoperability. 

Identity is a known gap, but the solution is taking shape. Patient matching, provider directories, and consumer-facing credentialing came up in nearly every policy and technical session. The $6 billion CMS cited for annual provider directory validation waste alone captured attendees’ attention. But HIMSS26 brought concrete, live progress on the credential side and a Leavitt Partners-moderated preconference session focused on moving the industry from alignment in principle to alignment in production. 

Governance is now an operational discipline. Health system chief information officers and chief medical information officers described governance structures already in place and under active revision. The shift from “we need governance” to “our governance needs to evolve” was palpable. 

Consumer technology has entered the clinical conversation. Emory Hillandale Hospital’s announcement of the first all-Apple facility signaled that the boundary between consumer devices and clinical infrastructure is evolving. 

Autonomous AI systems were everywhere. Vendors demonstrated how AI agents are handling administrative workflows, such call centers, revenue cycle, scheduling, and PA. Health system leaders acknowledged real deployments alongside real uncertainty about governance, security, and identity management for non-human actors in clinical environments. The technology is moving faster than the frameworks designed to oversee it. 

What It Means: Five Insights 

The CMS Health Technology Ecosystem is redefining what “interoperable” means for federal programs; TEFCA will scale what it proves 

For years, interoperability has been a certification checkbox rather than a functional description. The CMS ecosystem is changing that by tying the definition to observable behaviors: HL7 FHIR APIs that respond, encounter notifications that fire, identity verification that works at the front door. More than 700 organizations have pledged; CMS has set hard deadlines (March 31 for initial results, July 4 for advanced capabilities), and the agency is tracking outcomes, not just attestations. 

In the fireside chat moderated by Leavitt Partners Principal Ryan Howells, Dr. Thomas Keane was direct: The regulatory cycle is slow, and what the ecosystem can produce in nine months is what the regulations will eventually codify. Organizations that shape this work now will have less catching up to do when it becomes mandatory. 

The Trusted Exchange Framework and Common Agreement (TEFCA), which now exchanges 600 million health records across 75,000+ organizations (up from 10 million in January 2025), is the rising tide that scales what the speedboat networks prove. And state-level health information exchanges (HIEs) remain strategically important given their governance structures, trust relationships, and operational capabilities. 

Provider directory is the sleeper issue 

Patient matching and digital identity got considerable attention, but a provider directory may be the highest-yield near-term opportunity. CMS estimates $6 billion is wasted annually simply validating where providers practice, what licenses they hold, and what insurance they accept—a problem that compounds every time a payer, health system, or patient tries to connect with the right clinician through the right channel. 

A real-time, standardized provider directory is foundational to PA, network adequacy, and care navigation. It is also one of the three heavy lifts that the CMS Health Technology Ecosystem is actively working to address. Organizations that invest now in clean, FHIR-based provider data will be ahead of an upcoming requirement. 

Semantic Consistency Determines AI Outcomes 

The distinction between syntactic interoperability (data move between systems) and semantic interoperability (data means the same thing in every system) was a running thread through the Interoperability and HIE Forum. Dan Liljenquist, chief strategy officer at Intermountain Healthcare, put the operational reality plainly during his keynote address: Intermountain is building a unified semantic data layer in the cloud—ingesting EHR data daily, normalizing it against common models, making it computable across 34 hospitals—because without that layer, AI produces unreliable outputs at scale. 

Graphite Foundry, the mechanism Graphite Health is developing as a nonprofit collaborative, represents a model where health systems build shared semantic infrastructure rather than solving the same problem independently behind proprietary walls. The broader implication: AI strategy and data infrastructure strategy are the same, and organizations that treat them separately will find that their AI investments underperform. 

Digital Identity and Privacy Architecture are Converging 

Policy and industry discussions reflected growing alignment around higher‑assurance digital identity, privacy‑preserving design, and consistent credentialing. Progress in this area reduces friction for patient‑directed access while supporting trust and security across ecosystems.  

