CMS Proposes Slight 2027 Medicare Advantage Payment Increase and Other Updates
(Jan. 29, 2026) - On Jan. 26, 2026, the Centers for Medicare & Medicaid Services released the Calendar Year 2027 Advance Notice and Payment Policies for the Medicare Advantage (Part C) and Part D Prescription Drug Program.
In this notice, CMS’s updates are estimated to increase payments to MA plans by 0.09 percent, or $700 million. This is compared to last year’s initial proposal, which increased MA payments by $21 billion (4.33 percent).
CMS proposes to address concerns raised by the Kansas Hospital Association and hospitals across the nation that MA plans cost the government more than original Medicare, in addition to updating the risk adjustment model to reflect current costs associated with various conditions and characteristics.
The agency also proposes to exclude diagnosis information from unlinked chart review records, which is diagnosis information not associated with a specific beneficiary encounter, from risk score calculation in CY 2027. As a result, diagnoses that are not reported or associated with a service would not be considered for risk adjustment.
Additionally, CMS is soliciting feedback on new measures that would incentivize MA plans to avoid unnecessary, inappropriate, or low-value care, as well as measures related to medical errors or misdiagnoses.
CMS also announced updates to the Part D risk adjustment model. Out-of-pocket prescription drug costs for individuals with Medicare Part D are proposed to be capped at $2,400 in 2027, up from $2,100 in 2026.
Comments on the CY 2027 proposals are due Feb. 25, 2026. KHA members are encouraged to provide their feedback to Shannan Flach and Jaron Caffrey by Feb. 13, 2026. The agency expects to publish a final rate announcement on or before April 6, 2026.