The Insurance Lobby Has Until April 6 to Stop CMS From Freezing Medicare Advantage Rates — and Nursing Homes Are Watching

Washington, D.C. — CMS has until April 6 to decide whether to hold the line on one of the most consequential Medicare Advantage payment decisions in years — and the insurance lobby is doing everything it can to make sure that doesn’t happen.

In January, the Centers for Medicare and Medicaid Services proposed a near-flat 0.09% payment increase for Medicare Advantage plans in 2027. That’s not a typo. After years of 3–5% annual increases, the agency is essentially saying: enough. The proposal also takes aim at a billing practice insurers have used for years — so-called “unlinked chart reviews,” in which plans scour patient records for additional diagnoses without any accompanying doctor visit, inflating how sick their members appear on paper.

The goal? Clawing back some of the roughly $76 billion CMS estimates MA plans are overpaid each year.

What’s at stake for nursing homes

For skilled nursing facilities, this fight isn’t abstract. Medicare Advantage now covers a growing share of post-acute admissions, and the MA payment rate directly shapes how much leverage those plans have to squeeze providers.

When MA rates are generous, plans have more room to layer on prior authorization requirements, approve shorter lengths of stay, and build narrower SNF networks. When rates tighten, plans face real pressure to pull back on some of those tactics — or exit markets where margins are already thin.

That’s the double-edged reality operators are watching closely as the April 6 deadline approaches. It’s part of a broader pattern that industry reports have been tracking all year — one that SCJ covered in depth when MA overpayments hit $76 billion and nursing homes found themselves caught in the fallout.

The lobbying pressure is intense

Insurers and their allies have pushed back hard on the proposed rate. The Better Medicare Alliance warned that the 0.09% increase “functions as a cut,” saying medical costs are rising faster than the rate reflects. Berkeley Research Group put a number on it: the proposed risk model changes alone would amount to a $324 per-beneficiary reduction.

“For seniors, that gap has real consequences,” said Darryl Drevna of the American Medical Group Association. “When payments fall short, plans respond by narrowing provider networks, cutting supplemental benefits, raising copays, and in some cases exiting markets entirely.”

CMS Administrator Dr. Mehmet Oz responded that the agency is “committed to preserving patient choice” and that MA “remains a strong and growing option for seniors.” The agency said it would carefully consider public input before finalizing anything.

Fiscal hawks say hold firm

On the other side, the Committee for a Responsible Federal Budget argues the proposed changes would only close about a quarter of the estimated MA overpayment — and urges CMS not to back down. The nonpartisan Medicare Payment Advisory Commission has estimated MA plans will be overpaid by 14% in 2026 alone.

For nursing homes already dealing with aggressive MA prior auth denials and shortened stays, the outcome of this decision matters in ways that don’t always show up in headlines. A softer final rate notice could give plans another year of room to tighten the screws on post-acute care.

The final decision drops on or before April 6. The clock is running.