Last Updated: April 17, 2026
On April 6, 2026, CMS released the calendar year (CY) 2027 Rate Announcement for Medicare Advantage (MA) and Part D. The announcement makes technical updates that impact capitated rates for MA organizations (MAOs). The finalized policies are projected to increase payments to MA plans in CY 2027 by $13 billion (2.48% on average) compared to CY 2026. This is a significant improvement from the Advance Notice’s projected increase of $700 million (0.09% on average). MA plan sponsors should review the Rate Announcement carefully as they prepare bids for CY 2027.
What Changes Are in the MA Rate Announcement?
Below is a summary of key updates included in the Rate Announcement.
Part C Risk Adjustment Model: Non-PACE Organizations
For MAOs that are not Program of All Inclusive Care for the Elderly (PACE) organizations, CMS proposed in the Advance Notice several technical updates to the CMS-Hierarchical Condition Categories (HCC) risk adjustment model for 2027 that largely maintained the structure of the 2024 model while incorporating more current data and refining certain condition categories. As proposed, the 2027 model would have been recalibrated using more recent data (2023 diagnoses predicting 2024 costs).
However, in the Rate Announcement, CMS finalizes a policy to continue using the 2024 MA risk adjustment model, which is calibrated with Original Medicare 2018 diagnoses and 2019 expenditures data and was fully implemented in CY 2026. This decision accounts for a significant portion of the improvement in the projected MA rate increase.
CMS also finalizes the exclusion of diagnoses from audio-only encounters and diagnoses from unlinked chart review records (CRRs), with an exception to include diagnoses from unlinked CRRs for beneficiaries who switch from one MA organization to another. These exclusions are discussed in additional detail below:
- Exclusion of Audio-Only Diagnoses: CMS excludes diagnoses derived solely from audio-only telehealth services—identified by modifiers 93 and FQ—from calibration of the 2024 CMS-HCC model, since these encounters do not meet the face-to-face requirement for risk adjustment eligibility. Only diagnoses from eligible inpatient, outpatient, professional, or interactive audio-video telehealth services are included, aligning the model with MA diagnosis submission policy.
- Exclusion of Diagnoses From Unlinked CRRs: Beginning in 2027, CMS will exclude all diagnoses submitted on unlinked CRRs because they are not tied to a documented service. In a departure from the Advance Notice, CMS makes an exception in the Rate Announcement for beneficiaries who switch between MA organizations from one year to the next. This change in policy related to CRRs responds to long-standing program integrity concerns—highlighted by the Office of Inspector General and MedPAC—that unlinked chart reviews contribute to differential coding and inflate payments. CMS believes requiring diagnoses to be linked to an actual service will improve accuracy without prohibiting plans from submitting unlinked chart reviews for other purposes.
CMS expects these updates to improve model accuracy, which means beneficiary and plan risk scores may shift depending on diagnosis combinations and enrollee mix when the updated model takes effect for Part C payments in 2027.
Part C Risk Adjustment Model: PACE Organizations
CMS continues the transition toward full reliance on encounter data for PACE organizations by blending two risk adjustment models. In CY 2027, CMS finalizes its policy that half of the risk score will come from the long-used 2017 CMS-HCC model, which uses Risk Adjustment Processing Systems (RAPS), encounter data, and fee-for-service (FFS) claims. While CMS proposed in the Advance Notice that the other half would come from the 2027 CMS-HCC model (using only encounter data and FFS claims), CMS updates this in the final Rate Announcement to the 2024 CMS-HCC model.
Part C Risk Adjustment Model: ESRD Enrollees
Similar to CY 2026, for non-PACE organizations in CY 2027, CMS finalizes its proposed policy to continue using the 2023 End-Stage Renal Disease (ESRD) CMS-HCC models to calculate risk scores for beneficiaries in dialysis, transplant, and post-graft status.
CY 2027 Star Ratings Update
CMS reminds MA plans that it is adding four new measures beginning with the 2027 Star Ratings. These include:
- Colorectal Cancer Screening (respecified measure, replacing an existing measure)
- Care for Older Adults – Functional Status Assessment
- Concurrent Use of Opioids and Benzodiazepines (COB)
- Polypharmacy: Use of Multiple Anticholinergic Medications in Older Adults (Poly-ACH)
CMS also is removing three measures beginning with the 2027 Star Ratings:
- Care for Older Adults – Pain Assessment
- Medication Reconciliation Post-Discharge
- Medication Therapy Management (MTM) Program Completion Rate for Comprehensive Medication Review (CMR)
Key Deadlines for CY 2027 Star Ratings
The Rate Announcement notes these key deadlines for MA plans to be aware of related to the 2027 Star Ratings:
- May 18, 2026: Request a review of administrative data used for the Part D Patient Safety Star Ratings measures for the 2025 measurement year for the 2027 Star Ratings.
- June 30, 2026: Request a review of 2025 appeals data.
Key Deadlines for CY 2028 Star Ratings
The Rate Announcement notes these key deadlines for MA plans to be aware of related to the 2028 Star Ratings:
- March 31, 2027: Request a review of 2026 CTM data for the 2028 Star Ratings.
- May 18, 2027: Request a review of administrative data used for the Part D Patient Safety Star Ratings measures for the 2026 measurement year for the 2028 Star Ratings.
CMS’ fact sheet on the Rate Announcement is available here.
How Forvis Mazars Can Help
Forvis Mazars helps MA plans and other payors develop regulatory excellence to maintain compliance and strategically navigate evolving policies. If you have questions about the CY 2027 MA Rate Announcement and how it may impact your organization, please reach out to our professionals.