CMS 2027 MA Final Rule Jumps to 2.48% vs. 0.09% NPRM: What Changed in Trend, Risk Score, and Stars

CMS published the Contract Year 2027 Final Rule for Medicare Advantage and Part D on April 6, 2026 with an average effective rate change of 2.48%, against 0.09% in the Advance Notice released January 10.

A 239 basis point move between proposal and final adds roughly $13 billion to CY2027 program payments on the $1.3 trillion five-year payment base CMS references. Two of the five components produced almost all of it, and neither is a methodology change.

Key Takeaways

• The 2.48% final against a 0.09% proposal is a 239 basis point swing, worth about $13 billion for CY2027, with bids due the first Monday in June.
• 155 basis points came from the effective growth rate rising to 7.48% on refreshed Part A and Part B data, and 84 basis points from the normalization drag falling from 3.01% to 2.17%.
• The MA coding pattern adjustment held at the statutory minimum of 5.90%, a 0.59% reduction to the effective rate, for a ninth consecutive year.
• Dual-focused plans face a V28 drag in the 3.0% to 4.5% range against 1.5% to 2.0% for broad-market HMOs, so their net benefit runs nearer 0.8% to 1.5% than the headline.
• The V28 phase-in weights for CY2027 are unchanged at 67% V28 and 33% V24, so the relief is a data refresh rather than a shift in direction.

Where the 239 Basis Points Came From

The effective rate change is an industry-average expected revenue per member per year against the prior year, weighted by projected enrollment across all contracts. It is neither plan-specific nor a payment guarantee, and CMS estimates its five components separately in the Rate Announcement Fact Sheet.

The effective growth rate did most of the work. The Advance Notice projected Part A per-capita growth near 5.2% and Part B near 6.5%, blending to about 5.93% on data through Q3 2025. Refreshing with Q4 2025 and early 2026 runout lifted it to 7.48%: inpatient Part A spending ran ahead of the Q3 trajectory on continued volume normalization and a heavy respiratory season, and Part B drug spending in oncology and metabolic therapies ran well above projection. Milliman's rate notice commentary had flagged both as upside risks in February.

The normalization component supplied the other 84 basis points, cutting the combined FFS normalization and V28 drag from 3.01% to 2.17%. CMS extended the FFS trend window by a quarter, which produced a lower FFS risk score trend and mechanically reduced the factor plans absorb, and refined how the blended model weights interact with it. The full Rate Announcement walks both through in Attachment I.

Nothing else moved. The coding pattern adjustment stayed at the statutory minimum of 5.90%, worth a 0.59% reduction to the effective rate.

The National Average Reaches Different Plans Differently

The 7.48% growth rate is an average across counties, and the benchmark quartile structure amplifies the spread. A county moving from Quartile 3 to Quartile 4 on updated FFS data picks up both a higher base rate and a higher applicable benchmark percentage, so the combined effect exceeds the 155 basis point national figure. Counties where FFS enrollment has thinned see less.

Population mix pulls harder than geography. The 2.24% risk score trend is a national average of a V28 transition that redistributes predictive weight across HCC categories, and it retired or compressed weights for several conditions common in dual-eligible populations, including certain chronic behavioral health, peripheral vascular disease and some diabetes complications, while holding or raising weights for cancer, heart failure and kidney disease.

That splits the book. D-SNPs and C-SNPs with dual-dominant populations carry a V28 drag closer to 3.0% to 4.5%, where broad-market HMOs sit nearer 1.5% to 2.0%. Dual populations also concentrate in lower-income urban counties where FFS cost growth has run at or below the national average, so the growth rate benefit lands less fully. Net of both, a dual-focused plan often sees 0.8% to 1.5% rather than 2.48%, while carrying integrated care and look-alike compliance obligations a general-enrollment book does not.

The consequence for the June bid is that the supplemental benefit budget diverges even where the headline rate is shared. A general-enrollment HMO can fund vision, dental, hearing or transportation expansion out of the swing; a dual-focused plan is closer to flat and cannot trim existing supplemental obligations without touching state integrated care requirements.

The refreshed trend also runs backward into reserves. Plans that set CY2026 completion factors against the January projection are carrying conservative assumptions relative to the final data. Wakely and Milliman analyses of prior rate cycles suggest swings of 150 to 250 basis points in the effective growth rate typically produce prior-year development in the 30 to 60 basis point range of net premium on a one-quarter lag, which is modest but real for plans sitting near RBC action levels.

The Relief Is Timing, and the Direction Underneath Is Unchanged

Nothing in the final rule altered the methodology that produces the drag. CMS reaffirmed the V28 phase-in at 67% V28 and 33% V24 for CY2027, and the 84 basis points came from one more quarter of FFS data moving the trend window, not from a revised approach. A plan that treats the improvement as a change in trajectory is reading a data refresh as policy.

The coding pattern adjustment is the clearer signal. CMS declined for a ninth consecutive year to lift it above the statutory 5.90% floor, while MedPAC's March 2025 and March 2026 reports both recommended raising it by several percentage points to reflect observed coding intensity differences between MA and FFS populations. An increase of 100 to 200 basis points from CY2028 sits inside the realistic policy range, and it would arrive against the same benefit designs funded by this year's swing.

The Stars changes tighten from the other side. CMS finalized the removal of the Excellent Health Outcomes for All reward starting with the 2028 Star Ratings year on measurement year 2026, so plans that built expected revenue against EHO4A uplift lose it from the 2029 quality bonus calculation. Refinements to the Tukey outlier and cut-point methodology narrow the ratings distribution, which sharpens the 4-Star cliff for plans holding a single weak measure such as medication adherence or member experience.

The new Part C depression screening and follow-up measure lands on 2029 Star Ratings using measurement year 2027, which is the year being bid now. Data capture, provider prompting and HEDIS hybrid sampling workflows have to be operational during the same period the supplemental benefits funded by this rate change are being delivered, and the cost of building them competes with the budget the 239 basis points just created.