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CY 2027 Medicare Advantage & Part D Advance Notice: Small Increase, Big Strategic Decisions


CMS has released the CY 2027 Medicare Advantage & Part D Advance Notice, proposing updates to payment rates, risk adjustment and program policies. While the headline suggests relative payment stability, the underlying mechanics point to a year where strategy determines success.


The Headline Numbers (and the Catch)

  • Expected Average MA Payment Change: +0.09% (~$700M)

  • Effective Growth Rate: 4.97%

  • Offset: Risk adjustment model and normalization changes absorb most of that growth


Bottom line: Benchmark dollars may increase, but plans will not feel it automatically. How those dollars are translated through risk adjustment, bid construction and financial strategy will matter more than ever.


Risk Adjustment Continues to Tighten. “As CMS continues to refine and recalibrate the risk adjustment model, accuracy and compliance become even more critical," explained Martha Goodlin, Sr. Director of Clinical Risk Adjustment at Rebellis Group.


  • Key Highlights from the CY 2027 Advance Notice:

    • Payment Impact: Net average MA payment increase of 0.09% (approximately $700M) for CY 2027

    • Effective Growth Rate: 4.97%, driven by Original Medicare cost trends

    • Risk Adjustment Model: V28 will continue to be used, recalibrated with 2023 diagnoses and 2024 expenditures

    • Chart Reviews: Diagnoses from unlinked chart review records may still be submitted, but will not be included in RAF score calculations beginning in CY 2027

    • Telehealth: Diagnoses from audio-only encounters remain excluded

    • Model & Normalization Impact: Combined estimated impact of –3.32%

    • PACE: Continued transition using a 50/50 blend of the 2017 CMS-HCC model and the proposed 2027 model

    • Star Ratings: Administrative and non-substantive updates only; CMS is seeking input on future measures and concepts


What This Means for Bids in 2027

In a near-flat payment year, bid accuracy and execution become the margin.

Many MA organizations are already feeling pressure—and some have exited or are considering exiting the market altogether. CY 2027 reinforces the need to recalibrate, not retreat.


At Rebellis, we support health plans across the full bid and revenue lifecycle to help them stay competitive—and stay in MA.


How Rebellis Helps Health Plans Navigate 2027

Risk Adjustment Strategy

  • Aligning documentation, coding, and RAF expectations with tightening CMS rules

  • Supporting compliant, sustainable risk programs that hold up under scrutiny


Bid Compliance & Operations

  • Ensuring bids are accurate, defensible, and operationally executable

  • Connecting actuarial assumptions to real-world operational performance


Financial Strategy & MLR Optimization

  • Translating benchmark growth and risk adjustment impacts into sustainable margins

  • Identifying MLR and cost-efficiency opportunities, including:

    • Targeted assessments

    • Operational and care model enhancements


Integrated Decision-Making

  • Connecting risk, finance and bid teams so assumptions actually hold up in practice

When payment growth is limited, getting the assumptions right is what protects performance.


A Key Opportunity: Supporting PACE Plans

The Advance Notice continues CMS’ 50/50 blended approach for PACE, combining the 2017 CMS-HCC model with the proposed 2027 model. These blended models introduce unique bid, revenue and cost pressures for PACE organizations. PACE plans should be actively targeted now, as many are disproportionately impacted by these changes.


Rebellis supports PACE plans with:

  • Bid strategy under blended risk models

  • Risk adjustment strategy aligned to evolving CMS expectations

  • Financial and MLR analysis to manage transition risk and cost pressure


Public Comment: A Critical Window to Influence Policy

All provisions in the CY 2027 Advance Notice are proposed and open for public comment.

Comment deadline:11:59 PM Eastern Time on Wednesday, February 25, 2026


Rebellis helps plans:

  • Assess financial and operational impact

  • Develop data-driven, defensible comment letters

  • Ensure real-world implications are reflected in final policy


Join Our Upcoming Risk Adjustment Webinar


Want to go deeper on what these changes mean for your organization?

Register for Rebellis’ upcoming Risk Adjustment Webinar, where our experts will cover:

  • CY 2027 risk adjustment changes

  • What V28 recalibration means for revenue

  • How plans should adapt risk adjustment and bid strategies now



The Takeaway

CY 2027 is shaping up to be a year where execution and thoughtful expansion will win. With benchmarks rising but risk adjustment tightening, plans that succeed will be those that connect risk adjustment, compliance, product and financial strategy and cost efficiency—not treat them as separate exercises. “With benchmark growth largely offset by risk adjustment changes, benefit design and cost containment strategy will be key differentiators for Medicare Advantage plans in 2027," said Roshan Desai, VP of Product & Financial Strategy, Rebellis Group.


Rebellis is ready to help plans adapt, stabilize and remain competitive in Medicare Advantage.



 
 
 
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