CMS-10142_Attachment_E-1_CY2024_MA_ BPT Instructions

OMB Approved # 0938-0944 (Expires: 08/31/2025)

INSTRUCTIONS FOR COMPLETING
THE MEDICARE ADVANTAGE
BID PRICING TOOLS
FOR CONTRACT YEAR 2024

Draft as of December, 2022

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CMS-10142

TABLE OF CONTENTS
Table of Contents ............................................................................................................................................... 2
I. Introduction..................................................................................................................................................... 5
Definitions ................................................................................................................................................... 5
Background ................................................................................................................................................. 5
Document Overview ................................................................................................................................... 6
Bidding Resources....................................................................................................................................... 6
II. Pricing Considerations................................................................................................................................... 7
Bidding/Pricing Approach........................................................................................................................... 7
Specific Topics ............................................................................................................................................ 7
Affordable Care Act .......................................................................................................................................8
Bad Debt ........................................................................................................................................................8
Base Period Experience .................................................................................................................................8
Benefits and Service Categories .................................................................................................................. 12
Capitated Arrangements for Medical Services............................................................................................. 14
Coordination of Benefits (COB)/Subrogation ............................................................................................. 15
Cost Sharing ................................................................................................................................................. 15
Credibility .................................................................................................................................................... 17
Dual-Eligible Beneficiaries .......................................................................................................................... 19
Employer/Union Groups .............................................................................................................................. 23
End-Stage Renal Disease (ESRD) ............................................................................................................... 23
Enrollment ................................................................................................................................................... 24
Gain/Loss Margin ........................................................................................................................................ 25
Hospice Enrollees ........................................................................................................................................ 26
Manual Rating.............................................................................................................................................. 27
Medicare Secondary Payer (MSP) Adjustment ........................................................................................... 27
Non-Benefit Expenses ................................................................................................................................. 30
Optional Supplemental Benefits .................................................................................................................. 31
Out-of-Area Enrollees .................................................................................................................................. 32
Part B Premium and Buydown..................................................................................................................... 32
Plan Premiums, Rebate Reallocation, and Premium Rounding ................................................................... 32
Plan Intention for Target Part D Basic Premium ......................................................................................... 33
Point-of-Service (POS) ................................................................................................................................ 34
Rebate Allocations ....................................................................................................................................... 34
Regional Preferred Provider Organizations (PPOs) ..................................................................................... 35
Related-Party Arrangements ........................................................................................................................ 35
Risk Score Development for CY2024.......................................................................................................... 35
Sequestration ................................................................................................................................................ 37
Service Area ................................................................................................................................................. 38
Supporting Documentation .......................................................................................................................... 38

III. Data Entry and Formulas ........................................................................................................................... 39
Medicare Advantage ................................................................................................................................. 39
Medical Savings Account.......................................................................................................................... 39
ESRD-SNP ................................................................................................................................................ 39
Data Entry ................................................................................................................................................. 39
MA Worksheet 1 – MA Base Period Experience and Projection Assumptions ............................................... 40
Section I – General Information ................................................................................................................ 40
Section II – Base Period Background Information.................................................................................... 43
Section III – Base Period Data (at Plan’s Risk Factor) for 1/1/2022 – 12/31/2022 .................................. 44
Section IV – Projection Assumptions ....................................................................................................... 45
Section V – Base Period Summary for 1/1/2022 – 12/31/2022 (excludes Optional Supplemental) ......... 47

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MA Worksheet 2 – MA Projected Allowed Costs PMPM .............................................................................. 51
Section I – General Information ................................................................................................................ 51
Section II – Projected Allowed Costs........................................................................................................ 51
MA Worksheet 3 – MA Projected Cost Sharing PMPM ................................................................................. 54
Section I – General Information ................................................................................................................ 54
Section II – Maximum Cost Sharing Per Member Per Year ..................................................................... 54
Section III – Development of Contract Year Cost Sharing PMPM (Plan’s Risk Factor) ......................... 56
Section IV – Mapping of PBP Service Categories to BPT........................................................................ 62
MA Worksheet 4 – MA Projected Revenue Requirement PMPM................................................................... 63
Section I – General Information ................................................................................................................ 63
Section II – Development of Projected Revenue Requirement ................................................................. 63
Section III – Development of Projected Contract Year ESRD “Subsidy” ................................................ 70
Section IV – Projected Medicaid Data ...................................................................................................... 70
MA Worksheet 5 – MA Benchmark PMPM .................................................................................................... 71
Section I – General Information ................................................................................................................ 71
Section II – Benchmark and Bid Development ......................................................................................... 71
Section III – Savings/Basic Member Premium Development ................................................................... 72
Section IV – Standardized A/B Benchmark – Regional PPO Plans Only ................................................. 73
Section V – Quality Rating ....................................................................................................................... 73
Section VI – County-Level Detail and Service Area Summary ................................................................ 74
Section VII – Other Medicare Information ............................................................................................... 76
Section VIII – Projected CY Member Months .......................................................................................... 77
MA Worksheet 6 – MA Bid Summary ............................................................................................................ 78
Section I – General Information ................................................................................................................ 78
Section II – Other Information .................................................................................................................. 78
Section III – Plan A/B Bid Summary ........................................................................................................ 78
Section IV – Contact Information and Date Prepared ............................................................................... 83
Section V – Working Model Text Box...................................................................................................... 83
MA Worksheet 7 – Optional Supplemental Benefits ....................................................................................... 84
Section I – General Information ................................................................................................................ 84
Section II – Optional Supplemental Packages........................................................................................... 84
Section III – Base Period Summary (entered at the contract level) ........................................................... 85
IV. Appendices................................................................................................................................................. 86
Appendix A – Actuarial Certification .............................................................................................................. 86
Appendix B – Supporting Documentation ....................................................................................................... 88
General ...................................................................................................................................................... 88
Submitting Supporting Documentation ..................................................................................................... 89
Sample Supporting Documentation......................................................................................................... 102
Appendix C – Part B-Only Enrollees ............................................................................................................. 107
Appendix D – Medicare Advantage Plans Available to employer/Union Groups ......................................... 108
Individual-market plans (“Mixed Enrollment” Plans)............................................................................. 108
Appendix E – Rebate Reallocation and Premium Rounding ......................................................................... 109
I. Rebate Reallocation Permissibility by Plan Type ................................................................................ 109
II. Rebate Reallocation Rules and Examples .......................................................................................... 110
III. Additional Rebate Reallocation Guidance ........................................................................................ 121
IV. Rules for Rounding Premiums .......................................................................................................... 124
V. Summary of Considerations for Rebate Reallocation Resubmissions................................................ 127

