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• Explanation of how Medicare Secondary claims are handled when developing USPCCs and AGAs (e.g., any adjustments factors applied). • Details of projection methodology for Part B physician-administered drug spending, in particular any adjustments for changes to population morbidity and at what level of detail historical trends are analyzed and projections are calculated (e.g., by drug class). Response: We discussed in the CY 2026 Advance Notice the methodology, sources of data, assumptions, and trends underlying the MA capitation rates at a level of detail consistent with past practice. In support of the MA ratebook growth rates, CMS has, as required under section 1853(b)(3) of the Act, included an explanation of the assumptions and changes in methodology used in the CY 2026 Rate Announcement; see the key economic assumptions underlying the USPCCs included in Attachment II of this CY 2026 Rate Announcement. Consistent with prior years, with this CY 2026 Rate Announcement we have published additional information regarding trends for the prior five years and unit cost increases to the contract year at https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/FFS-Trends.html. This information includes additional details of drivers of historical and projected trends. For example, for inpatient prospective payment system (IPPS) experience, the exhibit includes experience and assumptions for unit costs, utilization, case mix, and the impact of COVID-19 morbidity. Additionally, the USPCC projections reflect payment levels based on the most recent Medicare final rules for fiscal year 2025 or calendar year 2025. The non-ESRD FFS USPCCs in the CY 2026 Advance Notice were based on actual spending and incurred experience through 4th quarter 2023 for Part A and 2nd quarter 2024 for Part B. The non-ESRD FFS USPCCs in the CY 2026 Rate Announcement are based on program experience through 4th quarter 2024 and incurred dates through 3rd quarter 2024. The estimate of excess morbidity on aggregate per capita Medicare FFS costs due to COVID-19 remain the same as the CY 2025 Rate Announcement USPCC baseline. The estimated impacts by year are:

The CY 2026 Advance Notice description of the development of Medicare enrollment assumptions from Social Security population projections are based on a more current baseline compared to the baseline supporting the CY 2025 Advance Notice. The underlying enrollment projections were not affected by the reported change in assumptions. 2021 2022 2023 2024 2025 2026 -2.50% -4.00% -4.40% -4.40% -3.90% -2.30%