Radar on Medicare Advantage
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News Briefs: CMS Finalizes 2.8% Physician Fee Cut, While 2026 MA Rule Is Still at OMB
CMS on Nov. 1 released the 2025 Medicare Physician Fee Schedule Final Rule, which called for a 2.8% pay cut. That’s despite an estimated 3.5% increase in the costs of delivering care, pointed out the American Medical Association (AMA). “For physician practices operating on small margins already, this means it is harder to acquire new equipment, harder to retain staff, harder to take on new Medicare patients, and harder to keep the doors open, particularly in rural and underserved areas,” said AMA President Bruce Scott, M.D., in a statement issued the same day. CMS on Nov. 1 also issued the 2025 Home Health Prospective Payment System Final Rule, which included a 0.5% aggregate increase in payments to home health agencies, compared to 2024.
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MA Experts View Harris’ ‘Medicare at Home’ Proposal With Hope, Reservation
In a late-stage effort to pump up her health care platform and potentially sway senior voters and their "sandwich generation" caregivers, Vice President Kamala Harris unveiled a plan to bolster the Medicare program by introducing a “Medicare at Home” benefit while also adding hearing and vision coverage to traditional, fee-for-service (FFS) Medicare. The proposal drew a great deal of optimism from senior advocates and industry observers, but its potential $40 billion price tag caused supporters and skeptics alike to question whether funding such a benefit is truly feasible.
If enacted, it would become a required offering of Medicare Advantage plans, which may be well-positioned to maximize such an opportunity, industry experts tell AIS Health, a division of MMIT.
According to an outline of the plan, which was unveiled by the Democratic presidential nominee and running mate Tim Walz on Oct. 8, the benefit would for the first time cover home care for all seniors and those with disabilities on Medicare who need it. The new services covered by Medicare would include at-home assistance with activities of daily living (ADLs) performed by home health aides, personal care attendants or direct care workers, and it would be tailored to fit seniors’ long-term care needs. It also seeks to improve wages for care workers.
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Humana, UnitedHealthcare Hit Hard as Star Ratings Decline for Third Year
CMS on Oct. 10 released the 2025 Medicare Advantage and Part D Star Ratings, revealing a continued decline in the number of plans achieving high ratings. Only 40% of Medicare Advantage Prescription Drug (MA-PD) contracts earned 4 stars or higher for the 2025 plan year, though 62% of all MA-PD members are enrolled in these highly rated contracts, which will qualify for bonus payments in 2026. This marks the third consecutive year of declining ratings, reflecting the continued return to normal after pandemic-era flexibilities and the impact of the second year of the Tukey outlier deletion methodology, which in some cases “caused an upward shift in cut points,” CMS explained. Just seven contracts received a 5-star rating, a steep decline from 38 in 2024. An additional seven contracts — five from Centene Corp., one from CVS Health Corp.’s Aetna and one from Zing Health — received the "low-performing" indicator.
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2025 Star Ratings Deliver ‘Reckoning’ That Will Drive Quality, Leading Expert Says
CMS on Oct. 10 revealed that 40% of Medicare Advantage Prescription Drug (MA-PD) plans — or 209 contracts — that will be offered in 2025 earned an overall Star Rating of 4 or higher, thus qualifying for quality bonus payments (QBPs) in 2026. That percentage compares with 45% of MA-PDs after CMS’s unprecedented recalculation of the 2024 Star Ratings and follows a continued decline in overall ratings since the expiration of pandemic-era flexibilities. The 2025 Star Ratings also resulted in just seven MA-PD contracts earning 5 stars, compared with 38 in 2024, while the average overall MA-PD rating fell from 4.07 to 3.92.
Prior to CMS’s release of the 2025 Star Ratings, industry analysts had signaled that nearly two-thirds of measure-level cut points increased from the 2024 Star Ratings, meaning contracts in general had to achieve higher performance on these measures to perform well. This was also the second year that CMS applied the new Tukey outlier deletion methodology to the clustering methodology used to establish cut points for the non-Consumer Assessment of Healthcare Providers and Systems (CAHPS) measures. And it was the second year in which CMS used new cut point “guardrails” to limit the upward and downward movement of cut points by 5% in either direction, which was the primary source of controversy in the 2024 Star Ratings.
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Closer Looks at 2025 Medicare Advantage Landscape Show Retreats and Realignments
In the weeks following the Sept. 27 release of the 2025 Medicare Advantage and Part D landscape files and other key information, experts taking a deeper look at next year’s plan offerings agree that there’s not one linear story that can be told about the market. Of the clear takeaways, MA insurers are making strategic service area reductions, continuing to invest in Special Needs Plans (SNPs) addressing chronic conditions and dual eligibles, and shifting around various plan design elements to maintain $0 premiums. Given plans’ repositioning efforts and benefit changes that may not all be obvious, experts say Medicare beneficiaries will likely need to shop around during the Annual Election Period (AEP), which began on Oct. 15.
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