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Appendix F – Suggested Mapping of MA PBP Categories to BPT Categories ............................................. 128
Appendix G – DE# Summary ........................................................................................................................ 131
Appendix H – Medical Savings Account BPT............................................................................................... 134
Worksheet 1 – MSA Base Period Experience and Projection Assumptions (Corresponding to MA
Worksheet 1) .................................................................................................................................... 134
Worksheet 2 – MSA Total Projected Allowed Costs PMPM (Corresponding to MA Worksheet 2)...... 134
Worksheet 3 – MSA Benchmark PMPM (Corresponding to MA Worksheet 5) .................................... 135
Worksheet 4 – MSA Enrollee Deposit and Plan Payment (No corresponding MA Worksheet) ............ 135
Worksheet 5 – MSA Optional Supplemental Benefits (Corresponding to MA Worksheet 7) ................ 136
Appendix I – End–Stage Renal Disease–Only Special Needs Plans BPT ..................................................... 137
Worksheet 1 – Enrollment and PMPM Revenue Projection ................................................................... 137
Worksheet 2 – Projection of benefit cost, non-benefit expenses, and gain/loss margin PMPM ............. 139
Worksheet 3 – Program Experience for Calendar Year 2022 ................................................................. 141
Worksheet 4 – Optional Supplemental Benefits ..................................................................................... 141
Supporting Documentation for ESRD-SNP BPTs .................................................................................. 141
Appendix J – Trending Risk Scores ............................................................................................................... 142
Appendix K – Data Aggregation Examples ................................................................................................... 143

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INTRODUCTION

I. INTRODUCTION
DEFINITIONS
In these Instructions, the term “bid” refers to the Bid Pricing Tool (BPT) and/or the Medicare
Advantage (MA) Plan Benefit Package (PBP) required for a contract number-plan IDsegment ID of an MA-only plan or the MA portion of an MA-PD plan.
In the BPT and these Instructions,—
•
•
•

The term “DE#” (d-e-pound) refers to dual-eligible beneficiaries without full Medicare
cost-sharing liability. Included are dual-eligible beneficiaries who receive benefits in
the form of reduced, as well as eliminated, Medicare cost sharing.
The term “non-DE#” refers to dual-eligible beneficiaries with full Medicare
cost-sharing liability and beneficiaries who are not eligible for Medicaid (that is,
non-dual-eligible beneficiaries).
The terms “total population” and “total beneficiaries” refer to the combined non-DE#
and DE# population and beneficiaries, respectively, including out-of-area members.

BACKGROUND
Medicare Advantage Organizations (MAOs) must submit a separate bid to the Centers for
Medicare & Medicaid Services (CMS) for each non-segmented plan or each segment of a
segmented plan that they intend to offer under the MA program, including MA plans, Medical
Savings Account (MSA) plans and End-Stage Renal Disease-Only Special Needs Plans
(ESRD-SNPs).
Note that an MAO may offer private fee-for service (PFFS) and Religious Fraternal Benefit
PFFS plans without Part D coverage. However, if an MAO offers, in a given service area, at
least one benefit plan of any other plan type, at least one benefit plan in that service area must
include Part D coverage.
MAOs must submit the information via the CMS Health Plan Management System (HPMS) in
the CMS-approved electronic format—the MA BPT, the MSA BPT, or the ESRD-SNP BPT.
The MA BPT is not to be completed for Section 1876 cost plans, Section 1833 cost plans,
Program of All-Inclusive Care for the Elderly (PACE) plans, and Medicare-Medicaid
Plans (MMPs) offered through a Financial Alignment Initiative.
Each bid submission must include an actuarial certification and supporting documentation as
described in Appendix A and Appendix B, respectively.
The submitted bids will be subject to review and audit by CMS or by any person or
organization that CMS designates. As part of the review and audit process, CMS or its
representative may request additional documentation supporting the information contained in
the BPT. Organizations must be prepared to provide this information in a timely manner.
These bid instructions provide details on the bid submission elements required by
42 CFR 422.254

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INTRODUCTION

DOCUMENT OVERVIEW
This document contains general pricing considerations and detailed instructions for completing
the BPT. Following are the contents of each section:
•
•
•
•

Section I, “Introduction”: contains a list of key changes from the CY2023 BPT and
provides sources of information that can be accessed for assistance during the bid
submission process.
Section II, “Pricing Considerations”: contains guidance for preparing bids and
presenting pricing results in the BPT.
Section III, “Data Entry and Formulas”: contains directions for completing the seven
worksheets in the MA BPT and explains the formulas for calculated cells.
Section IV, Appendices A through K: contain requirements for and information on
Actuarial Certification, Supporting Documentation, Part B-Only Enrollees,
MA Products Available to Groups, Rebate Reallocation and Premium Rounding,
Suggested Mapping of MA PBP Categories to BPT Categories, DE#, the MSA BPT, the
ESRD-SNP BPT, Trending Risk Scores, and Data Aggregation Examples.

