On the heels of the Final Rule, CMS just made another big announcement: Medicare Advantage and Part D payments will increase by 2.48% for 2027, a significant jump from the paltry 0.09% proposed back in January.
What drove the increase?
1. CMS decided to give the market more time to adapt to the v28 risk adjustment model, instead of introducing a new model that would have recalibrated payments.
2. Final Q4 2025 data showed traditional Medicare incurred more spending per person than projected, justifying a higher baseline for MA payments.
Beyond the higher rate, the announcement contained another welcome change: it restricts payments for diagnoses from chart reviews that are not linked to actual care delivered.
Between this announcement and the Final Rule, it's great to see CMS taking aim at systemic issues that have long contributed to wasteful spending.
All in all, the 2027 rate increase strikes a reasonable balance. While not as high as previous years, it will help the market to continue delivering quality care this plan year while cracking down on behavior that fails to improve outcomes.
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