CMS says it considered comments after proposing a 0.09% increase in the Advance Notice.
Medicare Advantage insurers are getting a 2.48% payment increase for 2027, which is more than the 0.09% increase proposed in the January Advance Notice.
The final policies in the 2027 rate announcement are expected to increase insurer payments by over $13 billion in 2027.
When accounting for the estimated risk score trend in MA due to factors such as population changes and coding practices, the rate amounts to a 4.98% increase, the Centers for Medicare and Medicaid Services said in releasing the 2027 Medicare Advantage Capitation Rates and Part C and Part D Payment Policies late Thursday.
AHIP and other insurer groups had criticized the original proposal as essentially flat funding that wasn’t keeping up with higher medical utilization and costs.
UnitedHealthcare CEO Tim Noel said during a Q4 earnings call in January, the day after the proposed rate was announced, “The news in the Advance Notice was disappointing.”
CMS said the Advance Notice drew a “wide variety of comments on the proposals,” and that it considered all applicable comments.
“CMS is committed to the sustainability of the MA program,” the agency said in the announcement.
On Monday, AHIP released a one-paragraph statement on the finalized payment and policies.
“More than 35 million seniors and Americans living with disabilities choose Medicare Advantage because it provides them with better care at lower costs than fee-for-service,” said Chris Bond, AHIP spokesperson. “As health plans incorporate the policies released in recent days, they will continue to focus on keeping coverage and care as affordable as possible during this time of sharply rising medical costs.”
CMS policies released in recent days include an announcement last week to revise the Medicare Advantage star ratings system. The CMS final rule is expected to give MA insurers $18.6 billion over the next decade due to changes to boost star ratings, which will increase insurers’ quality bonus payments.
The final rule on Monday included policies on risk adjustment.
For 2027, CMS said it would continue to use the 2024 MA risk adjustment model, which was calibrated with Original Medicare 2018 diagnoses and 2019 expenditures data and fully implemented in 2026. This is in lieu of the updated risk adjustment model calibrated with Original Medicare 2023 diagnoses and 2024 expenditures data that was proposed in the 2027 Advance Notice, CMS said.
“Continued use of the 2024 MA risk adjustment model will allow the MA market more time to adjust to the recently completed phase-in of the 2024 MA risk adjustment model,” CMS said.
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