CMS Releases 2027 Advance MA and Part D Rate Notice

On Jan. 26, the Centers for Medicare & Medicaid Services (CMS) released the CY2027 Medicare Advantage (MA) and Part D Advance Notice which provides preliminary estimates of payment changes in county benchmarks and proposes additional policies for the upcoming contract year.

CMS projects a net average year-over-year payment increase of 0.09% (essentially flat) – a notable decrease from last year’s 5.06% increase, which will significantly pressure the MA market. CMS is also proposing to exclude diagnosis information from “unlinked chart review records,” which are diagnoses not associated with a specific beneficiary encounter, from risk score calculations starting in 2027. CMS estimates the average impact of this change is -1.53% but acknowledges some plans will be impacted more than others.

CMS is proposing updates to the Part D risk adjustment model to reflect Inflation Reduction Act (IRA) changes that will be in effect in CY2027 and to recalibrate the model using more recent data. CMS also proposes to improve predictive accuracy by calibrating the model separately for MA-PD plans and PDPs, and to continue calculating separate normalization factors for each. This is a positive development and aligns with the types of improvements Cigna has been advocating for in the risk adjustment model. CMS remains silent on whether it will continue the premium stabilization demonstration for standalone plans. Government Affairs will evaluate the Advance Notice with the business to determine any next steps. The Final Notice is expected by April 6.