This overview is excerpted from Manatt on Health, Manatt’s subscription service that provides in-depth insights and analysis focused on the legal, policy and market developments. For more information on how to subscribe to Manatt on Health, please reach out to Barret Jefferds.
On May 13, an association of Medicare Advantage field marketing organizations (FMOs) filed suit against CMS, challenging new marketing restrictions in the 2025 Medicare Advantage final rule. (For more on the final rule, see the Manatt on Health analysis.) Two days later, a second set of plaintiffs representing FMOs and insurance agencies filed suit against CMS on largely the same grounds. Both cases were filed in federal district court in Texas.
The two lawsuits cite CMS statements in the rule’s preamble that suggest that Medicare Advantage Organizations (MAOs) may have to cease making administrative fee payments to FMOs, who assemble networks of agents and brokers who sell the plans of many different MAOs. The former complaint alleges that “the Rule fundamentally reorders an entire industry” and contends the rule exceeds CMS’ statutory authority, is arbitrary and capricious, and was promulgated without observance of certain procedures required under the Administrative Procedure Act. The latter complaint makes many of the same arguments, contending that ambiguities in the rule are “existential” and will drive many FMOs and agencies out of business.
For more information on how to subscribe to Manatt on Health, please reach out to Barret Jefferds.