CMS Releases CY 2027 Medicare Advantage and Part D Rate Notice  

The Centers for Medicare and Medicaid Services (CMS) released the Calendar Year (CY) 2027 Medicare Advantage (MA) and Part D Rate Notice. The Rate Notice, issued annually, issues updates to MA payment rates and finalizes technical updates to keep MA payments up-to-date and accurate.  

The CY 2027 rate notice included an effective growth rate of 5.33%, up from the 4.97% included in the Advance Notice. When coupled with additional changes to STAR ratings and changes to diagnostic sources, there is an expected average increase of 2.48%. This is a dramatic increase from the 0.09% average change expected in the Advance Notice. This is largely due to the CMS not moving forward with the proposal to update the MA risk adjustment model; specifically, the agency will not update from a 2018 and 2019 data set on diagnoses and expenditures to one based on 2023 and 2024 data. The CMS may revisit this in future rate notices; however, it is moving forward with excluding diagnostic information from unlinked chart review records as diagnostic sources allowed for risk adjustment in CY 2027. Based on these changes, plans are projected to receive an increase of over $13 billion in payments to MA plans in CY 2027.