Proposal Includes Flat MA Payment Rate Increase, Risk Adjustment Changes for 2027
- January 30, 2026
The Centers for Medicare & Medicaid Services (CMS) said Medicare Advantage (MA) plans would see a net average payment increase of 0.09%, roughly $700 million, in calendar year (CY) 2027 under a proposal issued January 26.
“When considering estimated risk score trend in MA driven by coding practices and population changes, the expected average change in payments will be 2.54%,” CMS said in a fact sheet on the CY 2027 Advance Notice of Methodological Changes for Medicare Advantage Capitation Rates and MA and Part D Payment Policies.
The proposed rate update is far below the 5% average increase that was finalized for 2026.
CMS also is proposing to update the Part C risk adjustment model, version 28, which was implemented in 2024, with recent data from original Medicare “to reflect more current costs associated with various diseases, conditions, and demographic characteristics,” the agency said.
Notably, the Advance Notice also calls for excluding diagnosis information from unlinked chart reviews—i.e., those not associated with a specific beneficiary encounter—from risk score calculations starting in CY 2027. Under this proposal, “diagnoses that are not reported or associated with a service would not be considered for risk adjustment,” CMS said.
The agency said it wants to improve the MA risk adjustment system to reduce administrative burden for plans and providers; spur competition on creating value for patients; and ensure payments accurately reflect beneficiary health risk, the efficient use of resources, program integrity, and accountability.
According to CMS, the changes would help mitigate “unnecessary cost growth from coding practices that do not lead to better quality coverage.”
Comments on the Advance Notice are due February 25. The final rate announcement will be published on or before April 6.
“Health plans welcome reforms to strengthen Medicare Advantage. However, flat program funding at a time of sharply rising medical costs and high utilization of care will impact seniors’ coverage. If finalized, this proposal could result in benefit cuts and higher costs for 35 million seniors and people with disabilities when they renew their Medicare Advantage coverage in October 2026,” AHIP spokesperson Chris Bond said in a statement.