Contract Year 2025 Policy and Technical Changes to the Medicare Advantage Plan Program, Medicare Prescription Drug Benefit Program, Medicare Cost Plan Program, and Programs of All-Inclusive Care for the Elderly, and Health Information Technology Standards
On November 6, 2023, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that would revise the Medicare Advantage Program (MA), Medicare Prescription Drug Benefit Program (Part D), Medicare Cost Plan Program, Programs of All-Inclusive Care for the Elderly (PACE), and Health Information Technology Standards and Implementation Specifications. The proposed policies build on existing Biden-Harris policies to strengthen beneficiary protections and guardrails to promote healthy competition and ensure Medicare Advantage plans best meet the needs of beneficiaries. In addition, these proposed policies would promote access to behavioral health care providers, promote equity in coverage, and improve supplemental benefits.
On December 14, 2022, CMS issued CMS-4201-P, which proposed revisions to regulations governing MA, Part D, Medicare cost plans, PACE, and Health Information Technology Standards and Implementation Specifications. All the provisions included in the proposed rule CMS-4201-P were open for public comment from December 14, 2022, to February 13, 2023. On April 5, 2023, CMS issued final rule CMS-4201-F, which finalized several provisions proposed in CMS-4201-P. CMS intends to address a number of the remaining provisions from the proposed rule, CMS-4201-P, in future rulemaking, including in the final version of this rule.
This fact sheet discusses the major provisions of the 2025 proposed rule. The proposed rule can be downloaded here: https://www.federalregister.gov/public-inspection/current.
Enhancements to Medicare Advantage and Medicare Part D
New Guardrails for Plan Compensation to Agents and Brokers to Stop Anti-competitive Steering.
Many beneficiaries rely on agents and brokers to help navigate complex Medicare choices as they comparison shop for coverage options. The Medicare statute requires that CMS’s marketing standards ensure that CMS develops guidelines to ensure that the use of compensation creates incentives for agents and brokers to enroll individuals in the Medicare Advantage plan that is intended to best meet their health care needs. However, financial incentives to agents and brokers, more readily paid by large plans, can result in beneficiaries being steered to some Medicare Advantage plans over others based on excessive broker and agent compensation and other bonus arrangements—rather than recommending plans based on the prospective enrollee’s best interests.
Specifically, CMS is proposing to redefine “compensation” to set a clear, fixed amount that agents and brokers can be paid regardless of the plan the beneficiary enrolls in, addressing loopholes that result in commissions above this amount that create anti-competitive and anti-consumer steering incentives. The proposal ensures the payment of agent and broker compensation reflects only the legitimate activities required of agents and brokers by broadening the scope of the regulatory definition of “compensation” so that it is inclusive of all activities associated with the sales to/enrollment of a beneficiary into a Medicare Advantage plan or Part D plan. The proposed national agent/broker fixed compensation amount for Medicare Advantage is $642. This proposed fixed amount for Medicare Advantage compensation, compared to the existing national compensation cap of no more than $611, would eliminate the current variability in payments and improve the predictability of compensation for agents and brokers.
Additionally, the proposed rule would generally prohibit contract terms between Medicare Advantage plan organizations and marketing middlemen, such as field marketing organizations, that result in things such as volume-based bonuses for enrollment into certain plans, which may interfere with the ability of agents or brokers to assist the enrollee in finding the plan that is best suited to their needs.
These proposed policies advance the goals of President Biden’s historic Competition Council and Executive Order signed in July 2021 by helping to ensure a robust and competitive Medicare Advantage marketplace