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Robin Duddy-Tenbrunsel I'm Robin Duddy-Tenbrunsel. I am a principal in our policy practice and I am here with my colleagues, Kylie Stengel and Kirsten Stryker Blasch. We have been spending the past few days and dare I say nights digging into the final C& D rule and the rate announcement for 2026 and wanted to share some of our key takeaways. First, want to remind folks that we have been in a situation where all of these proposals were made under the Biden administration and have now been finalized under the Trump administration. So we were eager to see what policies might make it through, where there might be changes or where the new administration might decide not to finalize particular items. As a quick reminder, given the timeline here, looking at the administration coming in and taking office in January, and then still at a spot where not everyone has been fully seated at the Department of Health and Human Services, this rule perhaps does not reflect all of the priorities of the incoming Trump administration, but we can begin to see where some things may advance and where the administration may differ from the previous administration in terms of its vision for the Medicare Advantage and Part D programs. So we'll start on the Part D side, which people were quite eager to see where we would land on a couple of key proposals. Kylie, what did you think was notable? Kylie Stengel Yeah, so on the Part D side, I think two pieces probably getting the most attention were what the Trump administration was going to do with the proposed coverage of anti-obesity medications or AOMs, as well as the standalone PDP premium stabilization demonstration that was put in place in 2025 under the Biden administration. On the AOMs, CMS did not finalize the proposal to allow for coverage of AOMs for obesity in Medicare or Medicaid. And like other policies in the rule that were not finalized, they didn't really provide any commentary on their decision here. But given the administration's Make America Healthy Again priorities as well as their focus on chronic disease, I definitely don't think this is an area where the door is closed on the issue of AOMs and obesity and Medicare, this could potentially be addressed through maybe a demonstration or other regulatory actions in the future with some potentially interesting interplay with Medicare negotiation, given that some of has been selected for negotiation for 2027, but other AOMs have not yet been selected. So definitely an area to watch for on the AOMs. On the PDP premium stabilization demonstration, CMS definitely left a lot of open questions about the future of that demonstration with their commentary that they would evaluate the effectiveness of or the need for the demonstration for 2026, and that plans potentially may have gained experience from 2025 in order to base their 2026 bids. So CMS also noted their authority to negotiate the terms and conditions of submitted bids. So it will definitely be interesting to see how much back and forth CMS may have with plans during the bid submission process and whether, based on 2026 bid submissions, whether they feel that some aspects of the demo may still be needed, and also how much they may be looking at the PDP market. Of course, there's more favorable terms for MAPDs as well, so definitely something that we'll have to wait and see come the summer when the national average bid amount is due. But Kirsten, definitely interested to hear on the MA side what the administration is thinking there. Kirsten Stryker Blasch Yeah, so the most notable thing from the Medicare Advantage side of the equation is the estimate for the increase in plan payments from 2025 to 2026. In 2026, CMS is estimating that plan payments will increase by just over five percent, and that includes a effective growth rate of just over nine percent. That nine percent is an increase of three percentage points from the effective growth rate in the advanced notice. So while this seems like great news for the MA plans, one thing to keep in mind is that the new effective growth rate includes data on fee-for-service payments through the end of calendar year 2024. And in the past few years, health plans have been commenting through their earnings calls that utilization has been increasing. So it's expected that the increase in the effective growth rate is intended to make up for the increases in utilization that plans have been seeing over time. But with this good news on the payment rates, one thing we need to keep in mind is the Trump administration's focus on fraud, waste and abuse, and part of that conversation is around risk adjustment. There's been estimates out of MedPAC and others of plan over payments due to coding differences, and we could see the administration focus their efforts there. As far as anything that came out of the C& D rule or the final rate notice, the only thing we really saw besides finalizing the full transition to the V28 risk adjustment model is some comment from CMS on whether or not they'd like to transition the risk adjustment model to be based off of MA encounter data. In the advance notice, the CMS had indicated that they might begin a transition as soon as next plan year, 2027. But in the final rate notice, CMS did not commit to a timeline for transitioning to an MA-based risk adjustment model, just that they're committed to exploring that further in the future. Beyond risk adjustment and payment rates, Robin, did you see anything else in these two releases that interested you on the MA side? Robin Duddy-Tenbrunsel Indeed. So I think absolutely risk adjustment is going to be an area where everyone is going to be watching really closely over the next year to see where the administration may take action. I think STARS is another place that we were watching to see what might get finalized in these two regulations, but also if there's going to be any indication of where the administration might focus going forward since there has been such a conversation around quality within the program and thinking about if and how that can be modified going forward. So one thing I was looking for is the Biden administration had finalized a health equity index, which was set to start in future years. So the Trump administration is seeming to move forward with something similar, so some kind of index focused in on outcomes for beneficiaries who are duly eligible, eligible for LIS or who have a disability. But the administration is going to rename it The Excellent Health Outcomes For All, and that perhaps will be associated with a reward, although they did note that there are some areas that they are still revisiting, and the health equity index concept appears to be one of those along with perhaps future action related to artificial intelligence. And what we'll be looking to see there is how they balance perhaps some of those goals that we have seen previously from the past administration with perhaps a new focus around deregulation. So that's going to be an area to watch for 2025 and heading into 2026 for sure. So those are some initial reactions we have. If you have questions or thoughts, please reach out to us. We would really enjoy chatting more about these regulations and what else we're seeing as we follow the new administration in the year to come.