TL;DR: Key Takeaways
- The RxHCC model for 2026 has been recalibrated to reflect lower drug costs from Medicare price negotiations
- TrumpRx is a new federal direct-to-consumer platform launching in early 2026, offering prescription drugs at reduced prices through deals with pharmaceutical manufacturers like Eli Lilly and Novo Nordisk
- Risk scores for conditions treated by negotiated medications will decrease, affecting plan liability and revenue projections
- Medicare will cover obesity medications for adults for the first time, with beneficiaries paying $50 monthly
- Risk adjustment teams must prepare for 100% V28 model implementation starting January 2026
- Once live, the prices Americans pay for GLP-1 drugs like Wegovy and Zepbound will drop significantly through these new programs
- The CY 2027 proposed rule includes 12 fewer Star Ratings measures and an RFI on future MA program changes
Table of Content
- Introduction: A Changing Drug Pricing Environment
- What Is the RxHCC Model?
- What Is TrumpRx and How Does It Work?
- How Will Drug Pricing Deals Affect Risk Scores?
- Key Changes for 2026 Risk Adjustment
- What Risk Adjustment Teams Should Do Now
- CY 2027 Proposed Rule: What Else Is Coming
- Conclusion: Preparing for a New Era
Introduction: A Changing Drug Pricing Environment
The prescription drug market in America is shifting. New federal initiatives aim to lower prescription drug costs for millions of Americans, and these changes directly affect how Medicare Advantage plans calculate risk and revenue.
For risk adjustment professionals, understanding the intersection of the CMS RxHCC model and emerging pricing programs like TrumpRx is essential. This guide breaks down what’s happening, why it matters, and how your organization can prepare.
What Is the RxHCC Model?
The Prescription Drug Hierarchical Condition Category (RxHCC) model is the risk adjustment model CMS uses to predict drug costs for Part D beneficiaries. This model determines how much Medicare pays plans based on the health status of enrolled members [1].
Here’s how it works:
Step 1: CMS assigns risk scores based on demographic data and diagnosed conditions
Step 2: Plans receive adjusted payments reflecting expected prescription drug spending
Step 3: Higher risk scores indicate members with greater anticipated drug costs
The RxHCC model ensures plans covering sicker patients receive appropriate payments to manage their care. For 2026, CMS has updated this model to reflect benefit changes required by the Inflation Reduction Act, including the $2,000 out-of-pocket cap for beneficiaries [2].
What Is TrumpRx and How Does It Work?
TrumpRx is a federal government direct-to-consumer platform set to launch in early 2026. The program will allow Americans to purchase select medications directly from drug manufacturers at substantially reduced prices [3].
The initiative stems from an executive order directing pharmaceutical manufacturers to offer the United States the lowest price they charge in other countries. This “Most-Favored-Nation” approach aims to ensure Americans no longer pay more than consumers in comparable developed nations.
Key features of TrumpRx include:
- Direct purchasing from participating pharmaceutical manufacturers
- Prices averaging 50% below current list price levels
- Access to medications for diabetes, obesity, heart disease, and other conditions
- Participation from major companies including Eli Lilly, Novo Nordisk, Pfizer, and AstraZeneca
The White House has announced deals with five pharmaceutical manufacturers to date, with more expected. These agreements will require companies to offer their medicines at prices matching the lowest price in other developed countries [4].
How Will Drug Pricing Deals Affect Risk Scores?
The connection between lower drug costs and the RxHCC model is significant. When prescription drugs cost less, the average spending CMS uses to calibrate risk scores decreases.
Impact on Plan Liability
CMS has already incorporated Maximum Fair Prices from the Medicare Drug Price Negotiation Program into the 2026 RxHCC model. This adjustment prevents overestimating plan liability for conditions treated with negotiated drugs [5].
What this means for plans:
- Lower coefficients for conditions associated with price-negotiated medications
- Higher coefficients for conditions not affected by negotiations (to maintain average risk score balance)
- Revenue projections may need recalculation based on your population’s condition mix
GLP-1 Medications and Metabolic Conditions
The deals with Eli Lilly and Novo Nordisk have particular relevance for diabetes and obesity risk scores. Under these agreements, once TrumpRx launches:
- Wegovy prices will drop from approximately $1,350 to $350 monthly through TrumpRx
- Zepbound prices will fall from over $1,000 to around $346 monthly
- Medicare beneficiaries will pay just $50 monthly for covered obesity medications
- State Medicaid programs will gain access to these medications at the lowest price available [6]
These anticipated reductions in what Americans pay for GLP-1 drugs will eventually influence how CMS calibrates future RxHCC models. Plans should monitor how their diabetes (RxHCC 15-19) and metabolic condition risk scores may shift in the coming payment years.
A Potential Data Visibility Gap
While RxHCC scores are calculated from diagnosis codes in medical encounters (not pharmacy claims), many plans use pharmacy claims data as an analytics signal to identify potential coding gaps. If a member fills a diabetes medication, it suggests they likely have a documentable condition [12].
TrumpRx introduces a potential blind spot. If beneficiaries purchase GLP-1 medications through the direct-to-consumer platform instead of their Part D benefit, those fills won’t appear in plan pharmacy data streams. Plans could lose visibility into the medication utilization patterns they currently use for prospective risk identification.
In the short term, plans may face challenges in detecting undocumented conditions through their standard pharmacy analytics. In the long term, if CMS integrates TrumpRx utilization data into risk adjustment reporting, this gap could stabilize. Until then, organizations relying heavily on pharmacy claims for suspect identification should consider strengthening their clinical documentation and encounter-based gap closure strategies.
Key Changes for 2026 Risk Adjustment
Complete V28 Implementation
Starting January 2026, Medicare Advantage plans will operate under the 100% V28 risk adjustment model rules. The transition period using blended V24/V28 scoring ends. This eliminates over 2,000 diagnosis codes previously accepted and reclassifies several condition categories [7].
