The 2026 CMS Advance Notice: 3 key takeaways

Released earlier than in years past, the 2026 Centers for Medicare & Medicaid Services (CMS) Medicare Advantage (MA) and Part D Advance Notice contains key updates for MA plans from both a risk adjustment and quality perspective. Here, we offer three important takeaways for MA plans looking to digest these proposed changes and craft impactful comments to submit during the public comment period.

MA plans would see a larger average revenue increase

As noted in Figure 1, a significantly larger effective growth rate compared to the 2025 Final Rate Announcement would drive an expected average revenue bump exceeding 4.3% or more than $21 billion. As CMS explains, this effective growth rate is driven by estimated growth in Medicare Fee-For-Service (FFS) per capita costs. The expected average revenue increase also factors in quality bonus payments, risk adjustment model updates, and risk score increases driven by demographics and coding patterns.

Figure 1. Year-over-year changes in anticipated MA plan payments (Source: CMS fact sheet).

The new CMS-HCC risk adjustment model would be fully phased in

In 2023, CMS announced the phase-in of a new CMS-HCC risk adjustment model to begin in calendar year 2024. Important updates included:

• Restructured condition categories using the ICD-10 coding system rather than ICD-9
• Updated underlying FFS data years
• Updated denominator year to determine average per capita predicted expenditures

In 2026, CMS proposes to complete the three-year phase-in of the 2024 CMS-HCC risk adjustment model, noting the following:

Plans and providers have implemented the model smoothly and risk adjustment and payment levels have remained stable, and thus CMS is proposing to finish the phase-in as proposed to improve payment accuracy. For 2025, MA offerings for people with Medicare remained stable—including premiums, supplemental benefits, and coverage options. Additionally, MA rebates—used to provide supplemental benefits and premium buy-downs—have stayed stable at more than $2,400 annually per person on average, which indicates that MA payment has remained adequate during the phase-in of these updates. Pausing the risk adjustment model phase-in would result in $3.4 billion in additional payments to MA plans in 2026, which are not necessary to support stability in the program. 

Star Ratings quality bonus payments would continue to decline

CMS anticipates the cumulative impact of changes to the Star Ratings program for calendar year 2026 would be a 0.69% decline in overall quality bonus payments, a steeper decrease from 0.15% decline for calendar year 2025.

In addition to non-substantive measure specification updates, the Advance Notice proposes new measure concepts and methodological changes driven by changes to the HEDIS^® program proposed by the National Committee for Quality Assurance (NCQA). This includes potential measures focused on:

• Adult COVID-19 and RSV immunization
• Diabetes foot exam and follow-up
• Colorectal cancer screening follow-up
• Intimate partner violence
• Disability equity
• End-stage renal disease (ESRD)
• Person-centered outcomes

For the Health Equity Index (HEI) reward that will be implemented beginning with the 2027 Star Ratings, CMS also seeks feedback on adding geography (e.g., rural or urban) as a social risk factor (SRF).

CMS will accept public comment on the 2026 Advance Notice through February 10, 2025 and publish the final Rate Announcement by April 7.

HEDIS^® is a registered trademark of the National Committee for Quality Assurance.