BIDDING RESOURCES
The following resources provide information on CY2024 bidding:
•
•
•
•
•

•

•

The CY2024 Advance Notices and Announcement are available at
https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/
Announcements-and-Documents.html.
The Actuarial Bid Training is available at https://www.cms.gov/medicare/medicareadvantage-rates-statistics/actuarial-bid-training.
Medicare fee-for-service (FFS) trends can be found at https://www.cms.gov/Medicare/
Health-Plans/MedicareAdvtgSpecRateStats/FFS-Trends.html.
For questions about the BPT, email the CMS Office of the Actuary (OACT) at
actuarial-bids@cms.hhs.gov.
OACT will host weekly technical user group calls regarding actuarial aspects of the
CY2024 bidding process. The conference calls will include live Question and Answer
sessions with CMS actuaries. For call-in information, see the OACT memorandum with
the subject line “Actuarial User Group Calls” released via HPMS.
For technical questions about the BPT, BPT Batch Tools, HPMS, or the upload process,
refer to the following resources:
◦ The BPT Technical Instructions, located in HPMS, under HPMS Home > Plan Bids
> Bid Submission > CY2023 > Documentation > BPT Technical Instructions
◦ The Bid Submission User’s Manual, also available in HPMS, under HPMS Home >
Plan Bids > Bid Submission > CY2024 > Documentation > Bid User’s Manual
◦ HPMS Help Desk: 1-800-220-2028 or hpms@cms.hhs.gov
For information about benefits, see:
◦ The Medicare Managed Care Manual and the Medicare Prescription Drug Benefit
Manual located at https://www.cms.gov/Regulations-and-Guidance/Guidance/
Manuals/Internet-Only-Manuals-IOMs.html.
◦ Other Part C benefits information provided by CMS.

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PRICING CONSIDERATIONS

II. PRICING CONSIDERATIONS
BIDDING/PRICING APPROACH
By statute, the bid must represent the revenue requirement of the expected population.
Therefore, the revenue requirement in the MA BPT must reflect the costs for providing MA
services; it must not include the cost for non-MA services (such as Part D).
Further, in most circumstances, the Medicare Advantage Organization (MAO) must use
credible bid-specific experience in the development of projected allowed costs. This approach
does not preclude the MAO from reaching specific benefit and premium goals; the gain/loss
margin guidance allows sufficient flexibility to achieve pricing targets provided that the overall
gain/loss margin meets the requirements in the guidance and that anti-competitive practices are
not used.
It is important to note the distinction between reporting base period experience data in
Worksheet 1 and projecting credible data for pricing. Subject to the “Base Period” pricing
consideration, base period experience must be reported at the bid level if the bid existed in
CY2022, regardless of the level of enrollment. This experience must also be projected in
Worksheet 2 and assigned an appropriate level of credibility by the certifying actuary. Data
may be aggregated for determining manual rates to blend with partially credible projected
experience rates or to account for significant changes in enrollment from the base period to the
contract year.

SPECIFIC TOPICS
Topic
Affordable Care Act
Bad Debt
Base Period Experience
Benefits and Service Categories
Capitated Arrangements for
Medical Services
Coordination of Benefits (COB)/
Subrogation

Page Topic
Medicare Secondary Payer (MSP)
8
Adjustment
8
Non-Benefit Expenses
8
Optional Supplemental Benefits
12
Out-of-Area Enrollees

Page

14

32

15

Cost Sharing

15

Credibility
Dual-Eligible Beneficiaries

17
19

Employer/Union Groups

23

End-Stage Renal Disease (ESRD)
Enrollment
Gain/Loss Margin
Hospice Enrollees
Manual Rating

23
24
25
26
27

CY2024 MA BPT Instructions

27
30
31
32

Part B Premium and Buydown
Plan Premiums, Rebate Reallocation, and
Premium Rounding
Plan Intention for Target Part D Basic
Premium
Point-of-Service (POS)
Rebate Allocations
Regional Preferred Provider Organizations
(RPPOs)
Related-Party Arrangements
Risk Score Development for CY2024
Sequestration
Service Area Changes
Supporting Documentation

32
33
34
34
35
35
35
37
38
38

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PRICING CONSIDERATIONS

Affordable Care Act

The Affordable Care Act (ACA) introduced quality bonus payments (QBPs) to MAOs based on
a five-star quality rating system. Further, QBP rating rules classify certain contracts as Low
enrollment contracts, New contracts under existing parent org, or New contracts under new
parent org.
The user must enter the contract-level quality bonus rating and a corresponding new or low
plan indicator for the CY2024 QBP on Worksheet 5, Section 5, as described below. These data
can be found in HPMS, under HPMS Home > Quality and Performance – Performance Metrics
> Costs > MA QBP Rating > 2024.
•
•

If the quality bonus rating on HPMS is blank, then the quality bonus rating in line 1
must be left blank. Otherwise, the user must enter the quality bonus rating from HPMS
as the quality bonus rating.
If the new or low plan indicator on HPMS is blank, then the user must enter
“Not applicable” as the new or low plan indicator in line 2. Otherwise, the user must
enter the new or low plan indicator from HPMS as the new or low plan indicator.

The ACA also changed the share of savings that MAOs must provide to enrollees as the
beneficiary rebate, whereby the level of rebate is tied to the level of the QBP rating for the
contract number. The table below outlines the QBP percentage and rebate percentage for
various quality bonus ratings (that is, QBP star ratings) in CY2024.
QBP star
rating
4.5+
4.0
3.5
3.0
< 3.0
Blank

CY2024
QBP Percentage
5.0%
5.0%
0.0%
0.0%
0.0%
3.5%

CY2024
Rebate Percentage
70%
65%
65%
50%
50%
65%

For additional information regarding the ACA provisions and the QBP, see the CY2024
Advance Notices, the CY2024 Announcement, and the November 13, 2018 memorandum
released via HPMS titled “2021 Quality Bonus Payment Determinations and Administrative
Review Process for Quality Bonus Payments and Rebate Retention Allowances.”
Bad Debt

Bad debt for uncollected enrollee cost sharing for inpatient hospital and skilled nursing facility
care is to be included in medical costs when paid for by the MAO in limited situations, such as
when PFFS plans have chosen to match this aspect of Medicare FFS payment rules or when it
is necessary for a plan to maintain access to a sole provider of a service.
Base Period Experience

The experience data must be based on a calendar year 2021 incurred period with at least
30 days of paid claim run-out; 2–3 months of paid claim run-out is preferable. Further, the
enrollment data for the MA bid in a Medicare Advantage Prescription Drug (MA-PD) plan
must reflect an underlying population that is the same as that for the corresponding Part D bid.

