Blue KC keeps watchful eye on 2025 CMS Proposed Rule for Medicare Advantage and Part D
On November 6, 2023, the Centers for Medicare and Medicaid Services (CMS) released the 2025 Medicare Advantage Proposed Rule, including new guardrails for plan compensation to agents and brokers, in an effort to stop “anti-competitive steering.”
CMS acknowledges many beneficiaries rely on agents and brokers to help navigate Medicare choices. The Medicare statute requires that CMS develop marketing guidelines to ensure the use of compensation creates incentives for agents and brokers to enroll individuals in Medicare Advantage plans that best fit their healthcare needs.
CMS specifically cites: “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.”
Blue KC is keeping a watchful eye on these proposed changes:
- 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. This proposal ensures the payment of agent and broker compensation reflects only the legitimate activities of agents and brokers. CMS proposes 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. The proposed amount for 2025 is $642 ($31 more than 2024).
- CMS would prohibit contract terms between Medicare Advantage plan organizations and agents, brokers, and other third-party marketing organizations (TPMOs) that “may interfere with the agent’s or broker’s ability to objectively assess and recommend the plan which best fits a beneficiary’s health care needs.”
Blue KC understands the value of agencies and the pivotal role they play in supporting independent agents with essential services like contracting, credentialing, compliance, technology support, and their impact on Medicare-eligible individuals and their well-being.
Other areas we are monitoring:
- Requirement that plans send a mid-year communication to all enrollees to inform them of unused supplemental benefits.
- Adjustment of formulary change procedures to increase and accelerate in-year uptake of FDA-approved biosimilars. Biosimilars are biologic medicines that are highly similar to an already approved medicine and can be manufactured when the original product’s patent expires. CMS expressed this policy shift would enable MA enrollees to more timely access to cheaper therapeutically equivalent drugs and overall support competition in the prescription drug marketplace.
