CMS Releases CY 2025 Advance Notice for Medicare Advantage and Part D

By and on March 21, 2024

On January 31, 2024, the US Centers for Medicare & Medicaid Services (CMS) released the Advance Notice of Methodological Changes for Calendar Year (CY) 2025 for Medicare Advantage (MA) Capitation Rates and Part C and D Payment Policies. CMS also released a press release and fact sheet. The advance notice is released on an annual basis and includes proposed updates to the capitation and risk adjustment methodologies used to calculate payments to MA plans, as well as other payment policies that impact Part D. The final CY 2025 rate announcement will be published no later than April 1, 2024.

The advance notice discusses several updates the Inflation Reduction Act of 2022 (IRA) made for 2025, including:

As a result of the IRA, CMS proposes updates to the Part D risk adjustment model to reflect the Part D benefit design.

CMS is annually required to update the parameters for the defined standard Part D drug benefit. This is meant to ensure that the actuarial value of the drug benefit tracks changes in Part D expenses. For non-low-income subsidy beneficiaries, the advance notice outlines the benefit parameters for defined standard benefits in 2025 as follows:

Emily Curran
Emily R. Curran focuses her practice on healthcare regulatory and compliance issues in the managed care space. She counsels both for-profit and non-profit healthcare insurance companies on state and federal policy issues and advises clients on reimbursement issues that come into play when participating in government healthcare programs. Emily also supports the Firm’s transactional work. Read Emily Curran's full bio.

Kristen O'Brien
Kristen O’Brien is an accomplished healthcare executive with a deep understanding of regulatory advocacy and healthcare policy efforts. Kristen offers a strong background and a keen eye for solutions to barriers and challenges impacting healthcare clients. With more than 10 years of experience, her work focuses on implementing new laws through the rulemaking process, as well as working with relevant agency officials to develop and improve agency guidance. Read Kristen O’Brien's full bio.




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