CMS Proposes Changes for 2027 Medicare Advantage and Part D Plans
The Centers for Medicare & Medicaid Services (CMS) recently concluded the comment period on the 2027 Medicare Advantage (MA) and Part D Advance Rate Notice. This milestone sets the stage for issuing the final rate notice by April 6, 2026. The upcoming final rule will address several non-payment policies, including the Stars rating system and marketing practices.
The advance notice outlines critical changes for MA and Part D plans, capturing the attention of industry stakeholders. For 2027, CMS has proposed a nearly unchanged payment update for MA plans, with a projected growth rate of 4.97% for fee-for-service (FFS) spending. This proposal has raised concerns among stakeholders due to its significant impact on plan benefits and financial viability.
One significant issue is the proposed changes to skin substitutes, which have seen rising spending under traditional Medicare. CMS addressed reimbursement policies in the 2026 Physician Fee Schedule, aiming to reflect these adjustments accurately in the anticipated 2027 payment rates. These changes are crucial to maintaining budgetary balance and provider satisfaction.
Beyond growth rates, CMS has proposed major revisions to the Part C risk adjustment model. Updates involve calibration data, modifications to condition categories, and the exclusion of diagnoses from telehealth-only audio visits. These adjustments could lower risk scores and payments by an average of 3.32% in 2027, prompting stakeholders to advocate for gradual implementation to mitigate the financial impact.
In the Part D sphere, CMS contemplates distinct risk models for combined MA and Part D plans and standalone Part D offerings. While this could potentially lower risk scores for MA-PD enrollees, the full payment implications are still under discussion. Additionally, proposals target rising premiums for standalone PDPs by addressing structural inefficiencies.
CMS has also suggested ending the use of "unlinked chart reviews" for risk score calculations, projecting a 1.53% decrease in risk-adjusted payments. Such changes might eliminate the benefits of growth rate increases for 2027, posing challenges for plan resource management and benefit design.
In a notable policy evolution, CMS is considering removing the Health Equity Index (HEI) from Stars ratings. Originally designed to incentivize plans that improve outcomes for low-income and disabled members, this change could lead to higher ratings and quality bonuses across the industry. However, certain plans previously benefiting from the HEI have voiced opposition.
The Part D realm also sees potential developments with the BALANCE model, which aims to include GLP-1 medications for weight loss despite current statutory limitations. Scheduled for implementation on January 1, 2027, with a preliminary "bridge" initiative in mid-2026, stakeholders have expressed concerns over inadequate guidance, underscoring calls for possible delays. As CMS reviews policy proposals, the industry is bracing for a complex regulatory landscape affecting coverage, costs, and care management in the upcoming year.