WASHINGTON D.C. – The Centers for Medicare & Medicaid Services (CMS) has officially released its 2027 Advance Notice, outlining a fiscal strategy that emphasizes sustainability and “simplicity” for the nation’s Medicare Advantage (MA) and Part D programs.
Under the leadership of CMS Administrator Dr. Mehmet Oz, the agency is proposing a base payment increase of 0.09% for 2027. While CMS expects the total “effective” yield for insurers to reach 2.54% once risk-coding trends are factored in, the proposal represents a continued tightening of the federal belt.
Reining in “Upcoding”
A central pillar of the 2027 proposal is a crack-down on “unlinked chart reviews”—a practice where insurers submit diagnoses to the government that are not tied to a specific medical visit to trigger higher payments.
“Our goal is to ensure that every dollar spent is a dollar that directly benefits the health of our seniors,” said Dr. Oz. “By modernizing our risk adjustment models with 2024 data and simplifying administrative hurdles, we are protecting the program for future generations.”
The Drug Cost Cap
The proposal also includes updates to the Part D prescription drug program. Following the trajectory set by the Inflation Reduction Act, CMS has proposed an out-of-pocket maximum of $2,400 for 2027. This cap is designed to protect beneficiaries from catastrophic costs associated with high-priced medications.
The healthcare industry has until February 25, 2026, to provide public comment on these proposals, with a final rate announcement expected in early April.
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