Mr. Howells moderated the preconference session, Bridging Digital Worlds: Identity Federation Strategies Across B2B and B2C Ecosystems, which brought together CMS Chief Health Technology Officer Alberto Colon Viera, David Bardan (CLEAR), Wes Turbeville (ID.me), and Renee Edwards, Applied AI at UnitedHealth Group. The session produced three concrete outcomes:  

  • CMS confirmed Medicare.gov is now live with CLEAR, ID.me, and Login.gov, meaning consumers can choose which credential they use and relying parties can leverage that same credential to authenticate consumers into their own systems.  
  • Participants agreed on a common IAL2 token payload.  
  • UnitedHealth Group announced United Health Group’s pursuit of Kantara certification and unification of all their portals to a single identity based on IAL2. 

Identity has long been a blocker to scalable patient access. Aligning on a common IAL2 model removes another friction point and moves the industry closer to a future in which patients can securely access their medical records through the apps they choose. 

Interoperability is Expanding Beyond Traditional Boundaries  

For years, FHIR-based infrastructure has been built primarily around clinical and claims data. But two sessions in signaled meaningful progress on two long-neglected fronts: pharmacy and oral health. Pharmacy data — critical to medication management, managed care, and complete longitudinal records—are increasingly being drawn into the standards-based exchange ecosystem, including the recognition of pharmacists as clinicians whose data and clinical contributions belong in the longitudinal record. 

Patients are also gaining real-time visibility into their own pharmacy benefits: the Consumer Real-Time Pharmacy Benefit Check, an open FHIR-based standard, puts cost and coverage information directly in patients’ hands at the point of prescribing — a meaningful step toward the same patient empowerment that the “kill the clipboard” and digital identity work is driving elsewhere in the ecosystem.  

Oral health data, long absent from the medical record despite its correlation with diabetes, cardiovascular disease, and maternal health, is now the subject of active federal interoperability investment across CMS, the Veterans Health Administration, and the Indian Health Service. Leavitt Partners’ alliances in both domains—the Oral Health Interoperability Alliance and the Pharmacy Interoperability and Clinical Services Alliance (PICSA)—are helping shape the technical and policy frameworks that will bring these data streams into the broader ecosystem. Whole-person care requires whole-person data, and the field is finally building the infrastructure to support it. 

What Remains Unresolved 

Despite momentum, several issues remain unresolved:  

The Role of Payers in TEFCA and National Exchange is Still Evolving 

There is growing interest in extending TEFCA beyond provider-to-provider exchange to support payer use cases such as quality measurement, care management, and prior authorization. However, questions remain around participation models, data rights, governance, and value alignment. Until these are resolved, payer engagement will likely remain uneven, limiting the full potential of nationwide exchange. 

The Business Case for Interoperability is Not Yet Consistently Realized 

While the policy direction is clear, the economic incentives are still misaligned. Providers often bear the operational burden of data exchange, while financial benefits may accrue elsewhere. Similarly, investments in interoperability infrastructure do not always translate into immediate or measurable returns. Advancing adoption will require clearer ROI pathways, shared incentives, and models that distribute value more equitably across stakeholders. 

Governance and Operating Models are Still Catching Up to the Technology. 

There is increasing recognition that interoperability at scale is not just a technical challenge — it is a governance challenge. Questions around enforcement, delegation of authority, participant accountability, and operational oversight remain active areas of development. As exchange expands, these governance structures will need to mature rapidly to sustain trust and ensure consistent implementation. 

Near-term signals, such as CMS responses to pledged-network deadlines, finalization of HTI5 and related rules, continued prior authorization modernization, and digital quality measure implementation, will shape the next phase of execution. 

What We’re Watching 

Extending Open Standards to Rural and Underserved Providers 

The Rural Health Transformation Program offers a unique opportunity to expand the open standards ecosystem being built. Leavitt Partners and Wakely are engaged in both the policy conversations and implementations that will determine how to ensure this opportunity can transform healthcare. 

March 31 and July 4 deadlines 

CMS set these dates publicly and specifically. How the agency responds to organizations that miss them will signal how serious the voluntary framework really is and how quickly it becomes a program condition. 

HTI-5 Finalization and HTI-6 Proposed Rule 

ONC’s proposed rule to focus certification on HL7 FHIR APIs, algorithm transparency, and interoperability is still in proposed form. Finalization, as proposed, would transform the vendor landscape and remove the safe harbor that legacy proprietary interfaces have relied on. 

