As part of its 2025 Medicare Advantage and Part D Final Rule (the Final Rule), the Centers for Medicare & Medicaid Services (CMS) finalized a number of regulatory changes relating to how Medicare Advantage (MA) plans offer supplemental benefits and how they communicate such benefits to plan members. As previewed in the Proposed 2025 Rules, the Final Rule outlines CMS’s intentions to (i) more closely monitor the supplemental benefits that a Medicare Advantage organization (MAO) offers and categorizes as "Special Supplemental Benefits" for the Chronically Ill (SSBCI) and (ii) require MA plans to send annual notices to MA plan enrollees regarding their available supplemental benefits.

Changes Relating to SSBCI

CMS finalized regulatory changes that will help ensure that MAOs more carefully consider whether the SSBCI offered by their MA plans are appropriate and meet applicable statutory standards. CMS finalized an updated definition of SSBCI to align with the requirement set forth in the Social Security Act that requires “an item or service offered as an SSBCI [to] have a reasonable expectation of improving or maintaining the health or overall function of the chronically ill enrollee.” Previously, CMS provided MA plans “broad discretion” in choosing which items or services offered as SSBCI would meet the statutory requirement. The burden of reviewing and approving the bids and plan benefit packages for eligibility ultimately fell on CMS. Due to the increase and expansion of SSBCI offerings in recent years, CMS has decided to revise the submission requirements, so that an MAO must be prepared to demonstrate that its submissions will meet the expectation requirements upon request during the bid process.

In furtherance of the above, CMS finalized the following requirements: 

• In support of its bid (submitted earlier this week), an MAO must establish, and make readily available to CMS upon request, a bibliography of “relevant acceptable evidence” that an item or service offered as SSBCI in the form of additional primarily health-related supplemental benefits or SSBCI offered in the form of non-primarily health related supplemental benefits has a reasonable expectation of improving or maintaining the health or overall function of a chronically ill enrollee, and for each citation in the bibliography, a hyperlink must be provided;
• An MA plan must follow its written policies based on objective criteria for determining an enrollee’s eligibility for an SSBCI when making such eligibility determinations; and
• An MA plan must document both denials and approvals of SSBCI eligibility.

Additionally, CMS codified its authority (i) to decline an MAO’s bid, if CMS determines that the MAO has not demonstrated, through relevant acceptable evidence, that an SSBCI has a reasonable expectation of improving or maintaining the health or overall function of a chronically ill enrollee; and (ii) to review, annually, the items or services that an MAO includes as SSBCI in its bid for compliance with all applicable requirements, regardless of whether an SSBCI offering was approved in the past.

Mid-Year Enrollee Notification of Available Supplemental Benefits

According to CMS, in recent years, there has been: (1) an increase in the number of MA plans offering supplemental benefits, (2) a broadened scope and range of supplemental benefits that MAOs offer, and (3) a notable growth in the amount of MA rebate dollars directed to such supplemental benefits. Additionally, CMS noted that MAOs might highlight the supplemental benefits that they offer in marketing material to try to attract members, and shared its concern that some MAOs might be using supplemental benefits to steer members into plans but then not taking steps to ensure plan members are using the supplemental benefits included in their plans. To encourage greater utilization of supplemental benefits and to “ensure MA plans are better stewards of the rebate dollars directed towards these benefits[,]” beginning with plan year 2026, MAOs will be required to send annually a mid-year notice to enrollees listing any supplemental benefits not utilized by the enrollee by June 30 of a given year. While CMS anticipates the implementation of annual notifications to lead to increased costs for MAOs, CMS ultimately expects the notification system to generate cost savings for plan enrollees. By using their supplemental benefits, enrollees may prevent certain health problems from manifesting and may detect early signs of health complications that would require costlier intervention if left undetected.

The notice requirements relating to supplemental benefits are just one of the many changes that CMS adopted in the Final Rule that can be categorized as a new or re-focused beneficiary protection measure.