Medicare Cost Plans
A Cost Contract provides the full Medicare benefit package. Payment is based on the reasonable cost of providing services. Beneficiaries are not restricted to the HMO or CMP to receive covered Medicare services, i.e. services may be received through non-HMO/CMP sources and are reimbursed by Medicare intermediaries and carriers.
Organizations that have current Medicare Cost Contracts with CMS can download operational policy information and updates below. Organizations that would like to apply for a Medicare Advantage Cost Contract must download and complete the application below. The Application Form file provides instructions on how to use each file. Files can be viewed and downloaded in .zip format.
COST PLAN COMPETITION REQUIREMENTS AND TRANSITION TO MEDICARE ADVANTAGE (MA)
The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) amends the cost plan competition requirements specified in section 1876(h)(5)(C) of the Social Security Act (the Act).
The competition requirements provide that CMS non-renew cost plans beginning contract year (CY) 2016 in service areas where two or more competing local or regional Medicare Advantage (MA) coordinated care plans meet minimum enrollment requirements over the course of the entire prior contract year. Implementation of the statute means that affected plans would be non-renewed at the end of CY 2016, and will not be permitted to offer the cost plan in affected service areas beginning CY 2017.
MACRA (1) delays the non-renewal requirement for cost plans affected by the competition requirements by two years to CY 2019 and revises how enrollment of competing MA plans is calculated for the purpose of meeting the competition requirements; (2) permits cost plans to transition to MA by CY 2019; and (3) allows organizations to deem their cost enrollees into successor affiliated MA plans meeting specific conditions.
Under MACRA, the assessment as to whether an MA plan meets minimum enrollment thresholds for the cost plan competition requirements is based on the MA enrollment in the portion of the cost plan service areas where there are competing MA plans, not the entire Metropolitan Statistical Area (MSA) of the competing MA plans. In cases where the service area of the cost plan and MA plans are in different MSAs, MA enrollment will be based on the MSA in which the actual competition occurs.
We include guidance documents specifying policies and operational processes of the transition to MA at the links below. Policies discussed below include; (1) contracting; (2) enrollment conversion; (3) benefits and access (4) notification; (5) payment; and (6) agent/broker fees and (7) star ratings.
Cost Transition Notice * NOTE *
We want to remind organizations that any plan wishing to deem enrollees from its cost plan to one of its MA plans under the MACRA provisions must notify CMS of that intention via the HPMS crosswalk process. This may be completed as early as May of 2018 for enrollments in 2019, the final contract year for deeming enrollment from a non-renewing cost plan to an affiliated MA plan. All crosswalks must be completed by the time the bid is due, unless a plan qualifies to submit a crosswalk during the exceptions window. Plans are responsible for following all contracting, enrollment, and other transition guidance released by CMS. In its initial, December 7, 2015 guidance, CMS specified that transitioning plans must notify CMS by January 31 of the year preceding the last cost contract year. In its May 17, 2017 guidance, CMS revised this date to permit the notice to be provided using the crosswalk process, as specified above.
Cost Plan Policy Index Pt.1 (Zip, 676 KB) (ZIP)
Cost Plan Policy Index Pt.2 (Zip, 15 KB (ZIP)
Effective Date of Cost Plan Enrollment - New Policy Option - Revised (pdf, 141 KB) (PDF)
Effective Date of Cost Plan Enrollment - New Policy Option (pdf, 132 KB) (PDF)
Issuance of Noncoverage Notices by Cost Plans for Inpatient Hospital Discharges (pdf, 107 KB) (PDF)