Value-Based Care Strategy Forum
CMS Proposes 2027 Medicare Advantage and Part D Payment Policies
What Health Plans, ACOs, and Risk Bearing Organizations Should Be Paying Attention To
The Centers for Medicare & Medicaid Services recently released its Calendar Year 2027 Advance Notice of Methodological Changes for Medicare Advantage and Part D. While the projected payment impact may appear modest at first glance, the policy direction behind the proposal is much more meaningful.
This is not just a rate update. It is another clear step by CMS to strengthen payment accuracy, reinforce program integrity, and ensure Medicare Advantage remains sustainable and centered on real clinical care.
You can read the full CMS announcement here:
CMS Proposes 2027 Medicare Advantage and Part D Payment Policies to Improve Payment Accuracy and Sustainability
https://www.cms.gov/newsroom/press-releases/cms-proposes-2027-medicare-advantage-part-d-payment-policies-improve-payment-accuracy-sustainability
A Small Payment Update With a Big Policy Message
If finalized, CMS estimates the proposed policies would result in a net average payment increase of approximately 0.09 percent, representing more than $700 million in additional Medicare Advantage payments for 2027.
Compared to the mid single digit updates seen in prior years, this may feel underwhelming. CMS has been clear, however, that this figure reflects updated cost trends, revised quality bonus values tied to the 2026 Star Ratings, and targeted refinements to risk adjustment methodology.
CMS Administrator Dr. Mehmet Oz emphasized that these changes are about ensuring Medicare Advantage works better for the people it serves, while avoiding overpayment tied to documentation practices that do not correlate with improved care.
This framing reinforces CMS’s intent to prioritize accuracy and sustainability over payment growth alone.
Risk Adjustment Is Being Recentered on Clinical Validation
One of the most consequential elements of the Advance Notice is CMS’s continued effort to modernize Medicare Advantage risk adjustment.
CMS proposes updating the risk model to better reflect current disease costs and demographic changes. More significantly, beginning in 2027, CMS would exclude diagnoses from unlinked chart review records from risk score calculations.
Unlinked chart reviews are diagnoses not tied to a documented clinical encounter. By excluding these diagnoses, CMS is signaling that risk scores must be grounded in active, documented care rather than retrospective chart abstraction.
Details on these proposed changes are included in the CY 2027 Advance Notice published by CMS:
https://www.cms.gov/medicare/payment/medicare-advantage-rates-statistics/advance-notices
The goal is to improve predictive accuracy, reduce administrative burden, and shift competition toward care value rather than documentation strategy.
Part D Updates Reflect a Changing Drug Benefit Landscape
CMS is also proposing updates to the Part D risk adjustment model to reflect prescription drug benefit changes under the Inflation Reduction Act.
These updates include separate calibration for Medicare Advantage prescription drug plans and standalone prescription drug plans. While technical, this change is intended to improve payment precision and support stable drug pricing for beneficiaries.
More information on the Part D methodology updates can be found in the Advance Notice Fact Sheet:
https://www.cms.gov/newsroom/fact-sheets/cy-2027-medicare-advantage-and-part-d-advance-notice-fact-sheet
Star Ratings and Quality Measures Continue to Evolve
The Advance Notice also outlines updates to Star Ratings, including refinements to measure specifications and adjustments tied to eligible disaster conditions.
Because Star Ratings directly affect quality bonus payments, these refinements reinforce the importance of accurate reporting and operational resilience across markets.
CMS Is Accepting Public Comment
CMS is accepting comments on the CY 2027 Advance Notice through February 25, 2026, ahead of the final Rate Announcement expected by April 6, 2026.
Stakeholders can submit feedback and review supporting materials through the CMS rulemaking portal:
https://www.cms.gov/medicare/payment/medicare-advantage-rates-statistics/2027-rate-announcement
Why This Matters for Value Based Organizations
While the projected payment increase is small, the direction is clear.
CMS is prioritizing payment accuracy, clinical substantiation, and longitudinal care. Organizations that rely on disconnected data, retrospective documentation, or fragmented workflows will face increasing pressure.
Success under these policies will depend on real time data access, interoperable systems, and a complete view of the patient across care settings.
How AaNeel Supports This Shift
AaNeel helps payer and provider organizations align with CMS’s direction by enabling real time interoperability, longitudinal data access, and clinically grounded workflows.
As payment accuracy and validation become central to Medicare Advantage sustainability, platforms that unify data without friction become a strategic advantage.
Learn more about how AaNeel supports value based care organizations here:
https://www.aaneel.com
