AMGA Urges CMS to Reconsider Historically Low Medicare Advantage Rate Adjustment

Cites Increasing Cost of Care Delivery 

Alexandria, VA — AMGA today objected to a near-complete freeze in an annual payment adjustment for Medicare Advantage (MA) plans, arguing it fails to keep pace with the real-world costs of delivering care to Medicare patients. In comments submitted to the Centers for Medicare & Medicaid Services (CMS) on the Advance Notice of Methodological Changes for Calendar Year (CY) 2027 for Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies, AMGA finds it wholly inadequate that the proposed 0.09% payment update does not account for growing beneficiary demand or the significant inflationary pressures facing medical group practices and integrated systems for care.

“We recognize CMS’ efforts to ensure payment accuracy, but a 0.09% rate increase simply does not reflect the reality our members face every single day,” said AMGA President and CEO Jerry Penso, MD, MBA. “Workforce costs are rising, supplies are more expensive, and the infrastructure required to deliver high-quality, coordinated care demands ongoing investment. At some point, we have to ask: How long can providers be expected to do more with less?”

After a 5.06% increase for CY 2026, the near-flat CY 2027 update represents a dramatic reversal that threatens to destabilize the MA market. When payments fail to keep pace with care delivery costs, the consequences are predictable and painful—narrowed provider networks, cuts to supplemental benefits, higher beneficiary cost-sharing, and, in some markets, plan exits that leave patients with fewer options. These are not hypothetical outcomes; more than 1.8 million MA members were enrolled in 2024 plans that were simply not offered in 2025. 

AMGA also raised serious concerns about the proposed exclusion of diagnoses from audio-only telehealth encounters from risk adjustment calculations. Audio-only services are frequently the only viable option for older beneficiaries without access to video technology, patients in rural communities with limited broadband, and those facing socioeconomic or mobility barriers. These are among the sickest and most socially vulnerable patients 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.

“Penalizing plans and providers for serving patients who can only access care by phone, frankly, sends the wrong signal,” said Dr. Penso. “We urge CMS to work with stakeholders to develop appropriate safeguards, rather than imposing a categorical exclusion that undermines care for those who need it most.”

AMGA’s comments also addressed the need for greater stability and predictability in risk adjustment methodology and called on CMS to adopt a more nuanced approach to chart review records, rather than stripping away recognition of clinically valid diagnoses for patients with chronic conditions.

AMGA remains a committed partner in strengthening MA for the millions of beneficiaries who depend on it. AMGA urges CMS to:

• Reconsider the 0.09% payment update to more adequately reflect rising care delivery costs
• Maintain audio-only telehealth encounters as valid sources of diagnosis information for risk adjustment
• Prioritize stability and predictability in risk adjustment methodology
• Develop a more nuanced, evidence-based approach to chart-documented diagnoses

The letter is available on the AMGA website. 
 

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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.