Prior Authorization is Moving 

The federal regulations and last summer’s voluntary commitment by more than 60 health insurers covering 257 million Americans across commercial, Medicare Advantage, and Medicaid markets has created a moment of regulatory and industry alignment. Payers committed to reducing the volume of services requiring PA, standardizing electronic PA using HL7® FHIR® APIs, and answering at least 80 percent of electronic requests in real time by 2027. The direction is clear, the commitments are specific, and the infrastructure to support them — HL7® FHIR® APIs being built for patient access and the ecosystem is the same infrastructure PA modernization requires. Leavitt Partners and Wakely are watching closely as implementation moves from pledge to production.  

The Digital Quality Measure (dQM) Enters the Implantation Phase 

CMS has made clear where the market is headed: digital quality measurement built on HL7 FHIR. The challenge now is execution. FHIR infrastructure developed for prior authorization or patient access can be leveraged for quality reporting as well, creating the potential for reusable investment across use cases. But the transition to dQM is not simply a technology upgrade; it is a broader business transformation that will require changes in workflows, governance, and organizational readiness. 

Digital Identity Momentum 

The IAL2 token payload agreement, Medicare rollout of digital identity, and United Health Group’s Kantara pursuit signal that the industry is aligning on a shared credential infrastructure. Leavitt Partners will continue to support the development and adoption of the open identity standards that make patient-directed access real across payers, providers, and health technology platforms. 

The infrastructure for an interoperable, AI-ready healthcare system is being built under real policy pressure in real-world environments. HMA companies bring health IT policy and open standards expertise to help organizations shape and navigate that landscape as well as actuarial and implementation depth to translate it into financial and operational decisions. Organizations that invest in the foundation—data, identity, standards, governance—will be positioned to move faster and more responsibly as AI capabilities continue to advance. 

We Can Help 

HMA companies are uniquely positioned to help organizations move from interoperability strategy to real-world execution. We provide end-to-end support across digital quality measurement transformation, policy-to-operations execution, pharmacy interoperability, oral health interoperability, digital insurance cards, and the actuarial and financial modeling needed to assess performance impact, revenue implications, and reporting risk. Leavitt Partners and Wakely professionals were active participants in HIMSS26 conversations and bring the policy, operational, measurement, and financial expertise needed to help clients prepare for what comes next. 

This blog reflects policy signals and public session content from the 2026 HIMSS Global Health Conference. It represents the perspective of Leavitt Partners and Wakely Consulting Group, both HMA Companies, and does not constitute legal or regulatory advice

PBM Reform Accelerates: New Rules, Broader Oversight, and What’s Ahead

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The first quarter of 2026 marked a turning point in federal oversight of pharmacy benefit managers (PBMs), the intermediaries that manage prescription drug benefits for most health plans across the commercial insurance market, Medicare Part D, and other programs. New legislation, agency rulemaking, and enforcement activity collectively signal a new phase of oversight that could materially reshape PBM contracting, compensation, and transparency requirements. 

Most notably, the following developments stand out: 

  • The US Department of Labor (DOL) proposed new disclosure requirements for PBMs that serve self-insured Employee Retirement Income Security Act (ERISA) plans. 
  • The Consolidated Appropriations Act of 2026 (CAA 26), signed February 3, 2026, establishes comprehensive PBM transparency and contracting requirements in the commercial insurance market and Medicare Part D. 
  • The Federal Trade Commission (FTC) finalized a settlement with Express Scripts, Inc. (ESI), requiring significant changes to ESI’s business practices. 

Together, these actions signal a trend toward greater PBM accountability, with implications for plans, pharmacies, manufacturers, and consumers. This article provides a high-level overview of the major recent developments in the PBM reform policy landscape, along with key considerations for stakeholders. 

Medicare Part D: Key Statutory Changes 

Beginning in plan year 2028, CAA 26 makes significant changes for PBMs operating in Medicare Part D. Key provisions include: 

  • Requiring PBMs to provide annual reports to plan sponsor clients detailing aggregate and drug-specific costs 
  • Restricting PBMs compensation structures, prohibiting payments tied to drug prices, rebates, or price-based benchmarks and limiting PBMs to only receive bona fide service fees that reflect fair market value 
  • Stipulating additional parameters related to rebate guarantees, contract terminology, and audit rights 

Additional provisions that will take effect in beginning with plan year 2029 include: 

  • A requirement that plan sponsors and PBMs comply with forthcoming standards for “reasonable and relevant” pharmacy contracting terms and conditions 
  • Expansion of the enforcement infrastructure to avert potential violations of the program’s pharmacy contracting requirements 

Key considerations: The Centers for Medicare & Medicaid Services (CMS) has broad discretion in implementing these provisions, including setting pharmacy contracting standards, determining which PBM affiliates are subject to new requirements, and defining “fair market value.” PBMs will face expanded reporting and compliance obligations, while plans and other stakeholders will have opportunities to shape implementation through the regulatory process. 

