Medicare Advantage Risk Adjustment Changes 2027 are shaking up one of the biggest segments of American healthcare right now. If you’ve been following the news, you know the Centers for Medicare & Medicaid Services (CMS) dropped a bombshell in early 2026 with its Advance Notice for 2027. These tweaks aim to make payments more accurate and curb what regulators see as overcoding, but they’re hitting insurers hard—especially giants like UnitedHealth Group.
Think of risk adjustment like a referee in a game: it levels the playing field by paying plans more for sicker enrollees. Without it, companies might avoid high-risk patients. But the system has critics who say plans game it by hunting diagnoses to boost payments without always tying them to real care. The 2027 changes target exactly that.
In this article, we’ll break down Medicare Advantage risk adjustment changes 2027, what CMS is proposing, why it matters, and how it ties directly into concerns about UnitedHealth stock after 2027 Medicare Advantage rates. Let’s unpack it step by step.
Understanding Risk Adjustment in Medicare Advantage
Risk adjustment uses Hierarchical Condition Categories (HCCs) to predict healthcare costs based on diagnoses. CMS pays Medicare Advantage (MA) plans a capitated amount per enrollee, adjusted upward for chronic conditions like diabetes or heart failure.
The goal? Prevent plans from cherry-picking healthy seniors while ensuring fair compensation for caring for sicker ones. Over the years, though, studies show MA plans code more intensely than traditional Medicare—leading to higher payments. Chart reviews (retrospective audits of records to add diagnoses) and unlinked codes have fueled billions in extra reimbursements.
CMS wants to fix this. Medicare Advantage risk adjustment changes 2027 build on prior updates like V28 (which phased in lower payments for certain codes) and aim for greater accuracy.
Key Medicare Advantage Risk Adjustment Changes 2027 Proposed by CMS
The 2027 Advance Notice outlines several big shifts:
Exclusion of Unlinked Chart Review Diagnoses
CMS proposes barring diagnoses from “unlinked chart review records”—those not tied to a specific medical encounter like a doctor’s visit—from risk score calculations starting in 2027. Only diagnoses linked to actual care count.
Why? Unlinked reviews let plans add codes without corresponding treatment, inflating scores. CMS estimates this alone could save over $7 billion in 2027 by reducing overpayments.
Updates to Data Sources and Models
The agency plans to use fresher data: 2023 diagnoses and 2024 expenditures, ditching older pre-COVID figures. This reflects current costs better and reduces reliance on outdated patterns.
CMS also maintains the statutory 5.9% coding pattern adjustment (no extra for 2027) and proposes excluding audio-only telehealth diagnoses from risk scoring in some cases.
Broader RFIs on Modernization
Beyond immediate changes, CMS issued Requests for Information (RFIs) exploring entirely new models—perhaps incorporating AI, encounter data from MA plans, or factors beyond diagnoses. The goal: simplify burdens, promote fair competition (especially for smaller plans), and focus payments on true health needs rather than coding intensity.
These Medicare Advantage risk adjustment changes 2027 aren’t isolated—they’re part of a push to protect taxpayers while ensuring beneficiaries get value.
How These Changes Impact Medicare Advantage Plans Overall
Flat or low payment growth combined with tighter risk adjustment squeezes margins. The proposed 0.09% net increase for 2027 (far below the expected 4-6%) already factors in risk model revisions (-3.32%) and diagnosis source changes (-1.53%).
Plans face tough calls: cut extra benefits (like dental or gym perks), raise out-of-pocket costs, exit markets, or accept lower profits. Smaller or newer plans might gain ground if big players lose their coding edge, but everyone feels the pinch from rising utilization and medical inflation.
The industry warns of reduced choices for seniors, but CMS argues it’s about sustainability and preventing unnecessary spending.
Why UnitedHealth Faces the Biggest Spotlight
As the largest MA provider with over 8 million members (about 30% market share), UnitedHealth feels these changes acutely. Analysts note its MA business is most exposed per member to chart review exclusions and risk score tweaks—despite prior V28 adjustments already trimming advantages.
When the 2027 Advance Notice hit, UnitedHealth stock plunged nearly 20% in a day, dragging peers down and erasing billions in market value. Executives called the proposal “disappointing,” signaling potential “very meaningful benefit reductions” or plan exits if finalized unchanged.
This directly fuels discussions around UnitedHealth stock after 2027 Medicare Advantage rates. The stock’s volatility stems from heavy reliance on MA growth, now threatened by regulatory headwinds. Diversification through Optum helps, but MA remains a core driver.
For more on the stock angle, check out insights on UnitedHealth stock after 2027 Medicare Advantage rates—it’s a natural next read for investors tracking these policy ripples.
What Happens Next: Timeline and Potential Outcomes
Comments on the proposals closed in February 2026, with the final rate announcement expected in early April. History shows final rules often improve slightly from proposals, but major elements like chart review exclusions could stick.
Watch for:
- Industry pushback and lobbying.
- Any softening (or toughening) under the current administration.
- UnitedHealth’s 2027 bid strategy and enrollment moves.
If changes hold, expect ongoing margin pressure and a shift toward efficiency over volume.
Conclusion
Medicare Advantage risk adjustment changes 2027 represent CMS’s boldest step yet to rein in perceived overpayments and refocus the program on real care value. By excluding unlinked chart reviews, updating data, and exploring modern models, regulators aim for fairness and sustainability—but at the cost of tighter finances for plans.
For UnitedHealth and others, it’s a pivotal moment that could reshape profitability and strategy. Investors and beneficiaries alike should stay tuned: these changes could redefine Medicare Advantage for years. If you’re eyeing healthcare stocks, understanding Medicare Advantage risk adjustment changes 2027 is key to grasping the bigger picture—including impacts on UnitedHealth stock after 2027 Medicare Advantage rates.
Here are three high-authority external links for deeper reading:
- CMS 2027 Medicare Advantage Advance Notice – Official details on proposed changes.
- Federal Register: CY 2027 Proposed Rule – Full regulatory text.
- KFF Analysis on Medicare Advantage Trends – Independent overview of program finances.
FAQs
What are the main Medicare Advantage risk adjustment changes 2027?
CMS proposes excluding unlinked chart review diagnoses from risk scores, using fresher data (2023 diagnoses, 2024 expenditures), and maintaining coding adjustments while seeking input on new models.
How do Medicare Advantage risk adjustment changes 2027 affect UnitedHealth?
As the largest MA player, UnitedHealth faces significant exposure to chart review exclusions and risk score reductions, contributing to sharp stock drops and potential benefit cuts tied to UnitedHealth stock after 2027 Medicare Advantage rates.
Will Medicare Advantage risk adjustment changes 2027 lead to fewer plan options?
Possibly—low payment growth and tighter adjustments could prompt plan exits or reduced benefits, though CMS argues it promotes long-term stability.
When do Medicare Advantage risk adjustment changes 2027 take effect?
Most proposals, if finalized, apply starting in calendar year 2027, with the final rule expected in April 2026.
How can I learn more about UnitedHealth stock after 2027 Medicare Advantage rates linked to these changes?
Follow CMS announcements, UnitedHealth earnings calls, and analyst reports—the risk adjustment tweaks are a core driver of current volatility.
