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risk scores was about 16 percent in 2022 and 2023, which is nearly twice the difference between PDP and MA-PD risk scores in 2020 (about 8 percent). Risk scores are intended to predict the expected cost of Part D enrollees relative to the average. The actual cost of providing benefits to enrollees in each sector of the Part D market is similar (average expenditures in 2023 were $2,780.77 for PDPs and $2,697.22 for MA-PD plans) despite the divergence in risk scores. Further, this accelerating divergence in risk scores between sectors is made more acute by the IRA’s changes to the Part D benefit, which greatly increased the risk borne by plan sponsors for the Part D benefit. Failing to account for differences in actuarial risk between PDPs and MA-PD plans as directed by the Act would lead to instability in the PDP market and fewer coverage options for enrollees. Comment: A couple of commenters agreed that the proposed method to apply separate normalization factors for PDPs and MA-PD plans appropriately accounts for the underlying risk score trend, which has been diverging for PDPs and MA-PD plans. A commenter stated this growing divergence suggests systematic differences in coding intensity and/or utilization patterns between PDPs and MA-PD plans that could lead to systematic, destabilizing underpayments for PDPs if not addressed. The commenter stated that separate normalization factors for the two sectors of the Part D market could help level the playing field between PDPs and MA-PD plans. Response: CMS thanks the commenters for their support. We are finalizing our proposal to apply separate normalization factors for standalone PDPs and MA-PD plans calculated with the multiple linear regression methodology as proposed. Section H. Source of Diagnoses for Part D Risk Score Calculation for CY 2026 CMS did not receive comments regarding sources of diagnoses for Part D risk scores for CY 2026 and is finalizing the policies as proposed. For non-PACE organizations, CMS will continue the policy first adopted for CY 2022 to calculate all risk scores for payment to Part D sponsors using only risk adjustment-eligible diagnoses from encounter data and FFS claims. For PACE organizations, CMS will calculate risk scores using 10 percent of the risk score calculated using encounter data and FFS claims only (under the 2026 RxHCC model (2022/2023 calibration)) and 90 percent of the risk score calculated using diagnoses from RAPS, encounter data, and FFS claims (under the 2026 RxHCC model (2018/2019 calibration)). Refer to Attachment III, Section O for comments and responses regarding sources of diagnoses for PACE risk scores.