Commercial Health Insurance Market: Key Statutory Changes 

For the commercial market, CAA 26 establishes similar transparency requirements for PBMs that serve fully insured and self-insured plans, with reporting required up to four times per year. Unlike Medicare Part D, the statute does not prohibit pricelinked compensation in the commercial market, but it does require detailed disclosure of PBM fees and revenue streams. For contracts with selfinsured plans, PBMs must remit 100 percent of rebates and fees tied to drug utilization, subject to specified limitations. 

Key considerations: These provisions significantly expand federal oversight in the commercial market. PBMs will need to scale compliance infrastructure, while employers and other plan sponsors may seek enhanced analytical and actuarial support to interpret disclosures and assess PBM performance. 

Medicaid Left Out, For Now. 

Unlike prior legislative packages, CAA 26 does not include Medicaid-specific PBM reforms, such as prohibitions on spread pricing (i.e., a PBM charges a payer more than the amount it pays the dispensing pharmacy for a prescription) and expanded National Average Drug Acquisition Cost (NADAC) reporting. 

Key considerations: These policies continue to have bipartisan support and could reemerge in future legislation. States, PBMs, and managed care plans should continue monitoring for renewed federal action on these policies. 

DOL’s Proposed PBM Fee Disclosure Rule 

DOL’s proposed rule, “Improving Transparency Into Pharmacy Benefit Manager Fee Disclosure,” would require PBMs serving self-insured ERISA plans to disclose information about rebates, manufacturer fees, pharmacy payments, and spread pricing. In late February, DOL extended the public comment period to April 15 to allow stakeholders to address how the proposed rule should align with the newly enacted CAA 26 provisions. 

Key considerations: DOL could withdraw the proposal in favor of the statutory framework or could finalize the rule to take effect before the CAA 26 requirements begin. Either path would further increase near-term compliance for PBMs and plan sponsors, and stakeholders should monitor this space closely. 

FTC Settlement with ESI 

The FTC’s settlement with ESI resolves insulin-focused litigation against the PBM and imposes extensive requirements related to transparency, compensation, rebates and fees, and benefit design. The settlement also includes less common provisions, such as a commitment to reshore and increase disclosures related to ESI’s rebate group purchasing organization (GPO) functions. 

Key considerations: If similar settlements are reached with other PBMs, the FTC could play an expanded role in shaping PBM market behavior, supplementing legislative and regulatory reforms with enforcement-driven standards. 

State Efforts to Regulate PBMs 

States continue to pursue PBM reforms, with dozens of laws enacted in recent years addressing licensure, reporting, pharmacy reimbursement, and contracting standards. Although the Supreme Court’s 2020 decision in Rutledge v. PCMA opened the door to certain state-level reforms, subsequent court decisions have narrowed the scope of permissible state regulation, particularly when ERISA preemption or Medicare Part D conflicts arise. 

Key considerations: Stakeholders operating across multiple markets and states will continue to face a complex and evolving patchwork of requirements, underscoring the importance of ongoing policy tracking and compliance coordination. 

Connect with Us 

Recent federal and state actions suggest that PBM reform is entering a more operational phase defined by transparency and enforceable standards governing compensation, contracting, and market behavior. As implementation unfolds, stakeholders across the prescription drug supply chain will need to engage closely with regulators, assess new data flows, and adapt their business practices to a more prescriptive oversight environment. 

For more information about the policies described in this article and the PBM policy landscape more broadly, please contact our experts Conor Sheehey or Stephen Palmer. 

