The 2027 MA rule shifts UM accountability from ratings to audits

The 2027 MA rule shifts UM accountability from ratings to audits. CMS released its contract year 2027 Medicare Advantage and Part D final rule in April 2026, and for utilization management the headline is a set of removals. Plans’ utilization management committees no longer need a health equity expert, and plans no longer need to run and post an annual health equity analysis of prior authorization. And starting with the 2029 Star Ratings, the 2 measures that track how plans handle appeals will no longer count toward a plan’s rating.

CMS was explicit that the underlying obligations remain. Plans must still decide appeals on time and decide them correctly, and the agency said it will keep calculating the appeals measures and display them publicly while it monitors plan behavior. What changes is the mechanism. For appeals in particular, accountability moves from a score that affects a plan’s quality bonus to compliance oversight that operates case by case.

Our January piece on utilization management committee rules and our February analysis of the first equity reports both anticipated this outcome.

Key takeaways

• Equity requirements are gone. Utilization management committees no longer need a member with health equity expertise, and plans no longer must conduct or post annual health equity analyses of prior authorization.
• Appeals leave the star ratings. Plan Makes Timely Decisions about Appeals and Reviewing Appeals Decisions will not count toward Star Ratings starting in 2029, though CMS will still calculate and display them.
• Obligations do not change. Appeal deadlines remain in force, along with the rest of the utilization management rules adopted since 2024.
• The core UM rules stand. The 2026 decision timeframes and 2027 API requirements are untouched, as are the 2024 rules on committee review and coverage criteria.
• Some proposals were left for later. CMS did not finalize a special enrollment period for enrollees whose provider leaves a network, and it did not revive the artificial intelligence guardrails it declined to finalize a year earlier.
• Plans should keep measuring. The cheapest protection against compliance findings is the same data the removed measures used to reward.

What the rule changed for utilization management

The CMS fact sheet groups the utilization management changes under efforts to reduce administrative burden. The rule eliminates the health equity requirements for utilization management committees that were adopted in the contract year 2025 rule. In practice, committees no longer need a member with expertise in health equity. Plans also no longer need to conduct an annual, plan-level health equity analysis of their use of prior authorization or to post it on their websites.

A related change removes the requirement that Medicare Advantage quality improvement programs include activities specifically designed to reduce health disparities.

According to Applied Policy’s summary, CMS described the annual analysis as burdensome and as providing no meaningful additional information. The finalized policies take effect in June 2026 and apply to coverage beginning in January 2027.

The outcome was well signaled. CMS had said in June 2025 that it would not enforce the equity requirements, and it proposed their removal in November 2025. Our review of the first posted analyses found that the required metrics, which pooled every service into one plan-level rate, produced near-identical numbers for enrollees with and without social risk factors and could not have revealed much in any case. CMS’s conclusion that the analysis added little is consistent with what those first reports showed. Whether the right response was to remove the analysis or to redesign it is a question the rule settles in favor of removal.

How the rules have moved since 2024

The 2027 rule is the latest of 5 rulemakings in 3 years that have shaped utilization management in Medicare Advantage.

Compiled from CMS fact sheets for each rule.

Read as a sequence, the direction is clear. The operational rules on how plans decide and how fast have accumulated and stayed. The equity reporting layer added in 2024 has been removed, and the financial signal attached to appeals performance is being withdrawn.

The appeals measures leave the star ratings

The more consequential change for utilization management may be in the Star Ratings. The final rule removes 11 measures that CMS considered focused on administrative processes or showing little variation among plans. Among them are the 2 Part C measures built on appeals.

• Plan Makes Timely Decisions about Appeals, which measures how often a plan decides members’ appeals within the required timeframes.
• Reviewing Appeals Decisions, which measures how often the independent review entity agrees with a plan’s decision to uphold a denial, a proxy for whether the plan’s decisions were fair.

Both measures draw on data from the independent review entity that handles the second level of Medicare Advantage appeals. When a plan upholds its own denial on reconsideration, the case goes to that entity automatically, which gives CMS an outside check on the plan’s decisions that does not depend on the plan’s own reporting.

Both removals take effect with the 2029 Star Ratings. The rule also removes Complaints about the Health Plan, Members Choosing to Leave the Plan, Customer Service and Rating of Health Care Quality, among others, starting the same year.

