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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
👉 Follow me, Jonathan Govette, for daily, real-time updates on healthcare technology and business news. LinkedIn Profile: https://www.linkedin.com/in/jonathangovette/
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Author:
CEO/Co-Founder @ Oatmeal Health | AI Lung Cancer Screening | Almost Became a Doctor | Engineer | Follow to Share What I’ve Learned Along the Way
I help patients get the care they need earlier, preventing late-stage cancer.
That’s been the throughline across three companies and almost 20 years in healthcare. At ReferralMD, we fixed broken referral networks so patients didn’t fall through the cracks. At Oatmeal Health, it’s lung cancer: building the diagnostic and screening infrastructure so the 85% of cases caught too late get caught early instead.
Today as CEO of Oatmeal Health, I lead a team embedding AI into radiology workflows to turn routine lung CT scans into reimbursable cancer risk assessments. We partner with FQHCs to reach underserved communities, and with health systems and payers to make early detection economically sustainable. Think HeartFlow or Cleerly, but for lungs.
Between companies, I advised at Techstars and Plug and Play, mentoring founders building in digital health. That experience shaped how I think about what separates companies that ship from companies that stall: distribution, reimbursement, and clinical trust, not just technology.
I’m a CancerX alumnus, a 3x healthcare founder, and someone who believes the biggest problems in cancer aren’t scientific. They’re operational.
We’re hiring mission-driven builders at Oatmeal Health. If you want to work on something that matters, reach out.
When I’m not working, I’m traveling, mentoring, and keeping up with one very energetic husky. 🐾
Substack – The Oatmeal Bite:
Millions of patients get less care because of who they are, where they live, or how they look. I’m fighting to change that. CEO @OatmealHealth, a startup built for the underserved. The Oatmeal Bite: intel for clinicians, investors, and advocates.
Jonathan Govette
CEO of Oatmeal Health
Substack:
https://oatmealhealthjonathangovette.substack.com/
