On Monday afternoon, April 7, 2025, CMS released the Calendar Year 2026 Rate Announcement for Medicare Advantage and Part D. The headline number is a 5.06% average increase in payments to MA plans, which CMS puts at more than $25 billion. Insurer stocks jumped the next morning. Practice managers, understandably, asked us what any of this has to do with them.
Quite a lot, as it turns out. The rate announcement sets how much money flows into MA plans next year, and plans decide how much of that reaches physicians through contracts, quality bonuses, risk-sharing arrangements and prior authorization policy. The same document also finalizes the last step of a risk adjustment model change that has been reshaping documentation and coding since 2024. If your practice sees MA patients, and most do, this is the document that sets the terms of 2026.
Key takeaways
- CMS finalized a 5.06% average payment increase to MA plans for 2026, up from the 2.23% projected in the January Advance Notice, almost entirely because the effective growth rate rose from 5.93% to 9.04%.
- 2026 is the first payment year calculated 100% on the V28 risk adjustment model; the V24 model carries no weight at all.
- Plans file 2026 bids on June 2, 2025. A practice that wants a better MA fee schedule for 2026 has more influence before that date than after it.
- The increase goes to plans, not to practices. Nothing in the announcement changes a contracted rate unless the practice asks.
- Documentation of chronic conditions every year, with MEAT support, is the one habit that protects the practice under any version of the risk model.
What CMS announced, and why the number moved
The January Advance Notice projected a 2.23% increase. The final figure is about 2.8 percentage points higher, and CMS attributes almost all of the difference to the effective growth rate, which rose from 5.93% in the Advance Notice to 9.04% in the final announcement. The growth rate is CMS's estimate of how fast per-capita spending in traditional Medicare is rising, and the final version incorporates fee-for-service payment data through the fourth quarter of 2024 that was not available in January. In plain terms, Medicare spending grew faster in late 2024 than CMS had assumed, so the 2026 benchmarks that MA plans are paid against grow faster too.
Three days earlier, on April 4, CMS released the CY 2026 MA and Part D policy final rule. It finalized a narrower set of provisions than the proposed rule from November 2024, and several of the more ambitious proposals were not finalized. Read together, the two documents say: more money, less new regulation.
The V28 phase-in is complete
The item with the most direct effect on practices is one sentence in the rate announcement: for 2026, CMS will calculate 100% of MA risk scores using the 2024 CMS-HCC model, usually called V28. The model was phased in over three years (one third in 2024, two thirds in 2025, all of it in 2026), and 2026 is the first payment year where the old V24 model has no weight at all.
V28 matters because it changed which diagnoses affect plan payment and by how much. It increased the number of payment HCCs, removed a couple of thousand diagnosis codes from payment mapping, and constrained several groups of conditions so that documenting a more severe variant no longer produces a higher coefficient. The diabetes HCCs are the well-known example: under V28 the complicated and uncomplicated diabetes categories carry the same weight. Some vascular, behavioral health and malnutrition diagnoses moved in the other direction or dropped out entirely.
For a practice, this means two things. First, the plan-sponsored coding programs, chart-chase requests and "suspect condition" lists that have been reshaped over the last two years are now fully in effect, and plans have a strong incentive to make sure every payable condition is documented properly. Second, the compliance exposure has not gone anywhere. A diagnosis that no longer pays under V28 still needs to be supported if it is on the claim, and the ones that do pay are exactly the ones CMS audits.
