CMS released its CY 2027 Advance Notice with “routine and technical” payment policy updates meant to improve payment accuracy and sustainability. If finalized, CMS projects a net average year-over-year MA payment increase of 0.09% (about +$700M total to plans).
CMS also notes that when you factor in expected risk score trend (driven by coding practices + population changes), the expected average change in payments would be 2.54%.
The big operational change: risk adjustment “source of diagnoses”
Starting in CY 2027, CMS proposes to exclude diagnoses from “unlinked Chart Review Records” (diagnosis info not associated with a specific beneficiary encounter) from risk score calculation. Plans could still submit them, but they won’t count for risk scores.
CMS estimates this “sources of diagnoses” change has an average payment impact of -1.53%.
Risk model update (Part C)
CMS also proposes to update the MA risk adjustment model while continuing to use V28 clinical classifications, but recalibrating using more recent Original Medicare data (2023 diagnoses / 2024 expenditures) to reflect current costs.
Also included: refinements to exclude diagnoses from audio-only encounters for risk adjustment.
Part D risk adjustment updates
For Part D, CMS proposes updates that:
- Account for Inflation Reduction Act-related benefit changes in effect in 2027 (CMS specifically mentions an increased manufacturer discount for certain small manufacturers, phased in over time)
- Use more current data years (2023 diagnoses / 2024 costs)
- Align diagnosis-source rules with MA (exclude audio-only diagnoses + unlinked CRRs)
- Improve accuracy by modeling MA-PD vs standalone PDP costs separately
Star Ratings tweaks (not a rebuild)
CMS flags “updates” like: eligible disasters list for adjustments, non-substantive measure spec updates, and the list of measures used in improvement measures and the Categorical Adjustment Index for 2027 Star Ratings.
Timeline (what to put on your broker calendar)
- Comments due: Feb 25, 2026 (11:59pm ET)
- Final Rate Announcement: on or before Apr 6, 2026
How this could affect brokers (practically)
This stuff doesn’t change your commissions overnight by itself (CMS isn’t talking about comp here), but it can change the plan landscape you’re selling into for 2027:
1) Expect more 2027 plan volatility than “normal”
When payment updates come in essentially flat, carriers tend to get more aggressive about:
- Benefit redesign (extra benefits, cost-sharing)
- Network strategy
- Service area decisions
- Premium positioning
CMS frames the proposal as protecting beneficiary choice and affordability, but carriers will still react based on their own margins and local competition.
Broker impact: build extra time into your 2027 AEP game plan for comparisons, documentation, and client education.
2) Plans will push harder for “encounter-tied” documentation
The “unlinked chart review doesn’t count” proposal is a big signal: CMS wants risk scores to reflect documented, encounter-based care, not just chart sweeps.
Broker impact: you may see carriers:
- Lean into provider engagement / encounter data completeness initiatives
- Adjust how they do in-home assessments / HRAs and what “counts”
- Tighten internal compliance around risk adjustment vendors and processes
3) More member questions about Part D positioning
Part D risk adjustment is being updated for IRA-related benefit mechanics in 2027 and for better accuracy between MA-PD vs PDP populations.
Broker impact: expect more carrier messaging/training around:
- PDP vs MA-PD bid strategy (which can affect premium moves)
- Formulary/value story and member cost expectations (varies by plan)
4) Your “client messaging” should stay calm and specific
If clients ask “is my plan getting worse?”, the most honest framing today is:
- Nothing is final yet
- CMS is targeting payment accuracy, especially around diagnoses used for risk scoring
- Carriers will announce actual 2027 benefits later (after the rate announcement and bid cycle)