On January 10, CMS released the 2026 Advance Notice for Medicare Advantage (MA) plans, detailing proposed changes to MA capitation rates and Part C and Part D payment policies. This notice brings significant updates, including the full implementation of the V28 risk adjustment model for CY 2026, projected payment adjustments, and shifts in Part D and Star measures. Here’s what you need to know:
Implementation of the V28 Risk Adjustment Model for Medicare Advantage
For 2025 dates of service, CMS plans to fully transition to the CMS-HCC V28 risk adjustment model for calculating risk scores. This shift completes the phased transition from the previous V24 model, which involved a blended approach over prior years. The V28 model is designed to enhance predictive accuracy by incorporating more recent diagnosis and cost data, allowing MA plans to focus exclusively on V28 for prospective risk adjustment activities.
Projected Payment Increases for Medicare Advantage
CMS projects an average payment increase of 4.33% from 2025 to 2026, amounting to an additional $21 billion in MA payments. This projection includes an estimated 2.10% increase in the MA risk score trend. This means plans must improve their risk adjustment scores by at least this percentage to achieve any additional revenue gains from higher risk scores. These adjustments underscore the necessity for effective risk score improvement strategies to thrive in the competitive MA landscape.
Shifts in MA Part D Risk Adjustment
CMS continues to refine Part D risk adjustment by increasing plan liability, prompting MA plans to pay closer attention to Prescription Drug Hierarchical Condition Category (RxHCC) coding. Historically, Part C risk scores dominated risk adjustment priorities, but these changes highlight the growing significance of Part D in overall plan performance. Additionally, CMS is proposing updates to the RxHCC model to align with benefit updates for CY 2026, ensuring the model’s accuracy under the revised standard benefit.
Updates to Medicare Advantage Star Measures and Quality Metrics
CMS is proposing updates to the MA and Part D Star Ratings, with a greater emphasis on clinical care, outcomes, and patient experience. Changes to specific care measures and efforts to align quality metrics across populations and lines of business reflect CMS’s commitment to improving the consistency and effectiveness of value-based care programs. These updates highlight the need for MA plans to prioritize strategies that drive performance improvements in these key areas.
CMS continues to evaluate and improve Medicare Advantage for Payment Year 2026, with V28 taking full effect alongside additional focus on Part D and Star measures. While more funding will be available, rising medical costs make it essential for plans to stay ahead. Risk adjustment analytics, as well as prospective and retrospective activities, are more critical than ever for MA plans to succeed in today’s challenging and evolving environment.
– Jimmy Liu, Vice President of Analytics and MRR Solutions at Advantmed
Conclusion
The 2026 CMS Advance Notice introduces significant changes for Medicare Advantage plans, including the full adoption of the CMS-HCC V28 risk adjustment model, increased payments, and shifting priorities in Part D and Star measures. As the MA landscape evolves, health plans must stay proactive to navigate these developments effectively and maintain long-term success.
Advantmed supports health plans by offering tailored solutions and expertise that enables them to adjust to these changes, improve outcomes, and meet the demands of an increasingly competitive environment. By focusing on data-driven strategies and collaborative partnerships, we help plans optimize their performance and remain well-positioned in the evolving Medicare Advantage landscape.
Learn more about how Advantmed’s risk adjustment solutions can help your health plan adapt to the latest CMS changes.