Friday, January 30, 2026-Federal health officials this week unveiled a sweeping proposal that could sharply rein in longstanding overcharges in the Medicare Advantage program, immediately roiling markets and drawing fierce industry pushback.
The Centers for Medicare & Medicaid Services (CMS) surprised insurers by proposing to hold payment increases for 2027 at near‑flat levels less than a tenth of a percent, far below expectations and pairing that with new restrictions on controversial billing practices that have inflated taxpayer costs for years. The move sent major insurer stocks tumbling and thrusts Medicare Advantage payments into the spotlight as Washington pushes for sharper fiscal discipline.
At the heart of the plan is a crackdown on “chart reviews,” a billing tactic used by many Medicare Advantage plans to generate additional diagnoses and secure higher federal payments even when patients have not reported new health issues or received corresponding treatments.
Audits and lawsuits have linked these chart review practices to billions of dollars in excess payments over the past decade, and the CMS says restricting them could produce more accurate, taxpayer‑focused reimbursement. CMS Administrator Dr. Mehmet Oz emphasized the goal is not to gut the program, but to make it work better for beneficiaries and protect federal spending from unnecessary charges.
The stakes are high: with about 34 million Americans — more than half of all Medicare enrollees — in private Advantage plans, any payment changes ripple across beneficiaries, insurers, and the broader health system.
Industry groups warn that tightening could lead to benefit cuts or higher costs for seniors and people with disabilities, and CMS will weigh public comments before a final decision expected in April. Yet experts say this proposal marks a significant shift toward reining in inefficiencies and could fundamentally reshape how private plans are paid in the nation’s largest health program.
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