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CMS’s CY 2025 Final Rule: A Quick Summary

Updated: Apr 25

The Rebellis Group cross functional team of experts has compiled a word for word analysis of this Final Rule, noting particularly significant provisions and providing key insight into some of these changes as industry advances toward CY2025, when most of the finalized rules go into effect. Our analysis also includes specific page references, suggested business unit ownership, applicable federal law citations and in a format that can be filtered by various criteria. Click here to purchase the detailed analysis, including a one-hour Q&A with Rebellis subject matter experts, or email us at



The Centers for Medicare and Medicaid Services (CMS) published “Medicare Program; Changes to the Medicare Advantage and the Medicare Prescription Drug Benefit Program for Contract Year 2024 Remaining Provisions and Contract Year 2025 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Benefit Program, Medicare Cost Plan Program, and Programs of All-Inclusive Care for the Elderly (PACE)” on April 4, 2024.

This final rule revises the Medicare Advantage (MA) (Part C),  Medicare Prescription Drug Benefit (Part D), Medicare cost plan, and Programs of All-Inclusive Care for the Elderly (PACE) regulations to implement changes related to Star Ratings, marketing and communications, agent/broker compensation, health equity, dual eligible special needs plans (D-SNPs), network adequacy, and other programmatic areas.  Significantly, it also codifies existing sub-regulatory guidance and several key provisions that remain from the Contract Year 2024 (CY24) proposed rule (CMS-4201-P), published in December 2022.  

Key Takeaways

Key takeaways from this Final Rule, as follows:


Agent/Broker Compensation 

Under current regulations, compensation for agents and brokers may be paid at a rate determined by the MA organization but may not exceed caps that CMS calculates each year, based on fair market value (FMV). Due to factors like excessive compensation, and other bonus arrangements, some monies offered by plans to agents and brokers resulted in steering of beneficiaries to some plans over others (often based on agent/broker financial interests), rather than based on the enrollee’s health care needs.  To counteract this practice, CMS has finalized a new “compensation” definition and associated requirements such that a clear, fixed amount is now required for agents and brokers to be paid irrespective of plan choice; a direct response to the exaggerated commissions and anti-competitive, anti-consumer steering practices that have occurred throughout industry.

In short, “compensation” is now inclusive of all activities associated with the sales to, or enrollment of, an individual into an MA or Part D plan.  As such, CMS has increased the national agent/broker fixed compensation amount for initial enrollments into an MA or Part D plan by $100 ($31 in proposed rule) and $50 for renewals.  The increase will be added to compensation payments for the Contract Year 2025 (CY 25) Annual Election Period (AEP) in Fall 2024 and applied to all enrollments thereafter.

A visual representation of this new compensation structure is as follows (note there is an apparent error in CMS’s calculation for 2025 renewals, which should read $363): 

Additional language in the final rule is indicative of Field Marketing Organizations (FMOs) no longer receiving separate payments for administrative services, which now aligns with anti-kickback regulations.  However, CMS has not explicitly included (or excluded) all monies paid to Third Party Marketing Organizations (TPMOs) by plans.  Several comments expressed confusion about whether the payment is an “all-in cap” inclusive of all fees paid by a plan to an agent, broker, or other TPMO, and what that would mean for payments related to marketing activities.  CMS’s response appears to indicate this new framework is limited to independent agents and brokers and does not extend broadly to all TPMOs.

Accordingly, the Final Rule appears to represent a limitation on payments in excess of those paid under “compensation” only for commissions paid for enrollments to independent agents and brokers. More specifically, CMS indicated that they are continuing to consider future rulemaking and reaffirmed that their current policy does not extend to placing limitations on payments from an MA organization to a TPMO who is not an independent agent or broker and for activities that are not undertaken as part of an enrollment by an independent agent or broker.

Notwithstanding, the Final Rule did also prohibit contract terms between MA/PDs and “middle-men” TPMOs (CMS specifically referenced FMOs), which may directly or indirectly create an incentive to inhibit an agent or broker’s ability to objectively assess and recommend a plan best suited to a potential enrollee’s needs, and the agency provided several examples of impermissible contract terms, including provisions offering volume-based bonuses for enrollment into certain plans.

Distribution of Personal Beneficiary Data by Third Party Marketing Organizations (TPMOs) 

CMS has finalized requirements prohibiting personal beneficiary data collected by TPMOs for marketing or enrolling a beneficiary into an MA or Part D plan being shared with other TPMOs, unless prior express written consent, through a clear and conspicuous disclosure for each TPMO that will be receiving the beneficiary’s data, is given by the beneficiary.  CMS’s intent is designed to address complaints from beneficiaries and advocates about receiving harassing and unwanted solicitations from individuals attempting to enroll them in MA and Part D plans while still ensuring beneficiaries have control over their personal data and allowing TPMOs to create more transparent and safer environment for beneficiaries.

Annual Health Equity Analysis of Utilization Management Policies and Procedures

As has been heavily anticipated, CMS has finalized regulatory changes to the composition and responsibilities of the Utilization Management (UM) committee.  These policies will require that at least one member of the UM committee have expertise in health equity.  These policies will also require that the UM committee conduct an annual health equity analysis of the use of prior authorization at the plan level.  The analysis will examine the impact of prior authorization on enrollees with either the Low Income Subsidy (LIS)/dually eligible social risk factor or having a disability.  To enable a more comprehensive understanding of the impact of prior authorization practices on enrollees with the specified Social Risk Factors (SRFs) at the plan level, the analysis must compare metrics related to the use of prior authorization for enrollees with the specified SRFs to enrollees without the specified SRFs.  Finally, the policies will require MA organizations to make the results of the analysis publicly available on their plan’s website in a manner that is easily accessible and without barriers.

