Medicare Advantage 2025 Updates: What Are The Changes and How Will They Impact RCM

33.1 Million–That’s how many participants are enrolled in the Medicare Advantage (MA) program in 2024.

There has been a significant penetration and exponentially increasing enrollment in the MA program, according to a report by ATI Advisory, between 2023 and 2024 alone, 2.2 Million participants enrolled in this program, which is a 7.1% Y-O-Y growth. Today, 50.2% of Medicare beneficiaries are enrolled in MA plans, compared to 47.9% in 2023.

The Centres for Medicare and Medicaid Services (CMS) has proposed many updates to the MA program in 2025. The main objective of these policy changes is to improve care quality, equity, and efficiency.

With such an incredible penetration and a huge participant base, these changes will impact patients and healthcare providers and how their revenue cycle is managed. If you are a healthcare organization, an RCM professional, or an RCM solutions provider, this blog will help you stay updated and proactively adapt to these changes.

What are the Big MA Changes in 2025?

The 2025 updates focus on 3 main areas–premium adjustments, risk adjustment models, and the Medicare Advantage Star Rating Systems. These shifts highlight CMS’s commitment to implementing value-based care and equity.

1. Premium Adjustments

From 2025, CMS is adjusting the MA premiums, which is one of the most significant changes. How much is changing–the specifics vary between various regions and demographics. But the main objective behind this adjustment is that the providers serving the vulnerable population might see that their reimbursement is tied to patient income level and plan choices.

This means that the billing team has to proactively ensure that all patient demographic information is up-to-date, especially patients qualifying for additional benefits or subsidies. If these details are missed out, it could result in discrepancy in reimbursements and revenue.

2. Risk Adjustment Models

CMS has incorporated social detriments of health (SODH) along with the chronic illness severity metrics. This change is aimed at meeting the patient needs and the associated costs more accurately.

For example, a patient in a medically underserved area might have  SODH factors–like housing instability or food security–that increase the complexities. Healthcare providers must accurately code these SODH factors and ensure that they are fairly compensated for the care they provide.

Any documentation errors or gaps could lead to inaccurate coding that could result in missed revenue or, worse, penalties.

3. Overhauling the Star Ratings

For MA programs, star ratings play a crucial role in reimbursements. Starting in 2025, CMS will emphasise patient outcomes and equity metrics more, aligning reimbursements with quality care.

For example, a plan with a lower star rating might get a lower reimbursement, and the beneficiaries might opt for competitors. The RCM team must collaborate with clinical teams and ensure that the quality measures are tracked, documented, and reported accurately.

4. Streamlining Prior Authorizations

Traditionally, prior authorizations increase the administrative burden, creating issues that delay care and revenue cycles. In 2025, CMS is planning to streamline the prior authorization processes by leveraging automation and reducing manual errors.

While this change will improve efficiency, the RCM teams must adapt their workflows and integrate new technologies quickly.

How These Changes Impact RCM Teams

The overall objective of the 2025 CMS updates is value-based care, where reimbursements are linked directly to outcomes, equity, and efficiency. Let’s look at how these changes affect Revenue Cycle Management.

1. Billing Practices

With adjustments in premiums and risk models, billing practices need to be more accurate than ever. In order to maximize reimbursements, accurate demographic data collection and coding have become strategic necessities.

Action Point: Conduct regular billing audits to ensure all patient data is accurate and up-to-date.

2. Claim Processing

Since SODH is included in the risk adjustment model, the RCM team must focus on capturing and documenting every aspect of patient care. The billing team must collaborate with the clinical team to ensure that the claim accurately reflects the complexity of the care provided.

Action Point: Invest in an integrated claim processing platform, like eClaim Status, that can simplify coding and documentation.

3. Reimbursement Strategies

Star Ratings will play a more important role in determining the reimbursement levels in 2025. Low ratings could result in penalties, while higher ratings could increase revenue opportunities.

Action Point: Work proactively with clinical teams to track performance metrics in real time and address any errors and gaps in documentation or care delivery.

How can RCM Teams Prepare for 2025

Managing and proactively adapting to these changes requires a strategic approach. Here’s what Atlantic RCM recommends to help you stay ahead:

1. Leverage Technology

With the implementation of the new CMS rules, billing and coding will become even more complex. Tools like AI-driven analytics, automated claims processing, and real-time performance dashboards can be utilized to make the processes faster and more accurate.

Look for platforms that can integrate coding, documentation, and claims management into a single system.

2. Train Your Employees

Invest in frequent training to educate your employees and help them master the new coding standards and adjustment criteria.

3. Improve Team Collaboration

These policy changes require a high level of coordination and collaboration between your billing and clinical teams. Clear communication between them ensures that the care, outcomes, and equity metrics are accurately and elaborately documented.

4. Stay Informed About the Regulatory Changes

Keep yourself updated about the CMS announcements and other regulatory changes to avoid financial loss. This helps you in aligning your processes with the latest guidelines.

Let Atlantic RCM Help You Navigate These Changes

The 2025 Medicare Advantage updates might seem overwhelming at the beginning, but with the right approach, these policy changes can improve equity, efficiency, and revenue potential. By investing in the right technology, training, and strategic planning, we can help healthcare organizations adapt to these changes.

With over a decade of experience in healthcare revenue cycle management, Atlantic RCM can help you improve your financial health amidst these changing times.

Contact Atlantic RCM today to future-proof your RCM strategy.

Atlantic RCM is one of the leading multi-specialty medical billing companies in USA that serves 25+ major medical billing specialties. Our experts work across your practice in billing, collections and account receivables management, to help you succeed.

Get in touch with the leading medical billing outsourcing company to learn more. Call us at (469) 501-1500 or write to us Info@atlanticrcm.com