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PRICING CONSIDERATIONS

Worksheet 1 must be completed with data at the bid level for a number of CY2021 contract
number-plan ID-segment ID(s) as required in the “Base Period” section of this pricing
consideration, regardless of the level of enrollment. Further, each contract number-plan IDsegment ID must be identified in Section II, line 5. Note that such data exclude Section 1876
cost plan data. The experience data on Worksheet 1—
•
•

•
•
•

Must reconcile in an auditable manner to the MAO’s audited financial statements.
Must be reported without adjustment in Section III except as noted in the “Capitated
Arrangements for Medical Services” pricing consideration. Adjustments may be made
in Section IV to accommodate population, benefit design, or other changes from the
base period to the contract period.
Must be provided for plans acquired by the MAO.
May not be used to aggregate data from a number of bids in order to achieve credibility.
May be reported on more than one bid, depending upon how enrollment changes are
processed.

The medical expenses in Section III must—
•
•
•
•

•

•
•
•

Reflect the current best estimate of incurred claims on an experience basis, including
estimates of unpaid claims, but excluding any provision for adverse deviation.
Be reported on an allowable basis (before any reduction for reinsurance recoveries or
cost sharing) and on a net basis.
Include any provider incentive payments.
Reflect the full level of plan cost sharing in the PBP for all enrollees including the
DE# beneficiaries. See the “Dual-Eligible Beneficiaries” pricing consideration for more
information about DE# beneficiaries. Include claim experience for out-of-area
enrollees.
Include or exclude claim experience for hospice enrollees for the time period that an
enrollee is in hospice status consistent with the development of projected allowed costs.
See the “Hospice Enrollees” pricing consideration for more information about reporting
base period experience.
Exclude end-stage renal disease (ESRD) claim experience for the time period that an
enrollee is in ESRD status based on CMS eligibility records.
Exclude claims experience for optional supplemental benefits.
Exclude incurred claims for Medicaid benefits.

Section V must include experience for all enrollees (that is, it must include ESRD and hospice
and out-of-area and all other enrollees). Section V excludes optional supplemental benefits.
Section V must be completed in total dollars (not PMPM amounts). Section V must not include
amounts that are entered in Worksheet 1 of the Part D BPT. (For example, do not include MA
rebates applied to Part D premiums.)
Data Aggregation

The requirements for reporting MA base period data due to crosswalks and enrollment
shifts are described in Rule 1 through Rule 4 at the end of this section. These rules
apply to cross-walk and enrollment shifts between segments and depend on the factors
described below. Note that MA data exclude data for Section 1876 cost plans.

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PRICING CONSIDERATIONS

•

•

•

How enrollment changes are processed.
◦ In these Instructions, the term “formal crosswalk” refers to the crosswalk
process submitted in HPMS for non-segmented plan consolidations (that is,
consolidated renewals), whereby members are automatically moved from
one bid to another. Without an HPMS crosswalk in place, members are
dis-enrolled from the terminating plan and must actively select to enroll in a
new plan of their choosing.
◦ Medicare Advantage and Prescription Drug (MARx) enrollment transactions
are used to automatically move members from one bid to another, or to other
bids—for example, when the service area of one or more segments is
redefined. Note that in some cases, an approved crosswalk is required, such
as when the service area of one or more non-segmented plans is redefined. In
this situation, without an approved crosswalk in place, members in the
affected counties must actively select to enroll in a bid of their choosing.
Whether or not members who are crosswalked or moved to a bid via MARx
transactions are dis-enrolled from that bid the following year via MARx
transactions—a situation in which Rule 4 – Two-Year Perspective applies. (Note
that the dis-enrollment of members from a bid, in itself, is not a factor; a disenrollment must be preceded by a crosswalk for the previous year.)
Whether or not enrollment changes that are processed via MARx enrollment
transactions apply to a significant proportion of members in the bid from which
the members are moving— a situation in which Rule 2 – Enrollment Shifts
applies.

The threshold (that is, the level of significance) for determining the significance of the
proportion of members in a contract number-plan ID-segment ID that are crosswalked
into existing or new plans via MARx enrollment transactions must be the same for each
of the MAO’s MA bids that an actuary certifies.
For more information about crosswalks, see the May 15, 2019 memorandum released
via HPMS titled “Process for Requesting an HPMS Crosswalk Exception for Contract
Year (CY) 2020.”
✓ Rule 1 – Crosswalks and transitions from D-SNP look-alikes under
42 CFR 422.514(e)

Base period data for one or more MA CY2021 contract number-plan ID-segment ID
must be reported on Worksheet 1 of the bid into which the members are
crosswalked only in the following circumstances:
•

•

When two or more plans are consolidated and the members are crosswalked into
an existing or new plan under a formal crosswalk but are not dis-enrolled via
MARx transactions the following year. If members are crosswalked one year
and dis-enrolled the following year, then Rule 4 applies.
When the proportion of members in a bid that are crosswalked into existing or
new plans via MARx enrollment transactions, subject to Rule 4, is greater than
or equal to the MA level of significance determined by the certifying actuary.

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PRICING CONSIDERATIONS

Rule 1 applies when members are crosswalked within the same contract and when
members are crosswalked between contracts in accord with the limited exceptions
described in CMS annual renewal and non-renewal guidance.
✓ Rule 2 – Enrollment Shifts

Base period data for one or more MA CY2021 contract number-plan ID-segment ID
cannot be reported on Worksheet 1 of the bid into which the members are moved or
crosswalked to in the following circumstances:
•
•
•

When an existing member chooses to enroll in a different plan.
When the proportion of members in a bid that are crosswalked into existing or
new plans via MARx enrollment transactions, subject to Rule 4, is less than the
MA level of significance determined by the certifying actuary.
When enrollment changes do not involve a crosswalk whether or not a bid is
terminated.

