CMS continues to pull on the levers it has at its disposal to rein in national healthcare spend, including rulemaking around Medicare Advantage. In April, CMS announced the final rate for MA plans for CY2027, after a controversial proposed rule generated animated pushback — and a fair bit of panic — among payers. In this episode, host Abby Burns speaks with Alex Balmes, Vice President of Actuarial Services at Optum, to unpack what did — and didn’t — end up in the final rate announcement, and what that signals for the future of the Medicare Advantage program. Together, they explore the components of the final rate that are most important for payers and providers to pay attention to, respectively, and why. Also in the 2027 final announcement, but not discussed in this episode: four measures are being added or updated in Star ratings calculations (Colorectal Cancer Screening; Care for Older Adults – Functional Status Assessment; Concurrent Use of Opioids and Benzodiazepines (COB); Polypharmacy: Use of Multiple Anticholinergic Medications in Older Adults (Poly-ACH)) and three are being removed (Care for Older Adults – Pain Assessment, Medication Reconciliation Post-Discharge, Medication Therapy Management (MTM) Program Completion Rate for Comprehensive Medication Review (CMR)) We’re here to help: Read the 2027 CMS Announcement | 2027 | CMS Episode | 286: A Medicare Advantage reset — and what comes next Ready-to-Use Slides | Medicare Advantage market outlook Stay informed | Healthcare policy updates Tool | Policy Scenario Impact Calculator Connect with an Optum Advisory expert | Optum Learn more about Advisory Board’s 2026 summit series. A transcript of this episode as well as more information and resources can be found on RadioAdvisory.advisory.com.

302: CMS announced the 2027 MA final rate. What do payers and providers need to know?

Radio Advisory

# Full Transcript

**Podcast:** Radio Advisory

## Participants

- **Abby Burns** (Advisory Board)
- **Alex Balmes** (Optum)

## Transcript

It's really been the fluctuation within the past four or five years and the changes in the risk adjustment model that has really constrained reimbursement to MA payers. And that has compounded financial struggles for the MA industry. From Advisory Board, we're bringing you a radio advisory, your weekly download on how to untangle healthcare's most pressing challenges. I'm Abby Burns.

Today, we're talking Medicare Advantage, specifically what the latest MA payment rate update looks like, what it means for payers and providers, and what impact it might have on the future stability of the MA program. We've talked about Medicare Advantage a bunch on Radio Advisory, and that's in no small part because this is a super consequential segment of the healthcare industry.

For payers and providers, certainly, but also for patients, 35 million of whom have opted into MA, and who rather enjoy having supplemental benefits that traditional Medicare doesn't offer. But their ability to access those benefits relies on this program being stable and sustainable for the whole ecosystem. As we talked about on Radio Advisory back in February, it's been a volatile few years for MA, and the MA program itself is coming under more and more scrutiny from the government.

Today, I want to understand how that scrutiny is showing up in one of the main levers the government has to influence the way this program operates, the annual payment rate adjustment. CMS made the 2027 MA and Part D final announcement in early April. Today, I want to understand not just the high level, but the mechanics of what is and isn't in this rate announcement, and what it means for payers and providers alike.

Now, to do that, I need to call on someone with both the technical expertise to break down the specifics of what goes into this rate, and the strategic acumen to explain the so what. That's why I'm calling Alex Bomas, VP of Actuarial Services for Optum. Alex has been doing actuarial consulting for payers and providers in the government payment space for 23 years, including eight years in R&D for actuarial models. Without further ado, here's my conversation with Alex.

Alex, thank you so much for coming on Radio Advisory. Thank you. We are talking about Medicare Advantage. In January of this year, CMS put out its 2027 Medicare Advantage and Part D advance notice, as it does every year. This time, it caused a little bit of an uproar. The stocks of major health insurance companies who operate Medicare Advantage plans dropped as much as 10% to 20% in a single day.

For their part, plans were very clear from the time this advance notice came out that this essentially is not a viable or a sustainable proposal. So fast forward a couple months. In early April, CMS released the final rate announcement. Alex, to start our conversation, can you overview where CMS l...

302: CMS announced the 2027 MA final rate. What do payers and providers need to know?

Transcript

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302: CMS announced the 2027 MA final rate. What do payers and providers need to know?

Transcript

Built for investment professionals

Every day you wait, your competitors are findingedge in conversations you're not hearing.

Every day you wait, your competitors are finding
edge in conversations you're not hearing.