Mid-Year Notification

To help ensure MA enrollees are fully aware of all available supplemental benefits and to promote equitable access to care, CMS is now requiring plans notify enrollees mid-year of their unused supplemental benefits.  Notices must list any supplemental benefits not utilized by the enrollee during the first 6 months of the year (January 1 to June 30).  CMS’s intent is to educate enrollees on their access to supplemental benefits to encourage greater utilization and greater stewardship of rebate dollars directed towards these benefits.  Under these new rules, if a beneficiary uses a portion of their total allowable supplemental benefits within the first 6 months of the year, that benefit is not required to be included in the notification which may still result in limited utilization and contrary to CMS’s purported intent.  This rule will also create challenges for this vendor-heavy space whereby tracking member level data and usage has already proven difficult to ramp up, and CMS’s expectation for reportability will be high.

Special Election Period (SEP) Changes for Dual Eligible Beneficiaries

Consistent with analogous actions already taken by the Biden administration, CMS has finalized various proposals to replace the current quarterly Special Election Period (SEP) with a one-time-per month SEP for dually eligible individuals and others enrolled in the Part D low-income subsidy program to elect a standalone Prescription Drug Plan (PDP).  CMS has also created a new integrated care SEP to allow dually eligible individuals to elect an integrated Dual Eligible Special Needs Plan (D-SNP) on a monthly basis, and has limited enrollment in certain D-SNPs to those individuals who are also enrolled in an affiliated Medicaid managed care organization, including limiting the number of D-SNP plan benefit packages an MA organization can offer for full benefit dually eligible individuals in the same service area where the plan offers an affiliated Medicaid Managed Care Organization (MCO). The intent and effect of this rulemaking is to increase the percentage of full-benefit dually eligible MA enrollees who are in plans that are also contracted to cover Medicaid benefits, thereby expanding access to materials and appeal processes, while continuing to receive services throughout appeals.  It will also limit the plan’s ability to enroll dually eligible individuals outside AEP, thereby reducing aggressive marketing toward dually eligible individuals.

Part D Medication Therapy Management (MTM) Program: Eligibility Criteria

CMS has established new targeting criteria for the Part D MTM program to help ensure more consistent, equitable, and expanded access to MTM services.  Part D sponsors must now include all core chronic diseases when identifying beneficiaries who have multiple chronic diseases and CMS is codifying the nine core chronic diseases currently identified in guidance in addition to HIV/AIDS, for a total of 10 core chronic diseases.  Plans still have flexibility to target additional chronic diseases beyond these 10.  CMS did not finalize the proposal at § 423.153(d)(2)(i)(B) to decrease the maximum number of Part D drugs a sponsor may require from eight to five for CY 2025, and instead retained the maximum number of drugs a plan may require for targeting beneficiaries taking multiple Part D drugs as eight, maintaining the flexibility to set a lower threshold (a number between two and eight Part D drugs) for targeting beneficiaries taking multiple Part D drugs. Additional MTM changes include:

  • Requiring sponsors to include all Part D maintenance drugs and provide flexibility to include all Part D drugs in their targeting criteria but not limit maintenance drugs included in MTM targeting criteria to specific drugs or drug classes,

  • Plans must rely on information in a widely accepted, commercially or publicly available drug information database, for the purpose of identifying Part D maintenance drugs,

  • Setting the MTM cost threshold at the average cost of eight generic drugs using Prescription Drug Event (PDE) data,

  • Codifying longstanding guidance to provide that a beneficiary must be unable to accept the offer to participate in the Comprehensive Medication Review (CMR) due to cognitive impairment, and,  

  • CMRs must include interactive consultation conducted in person or via synchronous telehealth.

Improving Access to Behavioral Health Care Providers

New behavioral health provider specialties have been added to CMS’s existing network adequacy standards.  Specifically, a new facility-specialty type, “Outpatient Behavioral Health,” will be included in network adequacy evaluations and can include providers of various types including Marriage and Family Therapists (MFTs), Mental Health Counselors (MHCs), Opioid Treatment Program (OTP) providers, Community Mental Health Centers or other behavioral health and addiction medicine specialists and facilities, as well as nurse practitioners (NPs), physician assistants (PAs) and Clinical Nurse Specialists (CNSs), who furnish addiction medicine and behavioral health counseling or therapy services. For the latter, CMS has adopted specific criteria that MA organizations must use to determine when an NP, PA or CNS can be considered part of a network to meet the Outpatient Behavioral Health network adequacy standard including independent verification the provider has furnished or will furnish services to 20 patients within a recent 12-month period using reliable information about services furnished by the provider such as claims data, prescription drug data, Electronic Health Records (EHRs), or similar. There are a host of additional changes to the program within this Final Rule like standardizing the Risk Adjustment Data Validation (RADV) appeals process, establishing contracting standards for D-SNP look-alikes, and changes to approved formularies, including substitutions of biosimilar biological products.  Rebellis will continue to review and analyze the rule, in its entirety, all of which will be available in our forthcoming complete analysis.  

In Conclusion

The 2025 changes take effect in less than 9 months, and many organizations are still planning for 2024, so don’t delay in reacting to this rule.  

You can for assistance in implementing new requirements.



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