Americans for Beneficiary Choice Wins Medicare Advantage Broker Compensation Ruling Lawsuit

A ruling for a notable lawsuit against the Department of Health and Human Services (HHS) has been reached.

A district court judge in Texas ruled in favor of Americans for Beneficiary Choice (ABC) and other broker groups, nullifying Medicare Advantage broker and agent compensation rules previously made by the Centers for Medicaid & Medicaid Services (CMS).

CMS 2025 Final Rule Provisions Vacated

On August 18, 2025, a Texas judge vacated provisions in the 2025 Medicare Advantage and Part D Final Rule that would have implemented a fixed broker and agent compensation rate and raised the pay cap for new enrollments by a significant amount. Additionally, the final rule provisions would have eliminated volume-based bonuses and certain contracts between MA plans and third-party marketing organizations.

Medicare Advantage Lawsuit and Stay

The ruling comes after Americans for Beneficiary Choice (ABC), among other organizations, sued the Department of Health and Human Services (HHS) regarding the 2025 final ruling Medicare commissions changes. On July 3, 2024, the U.S. District Court for the Northern District of Texas issued a stay to the changes pending the resolution of the litigation.

Final MA Agent Compensation Lawsuit Ruling

Now this journey of uncertainty has come to a conclusion. The Texas judge sided with the plaintiffs determining that CMS does not have the authority to regulate administrative payments or reimbursements for the services brokers and agents provide. The court determined the rule exceeded statutory authority and violated the Administrative Procedures Act. As it stands now, CMS can only regulate how compensation is used, not “engage in ratemaking.”

Regarding provisions made on third-party marketing organizations, the court upheld the banning of these firms from distributing personal beneficiary data (names, addresses, and phone numbers) to other marketing organizations without consent.

Looking Ahead

CMS will issue a 2027 MA and Part D proposed rule in the next several months, which may again propose changes to how broker and agent payment is regulated.

As always, Ritter will be here to report news and updates and provide support for whatever the future holds within this industry.

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