CMS proposes nearly flat Medicare Advantage payments for 2027: 6 notes

CMS proposed its 2027 Medicare Advantage and Part D capitation rates and payment policies Jan. 26, putting forth a slowdown in payment growth after a $25 billion boost for 2026.

Six things to know:

1. The proposed policies would result in a net average year-over-year payment increase of 0.09%, or roughly $700 million in MA payments for 2027. For 2026, CMS finalized a 5.06% increase worth $25 billion.
   
   
2. CMS is proposing to exclude diagnosis information from “unlinked chart review records,” which are diagnoses not associated with a specific beneficiary encounter, from risk score calculations starting in 2027. The agency said plans that rely more heavily on unlinked chart reviews to report risk-adjustment eligible diagnoses will see a greater payment impact.
   
   
3. “These proposed payment policies are about making sure Medicare Advantage works better for the people it serves,” CMS Administrator Mehmet Oz, MD, said in a news release. “By strengthening payment accuracy and modernizing risk adjustment, CMS is helping ensure beneficiaries continue to have affordable plan choices and reliable benefits, while protecting taxpayers from unnecessary spending that is not oriented towards addressing real health needs.”
   
   
4. CMS outlined three principles guiding its approach to risk adjustment: simplicity to reduce administrative burden, competition on creating value for patients regardless of plan size, and payments that accurately reflect beneficiary health risk.
   
   
5. Insurer groups have criticized the proposed rates as insufficient. AHIP warned that flat funding “at a time of sharply rising medical costs” could lead to benefit cuts and higher costs for MA enrollees. The Alliance of Community Health Plans called the proposal “disappointing and wholly unrealistic,” though the group voiced support for the new chart review policy as a step toward curbing coding-driven payment differences. The Better Medicare Alliance said the proposal “falls short of what is needed to provide stability” for MA enrollees.
   
   
6. The comment period closes Feb. 25, with the final rate announcement expected by April 6.

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