Compiled from the CMS contract year 2027 Medicare Advantage and Part D final rule (April 2026). Partial list of the 11 removed measures.

Star Ratings matter because they carry money. Plans rated 4 stars or higher receive quality bonus payments, and ratings affect enrollment through Medicare Plan Finder. A measure that counts toward the rating gives every plan a direct financial reason to perform well on it. A measure that is only displayed does not.

Commenters made exactly that argument. According to the final rule, many opposed removing the appeals measures on the grounds that Star Ratings are the primary enforcement mechanism for appeals performance, and that removing them would erode accountability. Others supported removal, arguing that the measures no longer meaningfully distinguished quality and were better suited to compliance monitoring. CMS sided with the second view. It responded that plan obligations to comply with appeals requirements still apply and that it will monitor plan behavior. It will also continue to calculate the 2 appeals measures and report them on its public display page.

The obligation to decide appeals on time and correctly does not change. The bonus attached to doing it well does.

There is a reasonable case on each side. Appeals measures have shown limited variation among plans, and a rating system crowded with measures that most plans pass can dilute the measures that do distinguish quality. On the other hand, appeals are where members recover from wrong denials. KFF’s analysis of 2024 data found that only 11.5% of denied prior authorization requests in Medicare Advantage were appealed, and that 80.7% of appeals were partly or fully overturned. A measure that rewarded timely and well-supported appeals decisions was one of the few places where a plan’s financial incentives pointed directly at getting those decisions right.

What stays the same

For all the attention to removals, most of the utilization management framework built since 2024 is unchanged. Plans should not read the 2027 rule as a general loosening.

Compiled from CMS fact sheets for the rules listed in the earlier table.

The contract year 2026 provisions deserve emphasis because they took effect only in January. According to the CMS fact sheet for that rule, a decision a plan makes while an enrollee is receiving services, such as during an inpatient stay, is an organization determination subject to the full appeals process. And a plan that approves an inpatient admission may reopen that approval only for obvious error or fraud. Those rules govern concurrent review directly, and nothing in the 2027 rule touches them.

Likewise, the decision timeframes and public metrics from the interoperability and prior authorization rule remain the most demanding operational requirements most plans face this year, and the January 2027 API deadline is still on the calendar.

What CMS did not do

The 2027 rule is also notable for what it left out.

• No AI guardrails. In the contract year 2026 rule, CMS declined to finalize a proposal on guardrails for artificial intelligence in Medicare Advantage, along with a proposal to broaden the equity analysis. The 2027 rule did not revisit the AI proposal. CMS did, however, ask for information on modernizing risk adjustment, including a possible model built with artificial intelligence.
• No provider-termination enrollment period. CMS did not finalize a proposed special enrollment period for enrollees whose provider leaves the plan’s network, and said it would consider the idea in future rulemaking.
• No risk adjustment model change. Changes to the risk adjustment payment model were deferred to future rulemaking.
• No change to appeal rights. The rule did not alter the appeals process itself, from its timeframes to its notice requirements.

For utilization management, the absence of AI rules is the most significant gap. Plans using algorithms or AI in review remain subject to existing requirements, including that decisions rest on the individual enrollee’s circumstances and that adverse medical necessity decisions be reviewed by appropriate clinicians. The federal nondiscrimination rules we described in February also apply, as does a growing set of state laws. There is still no Medicare Advantage-specific federal rule on how AI may be used in coverage decisions.

What it means for plans

The practical message of the 2027 rule is that utilization management performance will be judged less through public scores and more through audits and enforcement. That shift has consequences.

Measurement becomes a choice. When a measure counts toward Star Ratings, every plan tracks it closely. When it does not, some plans will track it less. The plans that keep measuring their own appeals timeliness and overturn rates will see problems before an auditor does.

Audit exposure stays high. CMS’s program audits of Medicare Advantage plans include a protocol for organization determinations and appeals that tests samples of real cases against the rules, including timeliness and whether the right clinician made the decision. Findings can lead to corrective action plans and civil money penalties. A plan that lets appeals performance slip because the rating no longer depends on it is still exposed to all of that, and audit findings arrive with less warning than a score.