Risk adjustment teams should ensure:
- Coding platforms display only V28 HCC codes alongside RxHCC codes
- Provider education materials reflect current model requirements
- Quality assurance processes validate V28-compliant documentation
Separate Normalization for MA-PDs and PDPs
CMS continues using different normalization factors for Medicare Advantage Prescription Drug plans versus standalone Part D plans. For 2026, MA-PD plans use a factor of 1.194 while PDPs use 0.887 [8].
This means identical beneficiaries generate different risk scores depending on plan type. Organizations operating in both markets must account for this variance in financial planning.
Expanded Medicare Coverage for Obesity Treatment
For the first time, Medicare will cover obesity medications for eligible adults starting mid-2026. Coverage applies to beneficiaries with:
- Severe obesity (BMI greater than 35)
- Overweight status with prediabetes or heart disease
- Obesity with kidney disease, heart failure, or uncontrolled hypertension
An estimated 10% of Medicare enrollees will become newly eligible for these treatments [9]. Risk adjustment teams should prepare for increased coding volume around obesity-related diagnoses.
What Risk Adjustment Teams Should Do Now
Audit RxHCC capture processes: Ensure clinical documentation supports diagnoses with appropriate MEAT criteria (Monitoring, Evaluation, Assessment, Treatment).
Update financial models: Recalculate revenue projections using 2026 RxHCC coefficients, especially for conditions associated with price-negotiated prescription drugs.
Train coders on V28 requirements: Focus on conditions that changed classification, particularly diabetes, depression, and vascular disease.
Prepare for obesity coding volume: Medicare coverage expansion for weight-loss medications will drive increased documentation activity.
Consider AI-powered solutions: Technology that identifies RxHCC-relevant diagnoses with transparent, audit-defensible evidence helps maintain accuracy as model complexity grows.
CY 2027 Proposed Rule: What Else Is Coming
While the focus of this article is on the RxHCC model and drug pricing, risk adjustment professionals should also monitor the CMS Contract Year 2027 proposed rule released on November 28, 2025.
Key developments include:
- CMS proposes removing 12 Star Ratings measures to reduce administrative burden and focus on clinical outcomes and patient experience [10]
- The agency will not implement the Health Equity Index reward and will continue using the historical reward factor
- A new Depression Screening and Follow-Up measure will begin with 2029 Star Ratings
- CMS has issued a Request for Information seeking public feedback on modernizing MA, including options for refining risk adjustment and quality bonus payments [11]
Comments on the proposed rule are due January 26, 2026. While these changes primarily affect quality measurement rather than risk score calculation, they signal continued regulatory evolution across the Medicare Advantage program.
Conclusion: Preparing for a New Era
The convergence of federal drug pricing initiatives and risk adjustment model changes makes 2026 a pivotal year for Medicare Advantage plans. Lower prescription drug costs benefit American families but create new complexity for risk adjustment teams.
Organizations that understand these dynamics will maintain revenue integrity while ensuring compliance. Accurate, documented, and defensible coding remains the foundation of success.
Frequently Asked Questions
RxHCC stands for Prescription Drug Hierarchical Condition Category. It’s the risk adjustment model CMS uses to predict Part D drug costs based on diagnoses and demographics.
The 2026 CMS-HCC model operates at 100% V28. This model predicts medical (Part A and B) costs, while the RxHCC model predicts prescription drug (Part D) costs.
Once TrumpRx launches, Wegovy prices are expected to drop to approximately $350 monthly for direct purchases and $245 for Medicare. Beneficiaries would pay a $50 monthly copay.
Once TrumpRx launches, Zepbound prices are expected to fall to an average of $346 monthly. Medicare beneficiaries would pay $50 monthly for covered uses, including diabetes and obesity.
When drug costs decrease, CMS adjusts the RxHCC model coefficients accordingly. Conditions treated primarily by lower-cost medications will have reduced risk score contributions, potentially affecting plan revenue.
No. The 2026 RxHCC model uses 2022-2023 calibration data predating these deals. TrumpRx is expected to launch in early 2026, and if lower prices persist, they will influence future model updates.
Conditions associated with the ten drugs selected for Medicare negotiation, including heart disease (Entresto), diabetes, and certain cancers, have adjusted RxHCC coefficients for 2026.
Source References
[1] CMS, “Medicare Advantage and Part D Risk Adjustment Overview,” cms.gov, 2025
[2] CMS, “2026 Medicare Advantage and Part D Advance Notice Fact Sheet,” cms.gov, January 2025
[4] KFF, “FAQs on Prescription Drug Pricing Policies,” kff.org, 2025
[5] CMS, “Part D Risk Adjustment Model Updates,” cms.gov, 2025
[6] American Journal of Managed Care, “GLP-1 Drug Pricing Developments,” ajmc.com, November 2025
[7] CMS, “CY 2026 Final Rate Announcement,” cms.gov, April 2025
[8] CMS, “Part D Normalization Factors for 2026,” cms.gov, 2025
[9] Health Affairs, “Medicare Coverage Expansion for Obesity Treatments,” healthaffairs.org, 2025
[12] Oliver Wyman, “A First Look At The 2025 Medicare Part D Risk Score Model,” oliverwyman.com, 2024
About the author
Wynda Clayton
Director of Risk Adjustment Coding & Compliance
Wynda is a recognized leader with over 20 years of experience in risk adjustment, coding, and compliance. A seasoned RADV auditor and educator, she focuses on maximizing coding accuracy and maintaining regulatory standards. At RAAPID, Wynda spearheads AI-driven initiatives to enhance value-based care delivery and reimbursement accuracy.