✓ Rule 3 – Partial Experience

Report base period experience in total at the bid level for every MA CY2021
contract number-plan ID-segment ID; do not include partial plan experience on
Worksheet 1.
✓ Rule 4 – Two-Year Perspective

For BPT reporting purposes, the actuary must consider the crosswalks from the base
period to the contract period (that is, two years of crosswalks, from CY2022 to
CY2023 and then from CY2023 to CY2024) taking into account MARx
dis-enrollment transactions, as explained below. That is, Rule 4 applies only if
members are: (i) crosswalked both years or (ii) crosswalked one year and
dis-enrolled the following year.
•

•

For a BPT—that is, “Bid Y”—the MAO must report base period experience of
another bid—that is, “Bid X”—on Worksheet 1 of the Bid Y CY2024 BPT if the
proportion of Bid X members who are crosswalked or moved into Bid Y and
who remain in Bid Y for CY2024, is greater than or equal to the level of
significance determined by the certifying actuary.
The calculation of the aforementioned proportion includes the following types of
crosswalks and MARx enrollment and dis-enrollment transactions occurring
over the course of the two year period:
◦ A plan consolidation for CY2023 or a proposed consolidation for CY2024
that moves Bid X members to Bid Y under a formal crosswalk.
◦ A service area expansion (SAE) for CY2023 or a proposed SAE for the
CY2024 that crosswalks or moves Bid X members to Bid Y via MARx
enrollment transactions.
◦ A proposed service area reduction (SAR) for CY2024. However, the
calculation pertains only to prior Bid X members (that is, Bid X members
who were moved to Bid Y for CY2023) who will be dis-enrolled from
Plan Y via MARx transactions due to the service area reduction

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PRICING CONSIDERATIONS

•

A separate calculation is required for each Bid X from which members are
crosswalked into Bid Y.

Benefits and Service Categories

Benefits are defined in regulations, Chapter 4 of the Medicare Managed Care Manual
(MMCM), and other CMS instructions (for example, HPMS memoranda) as Medicare-covered,
mandatory supplemental, or optional supplemental benefits.
Benefits must be priced in the BPT as benefit expenses, not non-benefit expenses. For example,
dental services, a fitness benefit, and other supplemental benefits must all be priced as benefit
expenses.
The BPT must exclude the cost of value-added items and services.
The user must generally enter input items related to medical expenses separately for each
service category displayed in the BPT. Note that the “Part B Rx” service category includes
prescription drug rebates that serve to decrease the MAO’s cost of providing Part B Rx
benefits. The total amount of the Part B Rx rebate is to be included here. If the pharmacy
benefit manager (PBM) retains a portion of the manufacturers’ rebate to cover administrative
costs, the total rebate including the amount retained by the PBM must be reported as a decrease
in medical cost. The retained amount must also be shown to increase non-benefit expenses
(NBE).
See Appendix F for a suggested mapping of BPT and PBP service categories.
For more information on benefits and service categories, see—
•
•

Chapter 4, “Benefits and Beneficiary Protections,” of the Medicare Managed Care
Manual located at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/
Internet-Only-Manuals-IOMs-Items/CMS019326.html.
Other Part C benefits information provided by CMS.
Disease Management

Disease management (DM) expenses are to be treated as medical expenses, non-benefit
expenses, or both, depending upon the nature of the expense. For DM services furnished
in a clinical setting by approved providers, costs are to be treated as medical expenses.
The cost of durable medical equipment (DME) associated with DM activities is
typically classified as a medical expense.
For care management services provided under a SNP model of care—for example,
services provided by an interdisciplinary care team as mandated by the Medicare
Improvements for Patients and Providers Act (MIPPA) and addressed in a HPMS
memorandum dated September 15, 2008—costs are treated as medical expenses. Should
the team provide additional services, any added costs may be classified by the certifying
actuary as medical expenses or as non-benefit expenses.
Absent additional CMS guidance, other DM and care coordination costs —such as
those incurred during recruitment, enrollment, and general program communications—
are to be classified as non-benefit, or administrative expenses. In all cases, the
classification of DM expenses in the BPT must be explained in the supporting
documentation for projected allowed costs and non-benefit expenses.
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Medicare-Covered and Non-Covered

Following are the three types of service categories:
•
•
•

Services that can be only Medicare-covered.
Services that can be only non-covered (for example, transportation benefits in
line 1, “Transportation (Non-Covered)”).
Medicare-covered services that may be supplemented, as an A/B mandatory
supplemental benefit (for example, the cost for additional days not covered by
Medicare in line a, “Inpatient Facility”).

For the third type, values are allocated between Medicare-covered benefits and
A/B mandatory supplemental benefits in Worksheet 4 as specified by the user. This
allocation must be consistent with the benefit type classification in the PBP. For
example—
•
•
•
•

A skilled nursing facility (SNF) waiver of a qualifying 3-day inpatient hospital
stay and the associated SNF stay are Medicare-covered benefits.
For HMOPOS plans, out-of-network point-of-service inpatient stays are A/B
mandatory supplemental benefits.
Physical exams that provide services not included in the required Annual
Wellness Visits are A/B mandatory supplemental benefits.
For SNPs, assessments of enrollees are considered Medicare-covered benefits as
explained in the CY2013 Call Letter.

To maintain consistency with the PBP, the cost to provide Medicaid benefits must be
entered in Worksheet 4 Section IV since these benefits are not entered in the PBP.
Inpatient Facility Additional Days

CMS developed a 1.2-percent factor based on FFS data that the certifying actuary may
use as a “safe harbor” for the proportion of the costs of inpatient facility days that are
non-covered. If the non-covered inpatient facility pricing is based on an assumption
other than the safe harbor, support for the data and methodology used in the
development of that assumption is required.
Further, the certifying actuary may use the inpatient facility “safe harbor” as a basis for
determining the inpatient facility cost-sharing Medicare-covered percentages entered on
Worksheet 4.
Non-Covered Limited Benefits

For non-covered limited benefits with no cost sharing, the value of benefits over the
limit must be excluded from projected allowed costs. For example, if the PBP contains a
hearing aid benefit with a $500 annual cost limit and no cost sharing, and the average
cost of a hearing aid is $2,500, then the allowed “per-member-per-month” (PMPM)
amount must be based on the $500 maximum benefit. The user must not enter a $2,500
cost offset by a cost-sharing entry in Worksheet 3 for the $2,000 paid by the
beneficiary.

