The Centers for Medicare & Medicaid Services (CMS) released the Calendar Year (CY) 2027 Advance Notice and Payment Policies for the Medicare Advantage (Part C) Part D Prescription Drug Program on January 26, 2026. The Advance Notice begins CMS’s annual rate-setting cycle and describes proposed updates to Medicare Advantage (MA) growth rates, benchmark rebasing, risk adjustment, Star Ratings, and Part D payment parameters. CMS previously released a proposed rule in November 2025 that included policy changes to the Star Ratings system and enrollment policies for MA and Part D starting in contract year 2027. (Read the Health Management Associates (HMA) summary here.) 

Comments on the Advance Notice are due February 25, 2026, and CMS will publish the final CY 2027 rate announcement no later than April 6, 2026.  

This article provides an early look at the proposed methodological updates and draft capitation rates. Wakely, an HMA Company, will publish a detailed analysis of the Advance Notice in early February. 

Payment Impact on Medicare Advantage Organizations 

CMS estimates a national per capita MA growth rate of 5.10 percent from 2026 to 2027, with fee-for-service (FFS) non-end-stage renal disease (non-ESRD) growth of 5.10 percent and FFS dialysis end-stage renal disease (ESRD) growth of 6.17 percent. 

The 5.10 percent growth rate reflects projected increases in per capita FFS Medicare spending for beneficiaries who are aged/have disabilities and serves as the primary driver of 2027 benchmark updates, interacting with rebasing and risk adjustment changes to determine final capitation payments. The growth rate reflects updates to how CMS pays for skin substitutes in the 2026 Medicare Physician Fee Schedule. These updates resulted in significantly lower projected costs and materially reduced the growth rate. 

These preliminary estimates inform the development of MA benchmarks and may change in the final rate announcement. 

Table 1. Estimated Impact of Proposed Payment Changes on Medicare Advantage Plan Payments, CY 2027 

Year-to-Year Percentage Change
Impact	CY 2027 Advance Notice
Effective Growth Rate	4.97%
Rebasing/Re-pricing	TBD
Change in Star Ratings	-0.03%
MA Coding Pattern Adjustment	0%
Risk Model Revision and Normalization	-3.32%
Sources of Diagnoses	-1.53%
Expected Average Change	0.09%
Source: Centers for Medicare & Medicaid Services. 2027 Medicare Advantage and Part D Advance Notice. January 26, 2026. Available at: https://www.cms.gov/newsroom/fact-sheets/2027-medicare-advantage-part-d-advance-notice.

 

Medicare Advantage Benchmarks, Rebasing, and Risk Adjustment 

The Advance Notice describes CMS’s approach and changes that will affect payment to plans, including: 

• Excluding from the risk adjustment process diagnoses submitted from chart reviews with unlinked claim records. In the Fact Sheet, CMS estimates this change will reduce Part C payments by 1.53 percent. 
• Rebasing county FFS rates for 2027 using 2020–2024 claims data, continuing CMS’s practice of updating benchmarks annually to reflect the most current FFS experience. The Advance Notice also reiterates the statutory framework for calculating benchmarks, including applicable and specified amounts, benchmark caps, and quality bonus payments. 
• Updating the CMS Hierarchical Condition Category (CMS-HCC) and Prescription Drug Hierarchical Condition Category (RxHCC) risk adjustment models and associated normalization factors for CY 2027 and continuing to apply the statutory MA coding pattern difference adjustment to account for systematic differences in diagnosis coding between MA and FFS. 

Quality Bonus Payments, Star Ratings, and Part D Updates 

CMS states that contracts with 4 or more Stars receive a 5 percentage-point quality bonus, while new and low-enrollment contracts receive a 3.5percentage-point bonus. The Advance Notice also includes updates related to Part C and Part D Star Ratings measures and methodological refinements. 

For Part D, CMS outlines proposed updates to the defined standard benefit parameters for CY 2027, as well as changes to Part D risk adjustment, normalization, premium stabilization, reinsurance, and risk-sharing, with additional policy context provided in the Contract Year 2027 Medicare Advantage and Part D proposed rule. 

Connect with Us 

The CY 2027 Advance Notice provides early signals on benchmark growth, rebasing, and payment methodology changes that will shape MA and Part D payments in 2027. Stakeholders should begin evaluating the potential implications for bid development, benefit design, and financial performance as CMS moves toward finalizing rates in April. 

HMA supports Medicare Advantage and Part D stakeholders with payment impact modeling, scenario analysis, and strategic advisory services related to benchmark rebasing, risk adjustment, Star Ratings, and Part D payment policy to help organizations prepare for the CY 2027 rate announcement. 

For details about the finalized payment and policy rules, contact our featured experts,  Tim Courtney and Rachel Stewart. 

The Centers for Medicare & Medicaid Services (CMS) Innovation Center recently published applications for its new ACCESS Model (Advancing Chronic Care with Effective, Scalable Solutions), a 10-year voluntary initiative beginning July 2026. The model is designed to advance outcomes-based, technology-enabled care delivery in Original Medicare and aligns with the Innovation Center’s priorities of strengthening prevention, empowering beneficiaries, and promoting performance-based competition. ACCESS is particularly suited to organizations with mature clinical operations and data infrastructure, offering a new pathway for tech-supported services. 

This article summarizes the model’s design, highlights key considerations for prospective applicants, and addresses common questions our Medicare and technology experts fielded during a recent Health Management Associates (HMA)/Leavitt Partners webinar. 