Who this affects and how
| If your practice... | What the 2026 announcement means |
|---|---|
| Bills MA plans on a fee-for-service contract | Plans have more headroom for 2026 rates. This is the year to ask for a fee schedule increase; contract conversations for 2026 typically happen between now and early autumn. |
| Participates in shared savings or capitation with an MA plan | Your budget for 2026 is built from these benchmarks. Ask the plan how the effective growth rate and the V28 completion flow into your funding. |
| Receives quality bonus or Star Ratings incentives | Star Ratings still drive the plan's bonus payments. Expect continued pressure on gaps in care, medication adherence and patient experience measures. |
| Codes for risk adjustment | Documentation for HCC-relevant conditions must meet MEAT criteria (monitored, evaluated, assessed, treated). Expect chart requests to continue through 2025 for 2026 payment. |
What changes in the practice's workflow
Honestly, most of the work here is contract work and documentation work, not billing work. Start with the contract file. Pull every MA agreement, note the fee schedule basis (often a percentage of the Medicare fee schedule, sometimes the plan's own schedule), the escalator clause if any, the notice period for renegotiation and the termination terms. Plans file their 2026 bids with CMS on the first Monday in June, which this year is June 2. A practice that wants a better 2026 rate has a stronger position before the bid than after it.
Then look at documentation. The annual wellness visit and the chronic condition follow-up are where most HCC-relevant conditions get documented, and the common failure is a problem list that says "diabetes with CKD" while the note says nothing about the kidney disease that year. Under V28 that particular example no longer changes the payment, but the habit does, and plans will keep asking for charts. A short provider education session on assessing and documenting each chronic condition at least once a year pays off in fewer chart requests and cleaner audits.
Finally, watch what the plans do with prior authorization. When MA plans receive a larger rate increase than expected, they historically compete on benefits and hold the line on utilization management. We do not expect prior authorization to get easier in 2026 because of this announcement, and practices should plan accordingly.
A worked example: what a rate request is worth
Take a four-physician internal medicine practice with 1,100 MA patients spread across three plans, billing about $1.4 million a year to those plans on fee-for-service contracts. The largest plan pays 100% of the current-year Medicare fee schedule and accounts for $700,000 of that. The practice asks for 105% of Medicare from January 1, 2026, citing the plan's 2026 benchmark growth and the practice's Star measure performance on controlling blood pressure and diabetes A1c testing. If the plan agrees, the change is worth roughly $35,000 a year before any volume growth. If the plan offers 102%, it is worth about $14,000. If the practice does not ask, it is worth nothing, and the 2026 payment increase stays with the plan.
Two details make the request land. First, bring the data: the practice's paid amounts by CPT for the last twelve months, its quality measure results for that plan's members, and the percentage of the plan's local members it cares for. Second, ask in May, not September. Plans set their 2026 benefit designs and medical cost assumptions in the bid, and a rate increase promised after the bid is filed has to come out of margin the plan has already committed elsewhere.
Questions we hear
Does the 5.06% increase mean our MA fee schedule goes up 5.06%?
No. The increase is the average change in what CMS pays plans. What a plan pays a practice is set by contract, and plans are under no obligation to pass the increase through. It does mean the plan can afford to, which is why the timing of a rate request matters.
Is the V28 completion good or bad for our practice?
It depends on your patient mix and your arrangement. A practice in a capitated or shared savings arrangement with many diabetic patients has probably already felt the drop in risk scores over 2024 and 2025 and will feel the last third in 2026. A fee-for-service practice will notice it mainly as the shape of plan chart requests. Either way, the answer is the same: document each chronic condition properly every year and let the model do what it does.
Should we review our MA contracts ourselves or bring in help?
A practice manager with the contracts in hand can do the inventory in an afternoon. Where practices usually want help is modeling what a proposed rate does to revenue across the full CPT mix, and checking that the plan is actually paying the contracted rate today. The second question is a standard part of the Revelrex RCM audit, and it is surprising how often a plan is paying an old schedule.
What to do this month
- List every MA contract with its fee basis, escalator, notice period and renewal date.
- Identify the two or three plans that represent most of your MA revenue and request a 2026 rate conversation before June 2.
- Pull a sample of 20 charts for MA patients with chronic conditions and check whether each condition on the claim was assessed in the note that year.
- Ask each plan how its 2026 chart review and suspect condition programs will run, and who at the practice will receive the requests.
- Review the practice's gaps in care list for MA members, because Star Ratings measures drive plan bonus revenue and, through it, the incentives offered to practices.
- Calendar the Annual Enrollment Period (October 15 to December 7) as the point where 2026 plan changes start showing up in your patient mix.
