CMS Releases the 2027 Medicare Advantage Rate Announcement

CMS has finalized the Calendar Year 2027 Medicare Advantage (MA) Rate Announcement, and the updates bring a mix of stability, discipline, and continued pressure for accurate risk adjustment.

Key Takeaways for Risk Adjustment Teams

1. Payment Increase: +2.48% Overall

CMS finalized an average 2.48% increase in MA payments, a significant improvement from the +0.09% proposed in the Advance Notice.

When factoring in expected coding trends, the total impact is closer to +4.98%.

2. No New Risk Adjustment Model for 2027

One of the biggest shifts: CMS decided not to implement a new HCC risk adjustment model for 2027.

This removes what would have been a major revenue headwind and gives plans more time to stabilize after recent V28 changes.

3. Normalization Factor Still Creates Pressure

Even without a new model, CMS updated the normalization factor, resulting in a –1.12% impact on risk scores.

Normalization continues to be one of the biggest downward pressures on RAF.

4. Chart Review Policy Finalized

Starting in 2027, CMS will exclude diagnoses from unlinked chart reviews from risk score calculations—
with one exception: members switching MA plans may still have unlinked chart review diagnoses counted.

This reinforces CMS’s push for documentation tied to face‑to‑face care.

5. Growth Rate Increased to 5.33%

CMS updated the Effective Growth Rate from 4.97% to 5.33%, reflecting newer FFS Medicare data.

This is a major driver of the improved final payment outlook.

What This Means for Providers & Risk Adjustment Teams

• Documentation accuracy matters more than ever as CMS tightens rules around chart reviews and encounter sources.

• RAF stability improves with no new model rollout, but normalization still requires strong recapture workflows.

• Provider education and operational alignment remain critical as plans prepare for 2027 bids.

• Teams must focus on defensibility, not volume—CMS is clearly signaling a long‑term shift toward precision.