What the ACCESS Model Is Testing 

ACCESS evaluates whether Outcome-Aligned Payments (OAPs)—recurring payments contingent on measurable clinical improvement—can reduce spending while maintaining or improving quality for beneficiaries with chronic conditions. The model tests whether incentivizing technology supported care can produce reliable clinical outcomes while complementing traditional care delivery. 

Who may participate? Organizations must be Medicare Part B–enrolled providers or suppliers (excluding DMEPOS [Durable Medical Equipment, Prosthetics, Orthotics, and Supplies] and labs). Participants may enroll beneficiaries directly, operate across multiple clinical tracks, and manage all qualifying conditions within each selected track. Beneficiary participation is voluntary, and individuals may switch ACCESS participants every 90 days. 

Clinical tracks. At launch, the four clinical tracks reflect high-prevalence chronic conditions with established care pathways and strong evidence for technology-supported interventions: 

• Early Cardio-Kidney-Metabolic (eCKM) 
• Cardio-Kidney-Metabolic (CKM) 
• Musculoskeletal (MSK) 
• Behavioral Health (BH) 

Payment. OAPs vary by track and performance period. CMS pays a portion prospectively each quarter and withholds 50 percent pending reconciliation based on: 

• Clinical outcomes attainment: The percentage of aligned beneficiaries who complete the 12‑month performance period and achieve track‑specific clinical targets relative to their baseline. 
• Substitute‑spend test: Ensures beneficiaries do not receive duplicative fee-for-service (FFS) services for conditions managed under ACCESS. 

Technology and data exchange. ACCESS takes a tech-forward approach. Key expectations include use of Fast Healthcare Interoperability Resources (FHIR®) based Application Programming Interfaces (APIs) for eligibility, consent, claims sharing, and care coordination—part of the broader federal push to modernize the health data ecosystem. CMS also plans to publish a public directory that lists participants, tracks, cost-sharing policies, and risk-adjusted outcomes to enable consumer and clinician choice. 

Regulatory coordination. To complement ACCESS and expand the pipeline of technology-supported interventions, the US Food and Drug Administration’s (FDA) TEMPO (Technology-Enabled Meaningful Patient Outcomes) pilot allows selected US-based digital health device manufacturers to participate while generating real-world evidence. Up to 40 device manufacturers may participate across clinical areas. 

This coordinated CMSFDA effort is intended to reduce barriers to innovation and accelerate access to safe, effective digital tools that can support chronic disease management. 

Key Considerations for Applicants 

Program integrity and fraud/abuse. CMS has emphasized program integrity across Medicare and Medicaid, and ACCESS reflects that emphasis. Applicants and their parent organizations should expect rigorous screening. Participants must also operationalize controls to pass the substitute spend test and maintain auditable evidence of outcomes and beneficiary consent. 

Overlap with Accountable Care Organizations (ACOs) and other models. Patients may participate in ACCESS and be aligned with an ACO simultaneously; however, “participant overlap” raises important operational and financial issues. ACCESS includes an FFS exclusion policy that prohibits participants or affiliated entities from billing Medicare FFS for any services delivered to the same beneficiaries for the duration of their ACCESS episode. As a result, traditional providers, ACO-aligned clinicians, and integrated delivery systems must assess whether they can segment patient populations or if partnering is more feasible. 

Eligibility and clinical scope. ACCESS is focused on relatively stable, chronically ill beneficiaries and excludes those with more acute/severe conditions. Participants must accept responsibility for all qualifying conditions a beneficiary has within a track. 

Outcomes performance. The ACCESS Model places substantial emphasis on clinical performance and care coordination. Participants are paid in full only if enough patients hit outcomes targets. Early cohorts will likely skew toward organizations with mature clinical protocols, robust engagement models, and demonstrated outcomes. Applicants should be financially prepared to tolerate withholds, beneficiary switching, and follow-on period payment reductions after year one. 

Digital infrastructure and interoperability. ACCESS presumes API-driven data exchange, including consent capture, eligibility checks, claims/clinical data integration, and bidirectional information sharing with the patient’s broader care team. Applicants should ensure they have a FHIR API server and meet the requirements described in the CMS Health Tech Ecosystem pledge.

Go-to-market and referral strategy. Beneficiary alignment is voluntary and will be facilitated by CMS’s planned public directory with risk-adjusted outcomes. Access participants will benefit from strong referral relationships—especially with ACOs and primary care providers—both to enroll eligible beneficiaries and to minimize substitute services. A field strategy grounded in evidence, patient engagement, and interoperability with local providers is critical to success. 

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Applications for the first ACCESS Model performance period are due April 1, 2026, with model launch in July 2026; applications submitted later would start January 1, 2027. Because ACCESS is a rolling, decade-long model, some organizations may choose to stage entry. 

ACCESS is the most explicit Innovation Center opportunity to date on outcomes-based, tech-enabled chronic care in Traditional Medicare. It offers digital health and advanced care organizations a direct line to FFS beneficiaries with payment tied to results, not activities. Success will favor teams that combine clinical excellence, consumer-grade engagement, and API-level interoperability, as well as manage program integrity, ACO overlap, and beneficiary churn. 

For questions or support assessing readiness, developing an application, or operationalizing the model, contact Amy Bassano, Ryan Howells, or Kate de Lisle.