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CMS Issues Advance Notice of Proposed Medicare Advantage Payment Changes

What’s happening: The Centers for Medicare & Medicaid Services (CMS) issued advance notice of proposed changes to Medicare Advantage (MA) Part C and Part D payments for calendar year 2025.  

What else to know: Comments are due to CMS by 2 p.m. (PT) on March 1.  

CMS estimates the proposed policies would increase MA plan revenues by an average of 3.7%. This amounts to a $16 billion increase in overall payments but represents a negative 0.16% reduction in the 2025 benchmark rate compared to current policy.  

CMS proposes updating the Part C risk adjustment model through a phased approach to reflect ICD-10 condition categories, 2018 fee-for-service (FFS) diagnoses, and 2019 FFS expenditures. 

CMS also proposes to update Part C and Part D star ratings to reflect the latest regulations and describes changes and additions to the standard Part D drug benefit under the Inflation Reduction Act of 2022.  

The final 2025 rate announcement is expected by April 1. Additional information is available in a CMS fact sheet.