With the April 6 release of the CMS 2027 Medicare Advantage (MA) Final Rule and Rate Announcement, the focus for risk adjustment teams is on compliance. After digesting and commenting on the Advance Notice released in January, MA plans are readjusting to the latest announcement. Changes from the Advance Notice include the continued use of the current CMS‑HCC V28 model versus recalibrating it with updated diagnosis and expenditure data, resulting in only a -1.12% impact related to fee-for-service (FFS) normalization rather than the originally proposed -3.32%. Combined, all provisions lead to an average 2.48% projected payment increase for 2027, up from 0.09% in the Advance Notice.
|
Impact |
2027 Advance Notice |
2027 Rate Announcement |
|
Effective growth rate |
4.97% |
5.33% |
|
Change in Star Ratings |
-0.03% |
-0.03% |
|
MA coding pattern adjustment |
0.00% |
0% |
|
Risk model revision and FFS normalization |
-3.32% |
-1.12% |
|
Sources of diagnoses |
-1.53% |
-1.53% |
|
Expected average change in revenue |
0.09% |
2.48% |
Figure 1. Percentage change in anticipated MA plan payments for 2027 in Advance Notice vs. Rate Announcement (Source: CMS fact sheet).
With these changes, MA plans are expected to see a larger payment increase than originally proposed in the Advance Notice, but CMS still reaffirmed its focus on coding discipline. The Rate Notice maintains key guardrails including the exclusion of diagnoses derived from unlinked chart review records from risk score calculations, with a narrowly defined exception for beneficiaries who change plans to minimize disruption. CMS also continues to scrutinize diagnosis sources viewed as vulnerable to upcoding, signaling that oversight remains a priority even as broader model changes were deferred.
These policies reflect CMS’s effort to balance near‑term program stability with a clear signal that future risk adjustment reform remains on the horizon. As such, 2027 is quickly becoming a year of preparation rather than complacency for MA organizations.
Webinar: Future-proof compliance and drive audit readiness
How can health plans strategize to approach these new expectations and other regulatory demands in the near future? As organizations balance member needs, audit readiness, and the responsible use of new tools, leaders need a proactive approach that strengthens data privacy, security, and accuracy—without slowing the business down.
Join me and my colleagues as we walk through all of these issues and more at our upcoming webinar, Risk Adjustment Essentials: Future-proof compliance and drive audit readiness. Attend our live webinar on Tuesday, April 28 as we explore:
- The impact of the CMS 2027 Medicare Advantage Final Rule and Rate Announcement and other key regulatory trends—and what they mean for compliance planning in 2026 and beyond
- Strategies to responsibly leverage AI technologies and digital innovation while protecting privacy and strengthening data integrity
- Practical ways to enhance products, workflows, and governance to drive audit readiness and reduce downstream risk
This webinar is the second installment in our Risk Adjustment Essentials webinar series. This ongoing program is designed to deliver timely insights for industry leaders, spotlighting the trends, innovations, regulatory changes, and best practices shaping risk adjustment throughout the year. Register for the full Risk Adjustment Essentials webinar series to stay current on key updates throughout the year, either live or on demand.