Medicare Advantage Plans Need to Align Rewards and Incentives Programs With 2022 CMS Regulations


On 1/19/2021, the Centers for Medicare & Medicaid Services (CMS) published its 894-page final rule and included an important regulatory change for Medicare Advantage (MA) plans. On page 372 of the rule, CMS described changes to regulations for rewards and incentives (R&I) programs that were underreported on at the time.

Under this regulation, which went live on 1/1/2022, MA plans must provide equitable access to rewards programs and offer rewards to all Qualifying Individuals—meaning any member who is eligible for a covered benefit.

With this rule now in effect, MA plans need to drastically change the way they handle R&I programs—or potentially face plan sanctions that would prohibit signing up new members.

What’s Behind the 2022 R&I Regulation

While R&I programs have been adopted in various forms by MA plans, the view of CMS is that plans have been targeting R&I programs too narrowly toward retention and not treating all members equitably.

Federal healthcare regulators in the Biden administration are laser-focused on health equity across the board: The administration underscored its focus on health equity by putting it on the first page of the 2022 Medicare Advantage Readiness Checklist. This change to R&I programs is one way that CMS is working to eliminate potentially discriminatory practices from MA plans and expand health equity.

“Regulators want to ensure equivalent treatment for MA members of all ages and health statuses,” says Melissa Smith, Healthmine EVP of Consulting and Professional Services and an expert on MA quality improvement strategies. “HEDIS excludes many very elderly, very ill members and younger, disabled members—and for quality-measurement purposes, that’s with good reason. But for R&I purposes, CMS views this as a short cut that leaves out too many members.”

Three Keys for MA Plans-Embedded Blog Graphic

While CMS has been very hands-off in its monitoring of R&I programs since they began with the 2014 plan year, Smith says MA plans need to recognize this shift in tone from CMS. “The 2022 regulation lays the groundwork for CMS to go after bad actors in this area,” Smith says. “It’s easy for CMS to go beyond the most egregious examples, so I recommend plans avoid this risk with a sound operational plan.”

Compliance Options for MA plans

MA plans can approach compliance with the regulation in a few ways.

“One approach to meeting the regulatory standards would be to search claims to identify eligible members,” says Healthmine Senior Director of Government Programs James Haskins. “To do this, plans would need to develop queries for every health activity associated with a rewards program. That takes a lot of IT resources at a time when the industry faces a severe shortage of quality IT professionals.”

Another approach would rely on clinical rules to identify eligible members, and then confirm that the health action was completed through claims or self-attestation. According to Haskins, this approach is more flexible than HEDIS and less resource-intensive than relying on querying claims, but it may still fall short of full compliance. A member whose personal or family health history calls for receiving a screening more often than clinical guidelines suggest could be missed under this approach.

Healthmine offers a rewards technology solution that simplifies the operational impact of complying with this regulation. Our solution identifies the members who qualify for an incentive based on an MA plan’s rewards program, tracks incentivized health actions, and then initiates the process of sending the rewards to qualified members. If you would like to see first-hand how our rewards technology solution complies with CMS’ regulations while improving plan performance, request a demo from our team.

Download the FAQ on new rewards and incentives regulations from CMS

Melissa is a well-known thought leader and healthcare strategist with proven success developing enterprise-wide solutions to improve Star Ratings, HEDIS scores, quality performance, health outcomes, and the member experience. As EVP of Healthmine’s advisory division, she helps clients evaluate market dynamics and opportunities, optimize distribution channels, and fulfill strategic planning needs.

More Resources from Melissa Smith

As Senior Director of Government Programs, James ensures that Healthmine’s solutions have a strong positive impact on performance by acting as a subject matter expert on government programs including Medicare Advantage, Medicaid, and ACA/Commercial. A forever-learner and thorough researcher, James is the go-to resource for what’s up and coming in the healthcare space. He is passionate about leveraging technology and advanced analytics to engage members in their health.

More Resources from James H. Haskins IV

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