2027 Medicare Advantage Final Payment Rule: Key Changes Explained | David Meyers
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In this emergency episode of Health Affairs This Week, host Jeff Byers and guest David Myers from Brown University break down the final Medicare Advantage payment rule for 2027, which delivers a significant 2.48% payment increase—boosted to approximately 5% when combined with projected risk score growth. The rule marks a reversal from the original advance notice, which proposed more rigorous risk adjustment reforms, including retraining the risk model using 2023–2024 data and eliminating unlinked chart reviews. Instead, CMS has delayed the model update and maintained the outdated 2018–2019 training data, citing market stability as a priority. While the removal of unlinked chart reviews is seen as a positive step toward curbing coding inflation, the decision to back away from more impactful reforms signals a retreat from the administration’s earlier rhetoric on holding insurers accountable. Myers highlights that CMS has additional tools at its disposal—like increasing the M-A coding pattern adjustment beyond the statutory 5.9% minimum—that remain unused, raising concerns about long-term program sustainability and the opportunity cost of billions in overpayments to private insurers at the expense of traditional Medicare and other public health priorities.
The 2027 Medicare Advantage payment increase is effectively around 5%, driven by a 2.48% base bump and projected 2.5% risk score growth.
CMS delayed retraining the risk adjustment model using recent data (2023–2024), opting instead to keep outdated 2018–2019 data to avoid market disruption.
Unlinked chart reviews are being phased out, except for new plan enrollees, but this change may have limited impact as insurers can quickly adapt.
The administration has not used its full statutory authority, including the M-A coding pattern adjustment, which could further rein in overpayments.
Despite strong rhetoric on fraud, waste, and abuse, CMS has prioritized short-term stability over long-term sustainability, potentially undermining program integrity.
Introduction to the 2027 Medicare Advantage Final Rule
Host Jeff Byers introduces the emergency episode to discuss the final Medicare Advantage payment rule for 2027, featuring David Myers from Brown University. The episode sets the stage for a deep dive into the policy’s implications for insurers, beneficiaries, and program sustainability.
The 5% Payment Boost and Market Reaction
“This will increase an estimated $13 billion in Medicare Advantage payments rates, according to the CMS press releases.”
Risk Adjustment Model Delay: The 2018–2019 Data Decision
“There isn't actually that much of a justification not to retrain the model. But if you look at CMS's responses... their main response for why they're deciding to sort of abandon that approach is to promote market stability.”
Chart Review Policy Changes and Their Limits
“While they've kept that rule intact, it is kind of negated by the fact that they're backing down on their shift to this sort of retraining the risk adjustment model using more recent data.”
Broader Implications and Unmet Levers for Sustainability
Myers emphasizes that CMS has not used its full statutory authority, including the M-A coding pattern adjustment, which could deflate risk scores beyond the 5.9% minimum. The episode concludes with concerns about long-term sustainability, overpayments, and the trade-offs between plan stability and public spending priorities.
“The problem, though, is there is a massive amount of additional payment that is going to Medicare Advantage plans that is potentially at the expense of anything else the government wants to be spending money on.”
“There isn't actually that much of a justification not to retrain the model. But if you look at CMS's responses... their main response for why they're deciding to sort of abandon that approach is to promote market stability.”
“While they've kept that rule intact, it is kind of negated by the fact that they're backing down on their shift to this sort of retraining the risk adjustment model using more recent data.”
Host
Guest
CMS
organization
David Myers
person
Medicare Advantage Plans
other
2027 Medicare Advantage Final Rule
other
Jeff Byers
person
Traditional Medicare
other
Unlinked Chart Reviews
other
V28 Risk Adjustment Model
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2018–2019 Data
other
2023–2024 Data
other
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