Public scrutiny continues. The appeals measures will still appear on CMS’s display page, and the first public prior authorization metrics posted in March 2026 include the share of requests approved after appeal. Researchers and state regulators will keep reading both.

Equity questions do not disappear. Removing the analysis removes a reporting requirement, not the legal obligation to avoid discrimination. Plans remain subject to federal civil rights law, and a plan that cannot say whether its own processes treat groups of enrollees differently is in a weaker position if the question arises in an investigation or a lawsuit.

Where Redlake stands

We build tools health plans use in utilization review, and our view is that the measures CMS removed from the ratings remain the right measures to manage by. How quickly a plan decides appeals and how often independent reviewers agree with its decisions are direct evidence of whether the first decision was right. They do not need a star rating to be worth tracking.

The most useful version of those measures is more detailed than the Star Ratings ever were. Overturn rates by service and by reviewing clinician tell a plan where its first-level decisions are weakest. A service whose denials are frequently reversed is a candidate for revised criteria or for removal from prior authorization. A reviewer whose decisions are reversed more often than peers is a candidate for calibration, not blame.

Our rules are built for that kind of accountability. A clinician makes every denial, because a machine can say yes but only a person can say no. Every recommendation shows its reasons, in the form of the criteria applied and the facts from the record that met or missed them. Every decision can be reconstructed. When an appeal arrives, the reviewer can see exactly what the first reviewer saw and why the decision came out as it did, which makes the appeal faster and the answer easier to defend.

We also think plans should keep the analyses the rule no longer requires, in a form that is actually useful. A health equity analysis that breaks results down by service and appeal outcome, as we proposed in February, costs little to run when decisions are recorded properly. Whether or not a regulator asks for it this year, it answers a question plans should want answered about themselves.

What to watch in 2026

• Implementation. How CMS’s audit and monitoring approach to appeals evolves once the measures leave the ratings, and whether the display page becomes more prominent.
• Plan behavior. Whether appeals timeliness and independent review agreement rates change once they no longer affect bonuses.
• AI in coverage decisions. Whether CMS returns to the AI guardrails it set aside, and how state laws on AI in utilization review fill the gap in the meantime.
• Public metrics. What the first prior authorization metrics, posted in March, show about approvals after appeal, and whether CMS moves toward service-level reporting.
• The contract year 2028 proposal. Whether next fall’s proposed rule returns to the special enrollment period for provider terminations or proposes risk adjustment changes.

About this analysis

Basis. We reviewed the CMS fact sheet and final rule for contract year 2027, including its discussion of removed Star Ratings measures and public comments. Earlier rules are described from CMS fact sheets, and appeal statistics come from KFF’s analysis of 2024 prior authorization data.

Data notes. The table of removed measures is a partial list of the 11 measures the rule removes. Effective years refer to Star Ratings years as stated in the final rule. Descriptions of the appeals measures summarize what they measure and are not CMS’s technical specifications.

Sources. CMS, contract year 2027 Medicare Advantage and Part D final rule fact sheet and final rule (April 2026). Applied Policy (April 2026). CMS, contract year 2026 final rule fact sheet (April 2025). CMS, interoperability and prior authorization final rule fact sheet (January 2024). KFF (January 2026).

Frequently asked questions

Does the 2027 rule remove the health equity analysis of prior authorization?

Yes. The contract year 2027 final rule eliminates the requirement for a health equity expert on Medicare Advantage utilization management committees, along with the annual health equity analysis of prior authorization that plans had to post.

Which appeals measures leave the Star Ratings?

Plan Makes Timely Decisions about Appeals and Reviewing Appeals Decisions, both Part C measures, will no longer count toward Star Ratings starting with the 2029 ratings. CMS will continue to calculate them and display them publicly.

When do the changes take effect?

The finalized policies take effect in June 2026 and apply to coverage beginning in January 2027. The Star Ratings measure removals apply to the Star Ratings years listed in the rule, mostly 2029.

Do plans still have to meet appeals requirements?

Yes. CMS stated that plan obligations to comply with appeals requirements still apply and that it will monitor plan behavior. The rule does not change appeal timeframes or notices.

Did the rule add rules for AI in utilization management?

No. CMS did not finalize AI guardrails in the contract year 2026 rule and did not revisit them in 2027. Existing requirements for individualized decisions and clinician review of adverse medical necessity decisions still apply.