On April 4, 2025, the Centers for Medicare and Medicaid Services (CMS) released their final rule with technical changes to Medicare Advantage (MA) and Medicare Part D Prescription Drug plans. This rule creates policy changes based on last year’s final MA payment rule and the Inflation Reduction Act (IRA). The CMS fact sheet can be found here. As this rule was proposed under President Biden and finalized under President Trump, there are, as expected, substantive changes in this final, much smaller rule.
Some of the larger changes from the proposed rule include:
- MA plans are no longer being required to cover GLP-1 type medications.
- CMS is halting creating guardrails around the use of AI within MA (although CMS did say they want to look at this in the future).
- CMS is scrapping the Annual Health Equity Analysis.
- CMS removed propose changes to MA and Part D Medical Loss Ratio (MLR) requirements
- CMS is removing mandates for MA plans to cover behavioral health at a maximum 20% copayment level and cover opioid treatments with zero copayments.
- CMS removed all draft requirements around debit card use in MA plans.
Please see below for more detail on this and other provisions.
MEDICARE ADVANTAGE PROVISIONS
Prior Authorization/Appeals
Despite concerns about reports of high rates of prior authorization requirements from MA plans to providers, CMS pulled back significantly on implemented proposals related to these concerns. The final rule restricts plans’ ability to reopen and modify previously approved inpatient hospital decisions – plans will now only be able to reopen determinations for obvious error or fraud. n addition, CMS is codifying existing guidance that requires plans to give a provider notice of a coverage decision, in addition to the enrollee, whenever the provider submits a request on behalf of an enrollee. CMS is also ensuring that a patient will not have to pay for services until the MA organization has made a claims payment.
Proposals deleted in the final rule:
- defining the meaning of “internal coverage criteria” to clarify when MA plans can apply utilization management.
- ensuring plan internal coverage policies are transparent and readily available to the public (i.e. posted on websites).
- ensuring plans are making enrollees aware of appeals rights, and addressing after-the-fact overturns that can impact payment, including for rural hospitals.
- For internal coverage criteria, regulatory language closing any loopholes being used to create prior authorizations that CMS did not intend.
Promoting Informed Choice
CMS has deleted all language in the “informed choice” selection of the proposed rule. Language was removed that would have required plans to submit their MA provider directory data to CMS for population in the Medicare Plan Finder. CMS also deleted new requirements for plans to discuss alternative funding solutions with beneficiaries such as the Part D Low-Income Subsidy Medicare Savings Programs.CMS also deleted language to expand its oversight of MA and Part D marketing and communication materials.
Dual Eligibles Provisions
To reach its goal of reducing fragmentation for dual-eligible beneficiaries , CMS is proposing that Dual Eligible Special Needs Plans (D-SNPs) be required to do the following:
- Have integrated member identification (ID) cards that serve as the ID cards for both the Medicare and Medicaid plans in which an enrollee is enrolled.
- Conduct an integrated health risk assessment (HRA) for Medicare and Medicaid rather than separate HRAs for each program.
- Codify timeframes for all SNPs to conduct HRAs and individualized care plans (ICPs) and prioritize the involvement of the enrollee or the enrollee’s representative, as applicable, in the development of the ICPs.
There are no changes in this section between the proposed and final rules.
Non-allowable Special Supplemental Benefits for the Chronically Ill (SSBCI)
SSBCI are benefits that can be offered non-uniformly to qualifying MA enrollees with chronic conditions. These supplemental benefits may be non-primarily health-related; however, the benefit must have a reasonable expectation of improving or maintaining the health or overall function of the chronically ill enrollee. This rule establishes guardrails for these benefits by codifying a list of non-allowable examples (e.g., non-healthy food, alcohol, tobacco, cosmetic surgery, life insurance). These provisions were in the proposed rule and have been finalized – so they are not directly tied to the “Make America Health Again” program.
Program of All-Inclusive Care for the Elderly (PACE) and Cost Plans
This rule codifies requirements for PACE organizations and cost plans to submit risk adjustment data to CMS. These entities already do this, for the most part, but this provision puts it into regulation.
MEDICARE PART D PROVISIONS
Vaccine Cost-Sharing
This provision implements section 11401 of the IRA requiring that the Part D deductible will not apply to, nor is there any cost-sharing for, adult vaccines recommended by the Advisory Committee on Immunization Practices (ACIP). This includes common vaccines like flu, HPV, COVID-19, Shingles, and other vaccines for more rare occurrences like anthrax and Dengue Fever.1 No change from the proposed rule.
Insulin Cost-Sharing Changes
This proposal implements section 11406 of the IRA requiring that the Medicare Part D deductible will not apply to covered insulin products and that the Part D cost-sharing amount for a one-month supply of each covered insulin product must not exceed the statutorily defined “applicable copayment amount” for all enrollees. The applicable copayment amount for 2023, 2024, and 2025 is $35. From 2026 on, a decision tree will be used for the copayment based on drug prices for that year. No change from the proposed rule.
Medicare Prescription Payment Plan
The rule continues the existing provisions of the Medicare Prescription Payment Plan, which allows Part D enrollees to spread out-of-pocket costs out throughout the year, through 2026 – but adds two new features. First, CMS created an automatic renewal process for the beneficiary for the next calendar year unless the enrollee opts out. Second, CMS finalized a requirement for Part D sponsors to effectuate election requests received via phone or web in real time for 2026 or future years. The final rule does make one change which is to exempt D-SNPs from having to provide beneficiaries with hard copy mailing materials for plan election or education information.
Pharmacy Network Transparency for Pharmacies and Beneficiaries
CMS is now requiring Part D plans to provide contracted pharmacies with information about which Part D plans they are in-network for before open enrollment and afterward on request. However, CMS removed a provision that would have allowed pharmacies to terminate their network contracts without cause after the same notice period that the sponsor is allowed to terminate pharmacy network contracts without cause.
Biosimilar and Generic Drugs
CMS clarifies existing law that drug plans must provide beneficiaries with broad access to generics, biosimilars, and other lower-cost drugs. CMS is making this statement because of reports from external entities that pharmacy benefit managers (PBMs) and Part D plans have been favoring more expensive brand drugs and reference biological products over generics, biosimilars, and other lowercost drugs in terms of formulary placement decisions. In one change, the final rule removes a provision that would have had CMS reviewing formularies for generic and biosimilar drug inclusion. However, CMS does state that they “may consider codifying additional requirements regarding formularies in future rulemaking if necessary.”