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Capitated Arrangements for Medical Services

This section applies to medical costs provided under all types of capitation arrangements,
including global capitation and risk-sharing arrangements.
The BPT must reflect base period data, projection factors, and cost sharing for medical
services, as explained below.
✓ Annual Utilization Per 1,000

Utilization rates entered on Worksheet 1 must be based on claims or encounter data for
the bid. However, if encounter data are not available for a certain service, supporting
documentation must fully explain the extenuating circumstances and remedy for the
deficiency.
✓ Allowed PMPM

If the MAO purchased capitated services, then the allowed cost is the capitation paid for
medical services plus any related cost sharing plus an estimate of the outcome for any
risk sharing arrangements.
✓ Projection Assumptions

Each projection factor must reflect the combined impact from the base period to the
contract year of the change in allowed costs for non-capitated and capitated services.
•

The “Unit Cost Adjustment – Provider Payment Change” factors entered on
Worksheet 1 must include the impact of changes in all capitation arrangements aside
from those attributable to changes in utilization or benefits.

Global Capitation and Risk-Sharing Arrangements

This subsection contains additional requirements for costs associated with global
capitation and risk-sharing arrangements as described below.
•

•

It is not appropriate to provide risk protection for Part D through MA or
vice versa. Therefore, the MA BPT must not include the portion (determined
based on net allowed costs of services included in the global capitation or
risk-sharing contract) of global capitation or risk-sharing payments attributable
to Part D; rather, the Part D BPT must include this amount.
The BPT must reflect the benefit costs in the service categories included in
global capitation and risk-sharing contracts. If the certifying actuary projects a
payment adjustment for the base period or contract year, such adjustment must
be allocated to the service category based on net medical costs under the global
capitation or risk-sharing arrangement prior to the adjustment. Specifically, the
adjustment for a particular service category is based on the ratio of (i) net
medical costs in that service category, and (ii) total net medical costs of the
service categories included in the global capitation or risk-sharing contract.

The cost sharing PMPM in Worksheet 3, Section III, column i must be based on
benefits outlined in the PBP. Therefore, in order for the BPT to reflect the appropriate
projected allowed costs and net medical expenses, the effective coinsurance percentage
in column i may not match the coinsurance percentage in the PBP. See the

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“Cost Sharing” pricing consideration for more information about the calculation of the
effective coinsurance percentage.
Coordination of Benefits (COB)/Subrogation

The COB/Subrogation service category is intended to include only those amounts that are to be
settled outside the claim system. If an MAO pays claims for its estimated liability only (that is,
net of the amount that is the responsibility of another payer, such as an auto policy), the MAO’s
net liability amount (before cost-sharing reductions) must be entered on Worksheet 1,
Section III, lines a through q.
Cost Sharing

Any member premium(s) and Part D cost sharing must be excluded from MA Worksheet 3.
Coinsurance

The cost-sharing PMPM amount in Worksheet 3, Section III, column i must be based on
benefits outlined in the PBP. Therefore, in order for the BPT to reflect the appropriate
projected allowed costs and net medical expenses, the effective coinsurance percentage
in column i may not match the coinsurance percentage in the PBP. Examples include,
but are not limited to, the following: sequestration, unless the Medicare fee-for-service
(Medicare FFS) pricing option is used; global capitation; and risk sharing arrangements.
Example: The PBP contains in-network cost sharing of 20 percent. To reflect a

global capitation arrangement, $3 PMPM of projected allowed costs must be
removed from medical expense The following are BPT values before the global
capitation arrangement is taken into account:
(e)
Measurement
Unit Code
Coin

(g)
PMPM
25

(i)
Effective Coin
Before OOP Max
0.2000

(j)
Effective Coin
After OOP Max
0.1900

(k)
In-Network
PMPM
4.75

BPT values reflecting the global capitation arrangement are as follows:
(e)
Measurement
Unit Code
Coin

(g)
PMPM
22

(i)
Effective Coin
Before OOP Max
0.2273

(j)
Effective Coin
After OOP Max
0.2159

(k)
In-Network
PMPM
4.75

Consistency with PBP

The cost-sharing information entered in the BPT must tie to data in the PBP. Note that,
although there are not individual entries for each cost-sharing item listed in the PBP, the
value of all cost-sharing items must be reflected in the total PMPM amount in MA
Worksheet 3. The PBP line numbers in Section IV of MA Worksheet 3 must be mapped
to the BPT line numbers to identify all of the plan cost sharing.

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The cost-sharing descriptions in Worksheet 3 may be used by plan managers, marketing
staff, and plan actuaries to ensure that the benefits priced in the BPT are consistent with
those in the PBP, as part of the quality control process for bid submissions. These
descriptions will be deleted from the finalized BPT and therefore will not be uploaded
to HPMS for use by CMS or CMS reviewers.
Deductibles

In Worksheet 3, Section III, column f, “In-Network Effective Plan-Level Deductible
PMPM,” the BPT must reflect the in-network impact of the following deductibles, with
exception of the pricing option described in the “Medicare FFS Cost Sharing” section of
this pricing consideration:
•
•

A local preferred provider organization (PPO) or a regional PPO deductible that
applies to one or more in-network benefits.
A plan-level in-network or combined deductible contained in Section D of the
PBP.

