AMGA Statement on CY 2027 Medicare Advantage Rate Notice

Finds Final Rate Insufficient to Address Provider Cost Pressures

Alexandria, VA — AMGA today objected to a modest increase in annual payment adjustment for Medicare Advantage (MA) plans, arguing the finalized rate fails to keep pace with the real-world costs of delivering care to Medicare patients. AMGA is pleased the Centers for Medicare & Medicaid Services (CMS) did not finalize a 0.09% payment update as proposed, but is concerned the 2.48% update does not address growing beneficiary demand or the significant inflationary pressures facing medical group practices and integrated health systems.

“This update does not reflect the economic realities our members face every day,” said AMGA President and CEO Jerry Penso, MD, MBA. “Workforce costs are rising, supplies are more expensive, and delivering high-quality, coordinated care requires sustained investment. We remain committed to working with CMS to find a path forward that ensures the long-term sustainability of Medicare Advantage.”

When payments fail to keep pace with care delivery costs, the consequences are predictable, such as cuts to supplemental benefits, higher beneficiary cost-sharing, and, in some markets, plan exits that leave patients with fewer choices. These are not hypothetical outcomes. More than 1.8 million MA members were enrolled in 2024 plans that were not offered in 2025, a trend this rate does nothing to reverse.
AMGA also disagrees with CMS’ decision to finalize the exclusion of diagnoses captured through audio-only telehealth encounters from risk adjustment calculations. Audio-only services are frequently the only viable option for beneficiaries without access to video technology, patients in rural communities with limited broadband, older patients with little technical knowledge, and those facing socioeconomic or mobility barriers. These patients are among the sickest and most socially vulnerable in the MA population. Excluding their diagnoses from risk adjustment does not make those patients less complex; it simply makes them invisible in the payment model.

 “A categorical exclusion of audio-only diagnoses is too broad an approach and risks leaving behind the patients who most depend on flexible access to care,” Penso added. 

AMGA also remains concerned about ongoing instability in risk adjustment methodology and the approach to chart review records, which continues to limit recognition of clinically valid diagnoses for patients with chronic conditions. Taken together, these decisions compound the financial pressure on providers already operating on thin margins, and AMGA urges CMS to revisit these policies in future rulemaking.  

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About AMGA
AMGA is a trade association leading the transformation of healthcare in America. Representing multispecialty medical groups and integrated systems of care, we advocate, educate, innovate, and empower our members to deliver the next level of high-performance health. AMGA is the national voice promoting awareness of our members’ recognized excellence in the delivery of coordinated, high-quality, high-value care. More than 175,000 physicians practice in our member organizations, delivering care to one in three Americans.