Outlook 2026: What CMS’s Proposed 2027 NBPP Signals for ACA Marketplaces, States, and Consumers

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The Centers for Medicare & Medicaid Services (CMS) proposed 2027 Notice of Benefit and Payment Parameters (NBPP) marks a notable shift in Marketplace policy, expanding lower premium plan options, relaxing certain federal standards, and moving more implementation and oversight responsibility to states and Marketplaces. It also introduces eligibility and verification policies that could significantly affect enrollment, operations, and market stability. 

To unpack what this could mean for plan year 2027 and beyond, Andrea Maresca spoke with Zach Sherman, Managing Director for Coverage Policy and Program Design at Health Management Associates (HMA); Lina Rashid, Principal at HMA; and Michael Cohen, PhD, Principal at Wakely, an HMA company, who, alongside colleagues, published a Policy Brief on state-level and consumer impacts, as well as a Wakely White Paper on the proposed rule. 

 Q: When you zoom out from the technical details, what are the big takeaways from the proposed 2027 NBPP for states, consumers, and issuers? 

Lina Rashid: At a high level, the proposal reallocates risk and responsibility across the system. Consumers may see more lower premium options through expanded catastrophic plan eligibility and more flexible bronze plan design, but often with more cost-sharing, higher deductibles, or greater complexity. For consumers, affordability is about more than just premiums; it’s about how much healthcare costs for individuals and their families overall and the cost of care when they need it. 

States are being given options to take on more oversight and operational responsibility but without additional federal funding. And issuers are being given more flexibility, but it comes with uncertainty regarding enrollment and risk mix. 

Zach Sherman: The rule’s cumulative effect matters more than any one policy. Expanded catastrophic eligibility, higher out-of-pocket exposure, relaxed network standards, and tighter verification requirements all interact. Together, they raise questions about access, affordability, and whether Marketplaces are equipped to manage administrative and enrollment disruption. 

Q: The paper highlights potentially significant enrollment effects. What’s driving that dynamic? 

Michael: Two things stand out. First, the proposal implements statutory changes that remove advance premium tax credit (APTC) eligibility for certain lawfully present immigrants beginning in 2027. CMS estimates more than a million people could lose eligibility, and it’s reasonable to expect most of them will exit the individual market. 

Second, the proposed income verification changes could generate millions of data matching issues (DMIs) that temporarily or permanently cut off access to advance premium tax credits. While CMS projects a relatively modest disenrollment effect, our analysis suggests losses could be meaningfully higher depending on how quickly issues are resolved. We estimate that approximately 4.7 million enrollees could receive DMIs under the proposal, and upward of 80 percent of them could temporarily or permanently lose access to APTCs, putting coverage at risk. 

Zach: If consumers can’t afford the full premiums while resolving a data issue, many will drop coverage. That creates churn and administrative strain that Marketplaces must manage. 

Q: How do these policies affect state Marketplaces and regulators specifically? 

Zach: States are being asked to do more across multiple fronts. Network adequacy oversight is shifting toward states that conduct effective rate review. States may also choose or feel pressure to take on Essential Community Provider (ECP) review authority, including for new non-network plans. Accepting that responsibility requires legal authority, staff capacity, and technical infrastructure. 

At the same time, states may need to stand up the State Exchange Improper Payment Measurement (SEIPM) program, which CMS acknowledges will increase administrative burden. 

The proposed State Exchange Enhanced Direct Enrollment (SBE-EDE) option is also a significant shift. Rather than operating a centralized consumer enrollment platform, Marketplaces would focus on certifying, overseeing, and monitoring multiple third-party entities. As a former director of a state-based Marketplace program, I know this is a fundamentally different operational posture that comes with oversight and compliance costs. 

Q: The proposal also introduces non-network plans. What should stakeholders be watching here? 

Michael: Non-network plans may offer lower premiums, but they change how access works. Provider participation depends on the willingness to accept the plan’s payment as payment in full. On paper a plan may meet access standards, but in practice consumers could face difficulty finding care. That places additional oversight responsibility on states to determine whether access is sufficient in practice. If aggressively priced non-network plans disproportionately attract healthier enrollees, it can create financial risk for issuers and for the broader market. 

Q: What does this mean for market stability going forward? 

Zach: Stability will vary by state. States that invest in oversight, consumer assistance, and operational readiness—often a state-based Marketplace—may be better positioned to manage these changes. Others may see sharper enrollment declines or access issues. That divergence across states is an important signal from this proposal. 