Further, in Worksheet 3, Section III, columns g through k, “In-network Cost Sharing
After Plan-Level Deductible,” the BPT must reflect the impact of service-category
specific deductibles included in Section B of the PBP.
Medicare Fee-For-Service (Medicare FFS) Cost Sharing

The Medicare FFS cost-sharing pricing option allows the use of Medicare FFS actuarial
equivalent cost sharing in Worksheet 4 as the basis for pricing certain plan cost sharing
designed to match Medicare FFS cost sharing, as explained in this subsection.
Note that the adjustment to the coinsurance percentage due to sequestration described in
the “Coinsurance” subsection of this pricing consideration does not apply.
The Medicare FFS cost-sharing pricing option is available for all inpatient facility
services, and/or all SNF services, and/or all Medicare Part B services, as explained
below.
✓ Local and Regional PPO

For a local PPO or a regional PPO bid, the Medicare FFS cost sharing pricing option
is available only for all Medicare Part A and Part B services.
•

•

The deductible in the PBP must be—
◦ A “Medicare-Defined Part A and B Deductible amount combined as a single
deductible.”
◦ “Differentially applied to Part A and Part B Medicare services, reflecting
Original Medicare payment structure.”
All other cost sharing in the PBP for Medicare Part A and Part B services must
align with Medicare FFS cost sharing, subject to the applicable dollar limit
specified in Part C benefits information provided by CMS. Note that the “max
plan visit amount” for PBP category 4a, Emergency Room and 4b, Urgent Care
Services, must be the applicable dollar limit specified in Part C benefits
information provided by CMS.

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✓ Health Maintenance Organization (HMO), HMO with a Point-of-Service Option
(HMOPOS), and Non-Network PFFS

For an HMO, an HMOPOS, or a non-network PFFS bid, the Medicare FFS cost
sharing pricing option is available only for all inpatient facility services, and/or all
SNF services, and/or all Medicare Part B services. It is not available for full network
PFFS or partial network PFFS bids.
•
•
•

If this option is used for all inpatient facility services, then the service-specific
cost sharing for all inpatient facility services must be “Medicare-Defined Cost
Shares.”
If this option is used for all SNF services, then the service-specific cost sharing
for all SNF services must be “Medicare-Defined Cost Shares.”
If this option is used for all Part B services, then—
◦ The applicable in-network plan deductible (HMO), or combined plan
deductible (HMOPOS), or plan deductible (non-network PFFS) must be
“Medicare-Defined Part B Deductible amount.”
◦ The “max plan visit amount” for PBP category 4a, Emergency Room and 4b,
Urgent Care Services, must be the applicable dollar limit specified in Part C
benefits information provided by CMS.
◦ All other cost sharing in the PBP for Medicare Part B services must align
with Medicare FFS cost sharing, subject to the applicable dollar limit
specified in Part C benefits information provided by CMS.

BPT data entry requirements under the Medicare FFS cost-sharing pricing option are
described below.
✓ Worksheet 3 – Plan Cost Sharing

For the applicable service categories, the user must enter—
•
•

Zeroes (0) as the in-network cost of the plan deductible (column f).
The in-network portion of plan cost sharing as the in-network effective
copay/coinsurance after the plan deductible has been satisfied and before the
impact of the maximum out-of-pocket (MOOP) (column i).

Visitor/Travel Benefits

In-network cost sharing in Worksheet 3 includes mandatory supplemental benefits
offered under the Visitor/Travel Program (that is, Medicare-covered and non-covered
services obtained outside the bid’s service area).
Credibility

CMS does not permit adjustments to the credibility percentages on Worksheet 2 for the purpose
of modifying the manual rate. For example, do not adjust the credibility percentages in the BPT
as an equivalent alternative to removing the base period experience from the manual rate
development.
The following credibility guidance in this section is provided as a resource to certifying
actuaries, not as a requirement.

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Information on the development of the CMS guidelines for full credibility can be found on the
“Medicare Advantage Rates & Statistics” page of the CMS website at
https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Bid-Pricing-Toolsand-Instructions-Items/BidGuidance.html.
Claims Credibility

This section pertains to the credibility percentages on Worksheet 2 and to the ESRD
subsidy on Worksheet 4.
CMS has established MA credibility guidelines as summarized in the following table:
Exposure Required
for Full Credibility

CMS Formula for Partial Credibility

Non-ESRD
Allowed Costs

24,000 member
months

member months
√
24,000

ESRD
Allowed Costs

4,000 member
months

member months
√
4,000

Subject Experience

Risk Score Credibility

This section pertains to the credibility of risk scores based on the CMS preferred
methodology. CMS has not developed credibility guidelines for risk scores based on
alternate approaches or for CMS-HCC ESRD risk scores.
CMS has established MA credibility guidelines as summarized in the following table:
Subject Experience
Estimated Part C risk scores
for development of 2024 bids
as posted on HPMS
Beneficiary-level file to
support 2024 Part C bids as
distributed by CMS

Exposure Required
for Full Credibility
300 beneficiaries

3,600 member
months

CMS Formula for
Partial Credibility
√

number of beneficiaries
300
√

member months
3,600

Overriding the CMS Formulas for Partial Credibility

The following guideline is applicable only to the CMS claims and risk score credibility
formulas presented above; such guideline may not be suitable for any alternative
credibility formula. If the CMS formula for partial credibility is applied and the
resulting credibility is—
•
•

Less than or equal to 20 percent, then the actuary may override the computed
credibility with 0-percent credibility.
Greater than or equal to 90 percent, then the actuary may override the computed
credibility with 100-percent credibility.

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Information on why it is inappropriate to use blended risk scores to adjust manual claims
experience can be found on the “Medicare Advantage Rates & Statistics” page of the CMS
website at https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/
Downloads/CredibilityDemo2016.zip
Dual-Eligible Beneficiaries

Dual-eligible beneficiaries are individuals who are eligible for both Medicare and Medicaid
benefits under Titles XVIII and XIX of the Social Security Act, respectively. There are several
categories of dual-eligible beneficiaries, such as qualified Medicare beneficiaries (QMBs), with
different benefits based on income and other qualifying circumstances. Some dual-eligible
beneficiaries receive benefits in the form of reduced or eliminated Medicare cost sharing.
The BPT reflects the difference in cost-sharing liability for certain dual-eligible beneficiaries in
the development of total medical costs.
Medicaid Revenue and Costs

In Worksheet 4, Section IV, if the MAO has a separate contract with a state or territory
for Medicaid services, then enter projected Medicaid revenue and cost for members of
the MA bid.
•

•
•
•

The projected Medicaid cost—
◦ Includes the cost for the Medicaid benefits that the MAO has contracted to
provide bid members under the state or territory Medicaid program.
◦ Reflects the full cost, which includes benefit expenses and non-benefit
expenses.
◦ May include prescription drug benefits that the Commonwealth of
Puerto Rico requires to be offered, beyond what is submitted in the Part D
bid, in order to participate in the Platino Program.
The projected Medicaid revenue is the corresponding revenue received from the
state Medicaid program to provide the Medicaid benefits.
The values must be on a PMPM basis.
Worksheet 1 collects the Medicaid revenue and costs (in total dollars) in the
base period (Section V, lines 10a, 10b1, and 10b2). These items are defined in
the same manner as for the projection period.

