Yesterday afternoon, April 6, 2026, CMS released the Calendar Year 2027 Medicare Advantage and Part D Rate Announcement. The headline number is a 2.48 percent average increase in payments to MA plans for 2027, which CMS puts at more than $13 billion. That is a very different outcome from the advance notice on January 26, which had proposed an increase of 0.09 percent, roughly $700 million. Including the expected growth in risk scores, CMS estimates plans will see about 4.98 percent more revenue per enrollee.
Insurers and their trade groups had spent the comment period arguing that the January proposal was effectively a cut, and CMS moved a long way toward them. The effective growth rate, which reflects the agency's estimate of per-capita spending growth in traditional Medicare, was set at 5.33 percent, up from 4.97 percent in the advance notice. The proposed move to an updated risk adjustment model was dropped.
Practices do not get paid by the rate announcement. But roughly half of Medicare beneficiaries are in MA plans, the plans set physician contract rates and utilization management with this number in mind, and the risk adjustment changes affect how practices document. So it is worth ten minutes.
Key takeaways
- Plans got 2.48 percent instead of 0.09 percent, mostly because CMS kept the 2024 risk adjustment model for another year.
- Diagnoses documented only on audio-only encounters will not count for 2027 MA risk adjustment. Video and in-person visits still do.
- Diagnoses from unlinked chart review records will not count either, except for members switching between MA organizations. Complete coding on the original claim is now worth more to the plan.
- Expect plans to push for annual video or in-person assessments of chronic conditions, to hold physician rates flat, and to put more money into quality bonus programs.
What CMS decided
| Item | Advance notice (January 26, 2026) | Final (April 6, 2026) |
|---|---|---|
| Net payment change to plans | +0.09 percent | +2.48 percent |
| Effective growth rate | 4.97 percent | 5.33 percent |
| Part C risk adjustment model | Proposed move to an updated model calibrated on more recent data | Kept the 2024 model; updated model not adopted for 2027 |
| Diagnoses from audio-only encounters | Proposed exclusion | Excluded from risk adjustment |
| Diagnoses from unlinked chart review records | Proposed exclusion, estimated at minus 1.78 percent | Excluded, except for beneficiaries switching between MA organizations; estimated at minus 1.53 percent |
| Star Ratings effect on payment | Small negative | Minus 0.03 percent |
The decision not to adopt the updated risk model is the main reason the number rose. CMS said it wanted to give the MA market more time to adjust to the model phase-in that was completed for 2026. We have no strong view on whether that was the right call; what we notice is that the two exclusions did survive, and those are the ones that reach the exam room.
Audio-only diagnoses will not count
Beginning with the 2027 payment year, a diagnosis documented only on an audio-only telehealth encounter will not be accepted for MA risk adjustment. Diagnoses from video visits continue to count, as do diagnoses from in-person encounters. Traditional Medicare still pays for audio-only visits under the flexibilities extended through 2027, so nothing changes about whether you can bill the visit. What changes is the plan's incentive.
Expect MA plans to push, politely and then less politely, for their members' chronic conditions to be assessed on video or in person at least once a year. Expect the plan's in-home assessment vendors to be busier. For a practice, the operational answer is simple: make sure every MA patient with chronic conditions has one in-person or video visit per year at which the active conditions are assessed and documented to the level of specificity the codes require. That is good medicine anyway, and it is what the annual wellness visit was for.
A practical wrinkle: a video visit that drops to audio partway through is coded as audio-only with modifier 93 if the visit was completed by phone. If your telehealth workflow routinely loses video, the diagnoses from those visits will stop counting for the plan. Fixing the connection is cheaper than the plan's alternative, which is sending its own nurse to the patient's home.
Unlinked chart reviews will not count either
MA plans have long supplemented the diagnoses on claims with chart review records: they pull the chart, find a condition the encounter claim did not carry, and submit it. When the chart review is linked to a specific encounter, it stays. When it is unlinked (a diagnosis with no associated visit), it will no longer count, except for members who switched from another MA organization.
For practices this means two things. First, the plan's retrospective chart review requests will shift toward asking you to add a diagnosis to an actual encounter, which is only appropriate if the condition was assessed at that encounter. Do not amend a note to include a condition that was not addressed. Second, and more constructively, the value of complete coding on the original claim goes up. A patient with heart failure, chronic kidney disease stage 3 and diabetes with neuropathy should have all three on the claim for the visit where they were managed, coded to the specificity documented, not just the reason for the visit.
Here is what that looks like on a claim. A 74-year-old MA patient comes in for a medication check. The note documents that the physician reviewed her heart failure symptoms and adjusted a diuretic, checked her most recent eGFR and confirmed stage 3a kidney disease, and examined her feet for neuropathy. The claim should carry I50.22 (chronic systolic heart failure, if that is what is documented), N18.31 and E11.42, in addition to whatever prompted the visit. A claim that carries only Z79.899 for the medication check has left the plan to find the rest through a chart review it can no longer use.
What this means for contract talks
A 2.48 percent increase is better for plans than 0.09, but industry groups were quick to say it still trails medical cost trend. Translate that into your next MA contract conversation: plans will be looking to hold physician rates flat, tighten prior authorization on high-cost services, and lean on quality bonus programs rather than base rate increases. If your practice has strong quality scores and closes care gaps reliably, that is where the money will be in 2027 MA contracts. If you have not been tracking your performance on the plan's Star measures, start now; the measurement year for 2028 Stars is already under way.
One negotiating point worth preparing: the chart review exclusion makes your practice's coding completeness directly valuable to the plan. A practice that can show, from its own claims, that it codes assessed chronic conditions completely is doing work the plan used to pay a vendor to do. That is an argument for a care coordination or documentation fee, and the plans that have already asked us about it know it.
Questions we hear
Does this change how we bill audio-only visits?
No. Bill them as before, with modifier 93 and the appropriate place of service for traditional Medicare, and per the plan's rules for MA. The change is on the plan's side, in what CMS will accept for risk adjustment.
Will MA plans cut our rates?
Depends on the plan and your market. The rate announcement is better for plans than the January proposal, which removes some pressure, but plans have been vocal about margins. Know your quality numbers before the negotiation and put a value on them.
Where does closing care gaps fit?
Squarely. The plans that get more revenue from the 2027 rates will spend part of it on quality bonus programs tied to HEDIS and Star measures, and the practices that close gaps get paid for it. Our closing gaps in care service is built around plan gap lists, and coding completeness on MA claims is part of every RCM audit we run.
What to do this month
- Pull a list of MA patients with chronic conditions whose last in-person or video visit was more than nine months ago. Schedule them before the fall.
- Audit twenty MA claims for coding completeness. Count how many chronic conditions were documented as assessed but not coded on the claim.
- Write a one-paragraph policy on how the practice responds to plan chart review and diagnosis addendum requests. Condition assessed at the visit: add it. Not assessed: decline.
- Ask each MA plan for its 2026 quality bonus and care gap incentive terms in writing, so you know what you are working toward before contract renewal.
- Check your telehealth setup for video reliability, since a visit completed by phone is now an audio-only encounter for the plan's purposes.