Q: What should states and stakeholders be doing right now? 

Zach: States should be doing scenario planning, assessing which flexibilities to adopt, where to maintain higher standards, and whether they have the capacity to take on expanded responsibilities. These decisions will shape how the rule plays out on the ground. 

Michael: Issuers should be stress testing pricing assumptions, risk adjustment exposure, and operational readiness. All stakeholders should remember that comments on the proposed rule are due March 13, 2026. 

Lina: Notably, CMS is not done with regulatory reforms. The agency solicited comment on medical loss ratio (MLR) policies and paused Essential Health Benefit benchmark updates, as well as issues not covered in this proposed rule, such as revisions to the Section 1332 waiver and Section 1333 interstate compacts. States and issuers should be tracking what may come next, not just what’s in this proposal.

The Value Shift in Medicare Advantage: What 2026 Benefits Tell Us About the Market’s Next Chapter

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The Medicare Advantage (MA) program continues to evolve as plans respond to shifting policy signals, market pressures, and beneficiary expectations. A new paper from Wakely, an HMA Company—The Value Shift: How Medicare Advantage Benefits Are Evolving for 2026—provides a data-driven examination of how MA benefit designs are changing and what those changes signal about the future direction of the program. 

This paper refreshes Wakely’s ongoing MA benefit analysis, updating prior findings with the latest 2026 plan enrollment data. It builds on Wakely’s established work examining benefit design, supplemental offerings, and the relationship between bids, rebates, and plan value, including The Value Shift: Inside the C-SNP Surge. 

This article highlights findings from the proprietary value-add metric that Wakely developed to provide a comprehensive assessment of MA plan value. Although it can be used as a comparative metric to evaluate relative changes year over year, it is not intended to represent pricing. 

From Benefit Expansion to Optimization 

Over the past decade, MA plans have steadily expanded benefit offerings, supported by strong enrollment growth and favorable rebate dynamics. The 2026 benefit landscape suggests that plans have been taking a more measured approach (see Figure 1). Wakely’s analysis finds that plans are becoming more strategic in how benefits are designed and deployed, maintaining or enhancing benefits that are best aligned with quality performance, affordability, and target populations while pulling back in other areas. 

Plans appear to be optimizing benefits to better align with member needs, quality performance, and financial parameters. Examples include refining supplemental benefits, adjusting cost-sharing structures, and rethinking how benefits support care management and health outcomes. 

Figure 1. Change in Plan Value-Add from 2025 to 2026

 The shift reflects an MA market in which differentiation and long-term sustainability are increasingly important. 

Supplemental Benefits: More Targeted, More Strategic 

Supplemental benefits remain a defining feature of Medicare Advantage, but their role is evolving. Wakely’s paper highlights a move away from expanding the number of benefits toward targeted benefit offerings that are more clearly connected to member engagement and outcomes. 

Plans are homing their focus on benefits that support daily living, chronic condition management, and access to care, particularly for populations with higher needs. This targeted approach suggests plans are thinking about value, operational complexity, and how benefits contribute to overall value propositions. 

Between 2025 and 2026, the percentage of members with access to common supplemental benefits has, on average, stayed consistent or slightly decreased among the general enrollment population (Figure 2). The percentage of members who are enrolled in plans that offer over-the-counter (OTC) drug, transportation, and Flex Card benefits has decreased by 11 percent, 6 percent, and 4 percent, respectively. Conversely, the Dual Eligible Special Needs Plan (D-SNP) population saw an increase in member access to all supplemental benefit categories except transportation (an 8% decrease). 

Figure 2. Percent of Enrollment in Common Supplemental Benefits 

For stakeholders across the healthcare ecosystem, this trend underscores the importance of understanding not just what benefits are offered, but why. 

Shifts in Cost Sharing and the Enrollee Experience 

Wakely’s analysis also points to notable shifts in cost sharing and premium structures. There is continued attention to balancing affordability for members with the need to manage plan liability amid changing benchmarks and utilization patterns. 

These decisions directly affect the member experience. Small shifts in copays, deductibles, or benefit limits can influence enrollment, retention, and satisfaction, particularly in competitive markets. As plans fine tune these levers, data-driven insights become critical to understanding how benefit changes may resonate with different member segments. 

