Significant network adequacy changes for Medicare Advantage

On May 9, 2022, CMS released a Final Rule which makes significant changes to Medicare Advantage (MA) network adequacy requirements for Contract Year 2024, filing as early as February 2023. Initial and expanded service area applicants will be required to submit a compliant network during the application process beginning with the 2024 application cycle. Previously, applicants needed only to attest to, not demonstrate, compliance with regulatory network adequacy standards.

CMS is implementing these changes to strengthen its oversight of applicants’ ability to provide an adequate network of providers to deliver care to MA enrollees while improving the integrity and transparency of the bidding process. It will allow for CMS to provide information to applicants regarding their network adequacy in advance of bid submissions, thereby lessening the need for late changes and the issues associated with them.

Applicants who intend to go live in new markets beginning January 1, 2024, must submit their contracted provider network in February 2023 during the application process. Previously, initial and service area expansion applicants submitted their initial provider networks in June, with a final network submission in August.

CMS recognizes the difficulty some applicants may face in building a full network almost a year in advance and have included two provisions addressing it:

  • CMS will allow a 10% credit or 80% towards network adequacy based on published time and distance standards during the February 2023 submission in lieu of the required 90% of the proposed service areas for Medicare beneficiaries
  • CMS will allow Letters of Intent (LOIs) to be submitted in lieu of signed provider agreements at the time of application and for the duration of the application review period. Once the plan is set to go live beginning 1/1/24, applicants must meet the 90% network adequacy threshold and have converted all LOIs to full provider agreements.

Applicants who are considering initial and service area expansions need to begin acting now. The Mazars Strategy Team has experienced national and local resources who can support provider contract negotiations, operational implementations, and implement advanced technology tools to successfully support organizations that are contemplating participation in the Medicare Advantage program. This includes network contracting, application submission support, data analytics and credentialing.

The information provided here is for general guidance only, and does not constitute the provision of tax advice, accounting services, investment advice, legal advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal or other competent advisers.

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Significant network adequacy changes for Medicare Advantage
Significant network adequacy changes for Medicare Advantage