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Medicare Advantage plans just got a $25 billion gift from CMS.
Here’s what nobody’s talking about:
CMS finalized a 5.06% payment increase for 2026, more than double their initial proposal of 2.23%. That’s a massive swing from cautious to generous in just a few months.
The effective growth rate jumped from 5.93% to 9.04%.
Think about that for a second.
While hospitals struggle with razor-thin margins and physician practices face mounting administrative costs, MA plans are seeing their biggest windfall in years.
This comes as the three-year phase-in of the 2024 CMS-HCC risk adjustment model reaches 100% implementation. Translation: Plans are getting better at documenting patient complexity, and CMS is rewarding them for it.
But here’s the disconnect:
Patients aren’t necessarily getting sicker. Plans are getting smarter about coding.
Meanwhile, traditional Medicare physicians saw their conversion factor increase by just 3.26%, barely keeping pace with inflation after years of cuts.
The irony? CMS simultaneously slashed skin substitute payments by 90%, saving $19.6 billion. They’re picking winners and losers with surgical precision.
💡 The real question:
Are we incentivizing the right behaviors? When MA plans get a 9% effective growth rate while primary care struggles to keep doors open, what message are we sending about healthcare priorities?
This isn’t just about payment rates. It’s about where we’re steering the entire Medicare system.
And right now, that compass is pointing firmly toward managed care, whether beneficiaries benefit or not.
♻️ Repost if Medicare payment policy needs a reality check
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Author:
Jonathan Govette is a seasoned healthcare and technology executive with more than two decades of experience building, scaling, and advising digital health companies. He is the Co-Founder and CEO of Oatmeal Health, an AI-driven Lung Cancer Screening and Diagnostics company focused on expanding access to early detection for underrepresented populations, particularly patients served by Federally Qualified Health Centers and value-based health plans.
With a background in engineering, product development, and strategic partnerships, Jonathan has founded and led multiple health technology ventures across clinical care delivery, regulated medical software, and AI-enabled diagnostics. His work sits at the intersection of medicine, technology, and health equity, with a consistent focus on translating complex clinical problems into scalable, real-world solutions.
Jonathan has spent much of his professional life dedicated to improving outcomes for marginalized and underserved communities. He has designed and implemented frameworks that align clinical quality, reimbursement, and technology to sustainably advance health equity at scale. This mission is deeply personal and informs his leadership philosophy and long-term vision for healthcare transformation.
In addition to his operating experience, Jonathan is an author and long-time writer in the healthcare domain, with over 20 years of published work covering digital health, medical innovation, and healthcare systems. He is a frequent mentor to early-stage founders and regularly advises startups on product strategy, partnerships, and go-to-market execution in regulated healthcare environments.
Before entering industry full-time, Jonathan nearly pursued a career in medicine with an early path toward cardiothoracic surgery, an experience that continues to shape his clinical perspective and respect for frontline care delivery.
CEO | Oatmeal Health | AI Lung Cancer Startup | Engineer | Writer | Almost Became a Doctor (Cardiac Thoracic Surgeon) | 3x Health Tech Founder | Startup Mentor | Follow to share what I’ve learned along the way.