2026 Signals for Future Bid Cycles 

The benefit trends identified in “The Value Shift” series suggest several broader signals for the MA market: 

  • Value over volume: Plans are prioritizing benefits that support quality, outcomes, and sustainable growth. 
  • Greater segmentation: Benefit designs are increasingly tailored to specific populations and market dynamics. 
  • Data-informed decision-making: As margins tighten, plans are relying more heavily on analytics to guide benefit strategy. 
  • Special needs plans continue to drive growth. Enrollment in Chronic Condition Special Needs Plans (C-SNPs) is the fastest-growing segment in MA. 

These dynamics have implications for MA organizations and for providers, policymakers, and partners seeking to understand how MA continues to shape care delivery and costs. 

Value-Add Metric and Benefit Design Insights 

In this paper, Wakely paired its actuarial and analytic expertise with tools that enable detailed benefit and market analysis. One of those tools, Wakely’s Medicare Advantage Competitive Analysis Tool (WMACAT), calculates a comprehensive value-add metric that integrates five core components into a consistent framework that allows for apples-to-apples comparisons across plans, markets, and years. In addition, Wakely’s Strategic Market Analysis and Ranking Tool (SMART) supports broader competitive assessments by layering enrollment weighting, geographic variation, and plan positioning into the analysis. 

As an HMA company, Wakely’s work is complemented by broader policy, market, and strategy expertise, helping organizations connect benefit decisions to regulatory developments, operational considerations, and long-term goals. 

For health plans and healthcare organizations navigating the next phase of Medicare Advantage, these combined capabilities can respond to questions such as: 

  • How competitive is our benefit design today, and where are the risks? 
  • Which benefits are most aligned with our population and quality strategy? 
  • How might future policy or payment changes affect benefit sustainability? 

Looking Ahead 

MA benefit design remains an important signal of market direction by showing how plans are responding to policy change, market competition, and financial pressure. As plans shift from broad expansion to more targeted value strategies, the ability to measure, compare, and interpret benefit changes becomes essential as plans look ahead to the 2027 and 2028 bid cycles. 

Wakely will continue to build on this work with upcoming analyses, including deeper dives into Part D design changes and the implications of the sunset of the Value-Based Insurance Design (VBID) program. 

For information about this analysis and the Wakely tools, contact Dani Marino and Amanda Nelessen. 

2027 NBPP Proposed Rule Signals Further Marketplace Changes

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The Centers for Medicare & Medicaid Services (CMS) 2027 Notice of Benefit and Payment Parameters (NBPP) proposed rule, published February 11, 2026, arrived at a pivotal moment for the Affordable Care Act (ACA) Marketplaces. The temporary enhanced premium tax credits (ePTCs), first expanded in 2021 and extended through 2025, expired at the end of last year, returning Marketplace subsidies to their original ACA structure in 2026. As we discussed in earlier articles (here and here), that shift is already affecting affordability, plan selection, and enrollment dynamics—particularly for consumers who are ineligible for premium assistance. 

The proposed 2027 NBPP represents a significant reset for the Marketplace, reflecting CMS vision and policy priorities to strengthen program integrity while expanding plan design flexibility and consumer choice as a pathway to affordability, as well as policies to defer to state authority. Healthcare organizations and other interested stakeholders may submit comments on the proposed rule through March 13, 2026. 

The remainder of this article addresses the key policy proposals and considerations for issuers, states, and consumer groups. 

CMS’s Proposals 

The proposed NBPP for 2027 sets standards for the Exchanges and ACA-compliant individual and small group markets and updates payment parameters for risk adjustment and risk adjustment data validation (RADV). The rule also implements changes approved under the 2025 Budget Reconciliation Act, (P.L. 119-21, OBBBA) and includes a range of policies spanning plan certification, eligibility and verification, and Exchange oversight. 

Expanded Plan Design Flexibility 

CMS proposes to discontinue standardized plan options in the Federally-facilitated Marketplace (FFM) and remove limits on the number of non-standardized plans offered by issuers on the FFM and state-based Marketplaces on the federal platform (SBE-FPs). Issuers would be permitted to decide whether to discontinue existing standardized or chronic condition plans or continue them with modified cost sharing. 

