CMS releases 2027 Advance Notice for Medicare Advantage and Part D

CMS released its CY 2027 Advance Notice for Medicare Advantage (MA) and Part D on January 26, kicking off the annual rate-setting process for MA and Part D plans. CMS projects that the proposed updates would result in an average net payment increase of 0.09% in 2027, or 2.54% after accounting for expected coding trends. These figures are preliminary and will likely change before the final rate notice is issued on or before April 6, 2026. Just as importantly, the impact will vary widely by plan based on geography, enrollee risk profile, and quality bonus eligibility, underscoring why stakeholders should look beyond the headline number.

The Advance Notice outlines several policy and methodological changes that could materially affect plan revenue, benefit design, and compliance strategies, and it sets the tone for CMS’s continued focus on risk adjustment integrity and quality measurement.

key issues to watch in the advance notice

• A projected county benchmark growth rate of 4.97% for 2027, reflecting updated fee-for-service spending assumptions.
• Additional updates to the Part C risk adjustment model, including use of more recent data and policies to exclude diagnoses from audio-only services, which together would reduce MA payments by more than 3% absent other offsets.
• Proposals to exclude diagnoses from certain chart reviews when calculating plan risk scores and risk adjusted payments, which would further reduce average payments.
• Continued application of normalization and coding pattern adjustments.
• Proposed changes to Part D risk adjustment and benefit parameters, including IRA-related updates that affect drug spending and beneficiary cost sharing.
• Confirmation of measures that will be used for 2027 Star Ratings, along with reminders of measures being added and removed.

With comments due by February 25, this Advance Notice provides an early but important opportunity for stakeholders to assess financial exposure, flag operational challenges, and engage with CMS before rates and policies are finalized.

The full summary of the Advance Notice is for McDermott+ clients and McDermott+ Insider subscribers only; please contact your relationship consultant with questions. For inquiries, please contact info@mcdermottplus.com.

additional medicare advantage coverage

• Medicare Advantage and Part D proposed rule: Top takeaways for providers
• Understanding Medicare Advantage: Coverage requirements and determinations
• CMS releases 2027 policy and technical changes to Medicare Advantage and Part D proposed rule
• Key issues in Medicare Advantage

Authors

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Lynn Nonnemaker, Ph.D.

Washington, DC

Email / +1 (202) 756-8708
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