Current Intelligence
2027 Advance Notice, V28 full phase-in status, and what leaders need to know now
Source: CMS, MedPAC, OIG, market analysis • Last updated March 2026
Key Takeaway
The CY 2027 Advance Notice, released January 26, 2026, proposes the most significant structural change to risk adjustment since V28 itself. The proposed exclusion of unlinked chart reviews alone represents a $7.2 billion payment reduction. Combined with a base rate increase of just 0.09%, this signals CMS's intent to fundamentally shift risk adjustment toward encounter-based, provider-generated diagnoses. Insurer stocks fell 10–20% on the announcement.
Key Dates
Major Proposals
estimated payment reduction
Diagnoses found through retrospective chart reviews that are not tied to a specific beneficiary encounter would no longer count toward risk scores.
What's excluded: Chart reviews that mine old records to find undocumented diagnoses without a corresponding clinical encounter
What's still allowed: Chart reviews linked to actual face-to-face encounters where conditions were actively managed
Impact: Effectively ends the retrospective chart mining business model as a risk-score generator
Diagnoses from audio-only (phone-only) telehealth visits would no longer count for risk adjustment. CMS rationale: phone encounters cannot include a physical examination.
Video telehealth is unaffected — only phone-only encounters are targeted. Organizations relying on phone-based HRAs for diagnosis capture will be significantly impacted.
The model would be recalibrated using 2023 diagnoses predicting 2024 expenditures, replacing the current V28 calibration data (2018 Dx / 2019 costs). This reflects the most current cost patterns available.
Current (V28)
2018 Dx → 2019 Costs
Proposed (2027)
2023 Dx → 2024 Costs
2026 (finalized)
5.06%
~$25B increase
2027 (proposed base)
0.09%
~$700M increase
Including projected risk score trends, CMS estimates effective payments would increase approximately 2.54%. But the base rate of 0.09% is the lowest proposed since the ACA era.
Market Reaction
Insurer stocks fell sharply after the January 26, 2026 announcement. The market immediately priced in the $7.2 billion chart review exclusion and the flat rate environment.
UnitedHealth (UNH)
after-hours
Humana (HUM)
after-hours
CVS/Aetna (CVS)
after-hours
Immediate Action Items
Quantify chart review dependency
Calculate what percentage of your current risk score comes from unlinked chart reviews. This is your direct financial exposure to the $7.2B proposal.
Shift to encounter-based documentation
Begin transitioning from retrospective chart mining to prospective, point-of-care diagnosis capture. This is the strategic direction CMS is mandating.
Audit audio-only telehealth diagnoses
Identify which HCC diagnoses originate from phone-only encounters and develop alternative capture strategies for those conditions.
Model 2027 financial impact
Run scenarios for your plan using the proposed 0.09% base rate, 2.54% effective rate, and chart review exclusion. Stress-test supplemental benefits and premium stability.
Submit comments before deadline
The comment period closed February 25, 2026. If you missed it, monitor the Final Rate Announcement (due April 6, 2026) for CMS responses to industry comments.
Prepare for recalibration impact
The shift from 2018/2019 to 2023/2024 calibration data will change HCC coefficient weights. Analyze your population's condition mix against the new data to identify winners and losers.