Considerations: This change is designed to allow greater innovation in plan design. It also raises questions about the potential return of a more complex Marketplace shopping experience for consumers who will have to shift through more plans. 

Certification of Non-Network QHPs 

One of the most consequential proposals would allow “non-network” plans to be certified as qualified health plans beginning in 2027. These plans would not rely on contracted provider networks. Instead, they would set benefit payment amounts and require issuers to demonstrate that sufficient providers—including Essential Community Providers (ECPs) and mental health and substance use disorder providers—are willing to accept those amounts as payment in full. 

Considerations: CMS positions non-network plans as a way to create lower premium options. For states and issuers, this proposal introduces new oversight and operational considerations related to access standards, consumer protections, the risk of balance billing or access gaps for consumers, and potential market instability. 

Changes in Catastrophic and Bronze Cost Sharing 

The proposed rule would further expand access to catastrophic plans by codifying hardship exemptions for individuals ineligible for advance premium tax credits (APTCs) or cost-sharing reductions (CSRs) because of projected income. CMS also proposes to allow multiyear catastrophic plans with contract terms of up to 10 consecutive years. In addition, CMS proposes new flexibility for certain bronze plan designs in the individual market. In both cases, CMS proposes to allow catastrophic and bronze plans to exceed the annual maximum out-of-pocket limit. 

Consideration: These policies reflect CMS’s emphasis on affordability through lower premiums and expanded consumer choice, while shifting more financial risk to enrollees through higher cost sharing. 

Network Adequacy and Essential Community Providers 

CMS proposes to give states greater discretion in provider access for network adequacy and ECP certification reviews, including allowing federally funded exchange (FFE) states to conduct their own reviews if CMS determines they have sufficient authority and technical capacity. CMS also proposes to reduce the minimum percentage of ECPs that issuers must include in their networks from 35 percent to 20 percent. 

Considerations: These changes reduce federal prescriptiveness and could lower issuer compliance costs but also place more responsibility on states to monitor access and ensure that vulnerable populations are not adversely affected. 

Essential Health Benefits and State Mandates 

The proposed rule would prohibit issuers from including routine non-pediatric (adult) dental services as an Essential Health Benefit (EHB). More significantly for states, CMS proposes changes to cost defrayal requirements for state-mandated benefits, requiring states to cover the cost of benefits considered “in addition to EHB” under specified criteria, even if those benefits are embedded in the state’s EHB benchmark plan. 

Consideration: These changes could have direct budgetary implications for states, pricing implications for issuers, and could stunt or potentially decrease benefits for consumers. 

Program Integrity and Increased Eligibility Verification 

CMS includes a robust set of program integrity provisions, including: 

  • Strengthened standards for agent, broker, and web broker marketing practices 
  • Required use of a US Department of Health and Human Services (HHS)-approved consumer consent and application review form 
  • Codification of OBBBA policies and reintroduction of Program Integrity rule provisions not previously implemented, including expanded special enrollment period (SEP) verification and increased eligibility standards for enrollees applying for APTCs (see Navigating CMS’s 2025 Marketplace Rule: What It Means for ACA Marketplaces, Insurers, and Consumers) 
  • Implementation of the State Exchange Improper Payment Measurement (SEIPM) program for state-based Marketplaces 

Consideration: These policies continue CMS’s heightened scrutiny of enrollment activity and subsidy eligibility. CMS’s policies are likely to increase data matching issues (DMIs), which could increase burden on Marketplaces and enrollees, resulting in reduced enrollment. 

Preparing for Policy Driven Changes in ACA Marketplaces 

The 2027 NBPP underscores a clear policy shift away from extending federal subsidies toward advancing a Marketplace framework that emphasizes program integrity, state flexibility, and expanded plan design options as mechanisms to promote affordability and consumer choice. 

The proposed rule sets the stage for significant strategic and operational decisions for issuers and states ahead of the 2027 plan year. Health Management Associates (HMA), including Wakely, an HMA company, works with issuers modeling enrollment and risk shifts and to assist in pricing decisions. States also should consider the need for new strategies and approaches to adapt to federal policy changes that are expected for ACA Marketplace programs. 

For more information about the policies described in this article, support with scenario-based modeling of enrollment and data-informed strategy development for 2027 and beyond, please contact our experts Michael Cohen, Lina Rashid, or Zach Sherman. 

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