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5 High Impact Areas in the MA Advance Notice & Proposed Rule

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This month, the Centers for Medicare & Medicaid Services (CMS) proposed changes to Medicare Advantage (MA) through the annual Advance Rate Notice and Proposed Rule. These proposals impact MA in many ways, including changes to quality bonus payments, network adequacy requirements, coverage of End Stage Renal Disease (ESRD), plans targeting dual eligibles, and supplemental benefit offerings. Stakeholders should examine each of these areas closely as they respond to CMS.

On February 5, the CMS released the 2021 and 2022 Medicare Advantage (MA) and Part D Proposed Rule and Part II of the MA and Part D 2021 Advance Notice.

The 5 issues below warrant greater attention during the comment period, as they may have significant impact on plans, beneficiaries, and other stakeholders.

  1. Changes to Medicare Advantage Star Ratings—CMS proposed 2 major changes to the calculations of a plan’s star rating that may affect a plan’s total payment. First, CMS is proposing a new method to eliminate outliers from its calculation of star rating cut points that would have the effect of reducing overall ratings of some contracts. Secondly, CMS is proposing to increase the assigned weight of certain patient-experience measures, which may increase the star rating of certain contracts. Combined, CMS estimates these 2 policies will reduce overall payments to MA plans. Understanding which star rating measures are impacted by the outlier proposal and how plans should respond to both changes will be critical to retaining a high overall rating.
  2. Flexibility Around Network Adequacy Requirements –The President’s Executive Order released last October called for changes to network adequacy requirements. The proposed rule would allow MA plans greater flexibility in forming networks.  Specifically, MA plans that operate in service areas affected by state certificate-of-need laws and MA plans that contract with certain specialties via telehealth would receive greater flexibility in meeting CMS requirements. Additionally, plans operating in rural areas would have reduced requirements under CMS’s proposal. Plans, providers, and other stakeholders should seek to understand how these changes may impact contracting with and the availability of MA in certain markets.
  3. Limitations to “D-SNP Look-Alike Plans”MedPAC has highlighted its concern over a growing number of MA plans that adjust their benefit structure to enroll a disproportionate share of dually eligible beneficiaries while not having to meet requirements in place for Dual Eligible Special Needs Plans (D-SNPs). In the proposed rule, CMS intends to no longer enter into or renew contracts with “D-SNP Look-Alike” MA plans in a state where there is a D-SNP and proposes to transition enrollment of these plans to other MA plans. Understanding the number of enrollees impacted by these changes may help stakeholders respond to this proposal.
  4. Modifications to MA that Account for ESRD Enrollment – Starting in 2021, all beneficiaries with ESRD will be permitted to enroll in MA. CMS proposes some changes related to ESRD. For instance, CMS proposes to introduce a third maximum out of pocket (MOOP) limit for plans to offer and to require that the MOOP thresholds take into account ESRD costs. However, CMS did not include major revisions to the payment methodology. An Avalere analysis found that payments to MA plans for ESRD beneficiaries may be inadequate. Specifically, Avalere found that in 10 of the top 15 MSAs with the most ESRD patients, payment to MA plans would be less than the fee-for-serice spending on ESRD patients. MA plans will need to assess whether the changes included in the Advanced Notice and Proposed Rule are sufficient to fully prepare for the ESRD population in 2021.
  5. Increased Flexibility Around Supplemental Benefits – The Bipartisan Budget Act of 2018 provided MA plans with greater flexibility to offer more expansive supplemental benefits to beneficiaries with specific chronic conditions. The list of chronic conditions CMS is currently using to define which enrollees may receive these added services is the same list of conditions used to determine if an enrollee is eligible to enroll in a chronic care special needs plan. Under the proposed rule, CMS would allow MA plans to offer these supplemental benefits to a larger enrollee population, so long as the enrollee has a chronic condition that is life threatening or significantly limits the overall health or function of the enrollee. Understanding which specific patient populations would most benefit from new or expanded supplemental benefits will be key for plans in deciding how to structure benefit offerings in the future.

Comments to CMS are due on March 6 for the Advance Notice and on April 6 for the Proposed Rule.

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