To amend title XVIII to reform the Medicare Advantage program.

This bill reforms the Medicare Advantage program under title XVIII of the Social Security Act. It requires capitated payments, modifies payment benchmarks and risk adjustment, eliminates quality bonus increases, allows stop-loss payments, establishes automatic enrollment and mandatory continuous enrollment, requires inclusion of hospice care, and creates a Stark law exception for certain services.

Sec. 1, Reforming Medicare Advantage: The bill adds a new subsection requiring Medicare Advantage plans to pay for benefits on a capitated basis starting in 2028, with exceptions for plans only available to previously enrolled individuals and specialized plans for special needs individuals.

Payment modifications: Starting in 2028, the blended benchmark amount is reduced to 75 percent of 1/12 of the amount. Risk adjustment for health status must use only diagnoses from face-to-face or telehealth visits, not from chart reviews or stand-alone health risk assessments, and must use a 2-year lookback period. No quality bonus increases apply to qualified MA plans for plan years beginning on or after January 1, 2028. The Secretary may establish stop-loss payments for plans with significantly higher expenditures, based on auditable encounter data, in a budget-neutral manner.

Automatic enrollment and plan change limitations: Starting in 2028, the Secretary must automatically enroll eligible individuals into the MA plan with the lowest premium, with an opt-out option. Individuals enrolling in an MA plan for plan years beginning on or after January 1, 2028, cannot change plans or switch to traditional Medicare for 3 years, except in cases of hardship such as serious illness.

Required inclusion of hospice care: For plan years beginning on or after January 1, 2028, Medicare Advantage plans must include hospice care, removing the previous exception that allowed plans to exclude it.

Stark exception: A new exception to the physician self-referral law allows referrals for durable medical equipment and Part D drugs if furnished under an MA plan.