News: MA and Medicare Part D payment updates finalized for CY 2025

The Centers for Medicare and Medicaid Services (CMS) has finalized payment updates for the 2025 Medicare Advantage (MA) and Medicare Part D Programs, according to a recent press release.

Under the new CY 2025 rates, government payments to MA plans are expected to increase, on average, by approximately 3.7% ($16 billion) from the 2024 rates. CMS will also be finalizing improvements to the 2025 Medicare Part D drug benefit program that will “result in lower drug costs for millions of people with Medicare.”

“We are also pleased to finalize guidance on the new $2,000 out-of-pocket cap for prescription drugs under Medicare Part D in 2025, which was enacted in the President’s prescription drug law. This new provision will provide meaningful additional cost savings and relief to enrollees who have been facing high and rising drug costs,” said CMS Deputy Administrator and Director of the Center for Medicare Meena Seshamani, MD, Ph.D.

Here are some other features of the finalized payment updates for CY 2025:

• In CY 2025, CMS will continue the phase-in of the technical adjustment described in the CY 2024 rate announcement, applying 52% of the technical adjustment
• In CY 2025, CMS will continue to phase-in the updated risk adjustment model by “blending 67% of the risk score calculated using the updated 2024 MA risk adjustment model with 33% of the risk score calculated using the 2020 MA risk adjustment model”
• The Part D benefit Inflation Reduction Act updates—such as the elimination of the coverage gap, and the $2,000 out-of-pocket cap—will remain in place throughout CY 2025

Editor’s note: To read the CMS press release, click here. To read the CMS fact sheet on the MA and Part D rate announcement, click here.