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Comment: A commenter requested that CMS address how much of the $4.2 billion in suspended catheter claims was included in the non-ESRD 2023 FFS Part B USPCC published in the CY 2025 Rate Announcement. Response: Experience supporting the 2023 non-ESRD USPCC reflected $2.5 billion in submitted urinary catheter claims in the CY 2025 Rate Announcement. An adjustment of -$1.8 billion was made to the 2023 USPCC published within the CY 2025 Rate Announcement; this adjustment was made to account for the suspension of payments for a portion of these claims. Likewise, this CY 2026 Rate Announcement reflects $3.5 billion in submitted urinary catheter claims for 2023, due to higher than anticipated fourth quarter claims submission for these services. The 2023 USPCC within this CY 2026 Rate Announcement includes a revised adjustment of -$3.5 billion to account for the suspended payment of claims, largely based on more complete financial reporting on CMS program integrity activities. Comment: A few commenters urged CMS to incorporate changes to the Medicare wage index implemented in the FY 2024 IPPS into the CY 2026 county-level FFS costs. These commenters indicated that changes to the hospital wage index made between the proposed and final FY 2024 IPPS rule resulted in significant payment increases to hospitals in certain regions of Upstate New York and California that were not reflected in payments to plans, straining MA plans in those areas. The commenters recommended that CMS use its authority under section 1853(c)(6) and 1853(c)(2) of the Act to adopt an area-specific approach for correcting prior year rates, including those for CY 2025, for under- and over-projections of growth. A couple of these commenters also requested that CMS provide information in the Rate Announcement describing how CMS has addressed this concern and the impact of any adjustments on MA benchmarks, such as how changes made to the index as part of the IPPS are reflected in the proposed 2026 county-level FFS costs. Additionally, a commenter suggested that CMS should consider the broader impact that wage index changes have had on hospital rural reclassification. Response: CMS appreciates the concerns raised by commenters. As discussed in past Rate Announcements,7 given that MA county rates are based on FFS costs, we believe it is important to update the FFS per capita cost estimates using the most current FFS data available at the time those values are announced and apply repricing adjustments to reflect changes in FFS payment rules. The CY 2026 USPCC projections reflect payment levels based on the most recent Medicare final rules for FY 2025 or CY 2025. Section 1853(b)(1) of the Act prescribes the timing of the release of the MA capitation rates for the contract year and the risk and other factors to be used in adjusting such rates.

7 Please refer to previous Rate Announcements available at https://www.cms.gov/medicare/payment/medicare-advantage-rates- statistics/announcements-and-documents.