The Centers for Medicare & Medicaid Services (CMS) released the 2025 Notice of Benefit and Payment Parameters final rule and the 2025 Medicare Advantage (MA) and Part D final rule. The Association for Clinical Oncology (ASCO) submitted comments on the proposed versions of both rules. Summaries of the final rules, highlighting provisions ASCO commented on, are included below.
2025 Notice of Benefit and Payment Parameters Final Rule
ASCO has been tracking member reports on “Alternative Funding Programs (AFPs),” which are administered by third parties and allow payers to reduce their specialty pharmacy costs by partially or fully excluding coverage for high-cost, branded specialty drugs from health insurers’ prescription drug benefit as non-Essential Health Benefits (EHBs).
ASCO submitted comments in response to the 2025 Notice of Benefit and Payment Parameters proposed rule supporting a provision that would require health plans to treat drugs in excess of the state benchmark plan as essential health benefits (EHBs), making them subject to the same protections as other EHBs, which include the annual limitation on cost sharing and the restriction on annual and lifetime dollar limits.
In response to ASCO’s comments CMS finalized the proposed policy but states that the rule primarily applies to issuers of non-grandfathered individuals and small group market plans subject to the requirement to provide EHBs. The final rule does not address the application of this policy to large group market and self-insured group health plans, where ASCO members frequently report encountering these programs. CMS does understand the concerns ASCO and other stakeholders have about AFPs in self-insured and large group market health plans, and the agency intends to address the applicability of this policy to those plans in future notice and comment rulemaking. ASCO will continue to advocate on this issue.
Medicare Advantage and Part D 2025 Final Rule
Utilization Management
ASCO applauds CMS for finalizing policy requiring MA plans to analyze utilization management (UM) policies from a health equity perspective. CMS will require the MA UM committee to have at least one member with expertise in health equity, to conduct a plan-level annual health equity analysis of prior authorization policies and procedures used by the MA plan, and to make results of the analysis publicly available on the plan’s website.
The goal of the health equity analysis is to create additional transparency and identify disproportionate impacts of UM policies and procedures on enrollees who receive the Part D low-income subsidy, who are dually eligible, or who have a disability. ASCO strongly believes that CMS should also include in the health equity analysis: members of racial and ethnic minority communities; members of the lesbian, gay, bisexual, transgender, and queer (LGBTQ+) community; individuals with limited English proficiency; and members of rural communities; and that analyses should be done at a more granular level to fully understand the impact on patients with cancer. ASCO will continue to advocate for inclusion of these provisions in the new requirements.
Substitution of Biosimilar Biological Products for Reference Products
CMS is finalizing two changes allowing Part D plan sponsors to make midyear substitutions of biosimilars for their reference products on their formularies.
Part D sponsors may substitute biosimilars for their reference products without explicit prior approval by CMS. Before 2025, this has been available only for interchangeable biological products. Part D sponsors had to obtain approval before substituting biosimilars (other than interchangeable biological products), and these substitutions applied only to enrollees who began therapy after the effective date of the change. Beginning in 2025 all biosimilar substitutions will be considered “maintenance changes” meaning that midyear formulary substitutions of biosimilars for their reference products would apply to all enrollees (including those already taking the reference product prior to the effective date of the change) following a 30-day advance notice to affected enrollees.
Additionally, CMS finalized policy for interchangeable biological products not on the market at the time that Part D sponsors submit their initial formulary for CMS approval. Part D sponsors will have the option to immediately substitute a new interchangeable biological product for a reference product without advance notice to the enrollee. Notice of the change to affected enrollees may be sent after making such a change.
In comments to the agency, ASCO supported increased flexibility and efforts to enhance biosimilar use for Medicare beneficiaries; however, the Association strongly believes that substitution of a patient’s drug therapy, regardless of an “interchangeable” designation, needs to be determined between the patient and the physician and that 30 days is insufficient to fully analyze and implement that change.
Agent Compensation Guardrails
Excessive compensation and other bonus arrangements offered by plans to agents and brokers can result in individuals being steered to some Medicare Advantage and Part D plans over others based on the agent or broker’s financial interests, rather than the prospective enrollee’s health care needs. CMS is adopting new policy in this final rule to prevent such practices.
Limit Out-of-Network Cost Sharing
The rule limits out-of-network cost sharing for Medicare Advantage dual eligible special needs plans (D-SNPs) preferred provider organizations (PPOs) for specific services, including chemotherapy and radiation services, beginning in 2026. The rule will reduce cost-shifting to Medicaid, increase payments to safety net providers, expand dually eligible enrollees’ access to providers, and protect dually eligible enrollees from unaffordable costs.
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