For more information on Medicaid benefits, see Chapter 4 of the Medicare Managed
Care Manual at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/
Internet-Only-Manuals-IOMs-Items/CMS019326.html.
Determination of DE# Beneficiaries

Per federal statute, QMBs and QMBs with full Medicaid benefits (QMB Plus) are not
liable for Medicare cost sharing; therefore, these individuals are always considered to
be DE# beneficiaries, as defined in the “Introduction” of these Instructions.
The certifying actuary must determine which additional beneficiaries are DE# based on
the Medicaid cost-sharing policy for the states or territories in the bid’s service area.
However, the certifying actuary has the option to approximate the DE# population as
described below, if the condition in the second bullet point is satisfied.

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•

•

The first step is to consider the bid-specific enrollment data available in HPMS,
under the “Risk Adjustment” link as well as the 2021 membership data posted in
HPMS for the contract plan-ID segment(s) listed in Worksheet 1 for the base
period.
If the percentage of total dual-eligible beneficiaries (who comprise all
dual-eligible categories and not just the QMB and QMB Plus categories) is less
than 10 percent of total beneficiaries, then the certifying actuary may consider
the membership in the QMB and QMB Plus categories to represent the entire
DE# population.

Bid Values

The BPT must reflect data and costs for the DE# and non-DE# populations separately,
as explained in this section and summarized in Appendix G. Note that the distinct data
and costs for both the DE# and non-DE# populations must reflect the impact of
out-of-area members.
✓ Worksheet 1 – Base Period Data

Enter distinct base period member months and risk scores separately for the total
and non-DE# populations regardless of the size of the actual and projected DE#
populations. The BPT calculates base period member months and risk scores for the
DE# population based on the user-entered values for the total and non-DE#
populations. The DE# risk score default calculation may be overwritten by the user,
for example, to take into account payments as well as member months.
All other data on Worksheet 1 are to be entered for the total population.
See the “Medicaid Revenue and Costs” subsection of this pricing consideration for
information about entering Medicaid data in Worksheet 1.
✓ Worksheet 2 – Projected Allowed Costs (Blended Rates)

The BPT calculates blended allowed costs for the total population (column o) based
on the projected experience rate and manual rate. The CMS credibility guideline
applies to total (DE# plus non-DE#) member months.
Enter projected allowed costs for both the non-DE# and DE# populations
(columns p and q) as follows:
•
•
•

Enter projected allowed costs for the non-DE# beneficiaries in column p and
projected allowed costs for the DE# beneficiaries in column q.
If DE# projected member months are between 10 percent and 90 percent
inclusive of the total projected member months, then enter distinct DE# and
non-DE# projected allowed costs (columns p and q).
If DE# projected member months are less than 10 percent or greater than
90 percent of the total projected member months, then the user may, at the
discretion of the certifying actuary, enter—
◦ Non-DE# projected allowed costs (column p) equal to the projected allowed
costs for the total population (column o); and

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◦
•

•

DE# projected allowed costs (column q) equal to the projected allowed costs
for the total population (column o).
If the projected member months for the DE# population or for the non-DE#
population are equal to zero, then enter projected allowed costs for the non-DE#
beneficiaries (column p) and for the DE# beneficiaries (column q) equal to the
projected allowed costs for the total population (column o). Do not enter zero for
these costs.
Complete Worksheet 2, column p on a “per non-DE# member per month” basis,
and complete column q on a “per DE# member per month” basis.

✓ Worksheet 3 – Cost Sharing

Enter cost-sharing information in Worksheet 3 based on benefits outlined in the
PBP, which will be paid by the non-DE# beneficiaries. Worksheet 3 is not meant to
reflect the limited cost sharing for the DE# beneficiaries, except in cases in which
the DE# enrollees constitute less than 10 percent or more than 90 percent of the total
bid enrollees. Completion of Worksheet 3 must be consistent with how the non-DE#
and DE# Allowed PMPM columns on Worksheet 2 are completed and follow the
guidance specified in Appendix G.
✓ Worksheet 4 – Projected Required Revenue

Total medical expenses are calculated separately for non-DE#s, DE#s, and all
beneficiaries in subsections A, B, and C, respectively.
•
•

•

In subsection A (non-DE#s), net medical expenses for Medicare-covered
benefits (column o) are calculated based on FFS actuarially equivalent
cost-sharing proportions (column k).
In subsection B (DE#s), comparable medical expenses are calculated for DE#
beneficiaries, taking into account the reduced or eliminated cost-sharing liability
of dual-eligible beneficiaries, including the state or territory Medicaid cost
sharing (column k). Specifically, the Medicare-covered net PMPM reflects—
◦ The amount that the MAO pays the provider for Medicare-covered services;
plus
◦ The actual cost sharing for Medicare-covered services; less
◦ The state or territory Medicaid cost sharing for Medicare-covered services.
In subsection C (all beneficiaries), the BPT weights the non-DE# and DE# costs
by their respective projected member months (from Worksheet 5) to calculate
costs for all beneficiaries. The user must enter total non-benefit expenses and the
gain/loss margin for all beneficiaries.

Considerations for developing data for DE# beneficiaries in subsection B include
the following:
•
•

All values must be calculated on a “per DE# member per month” basis.
In column f, plan cost sharing reflects the cost sharing that would be paid if the
beneficiary actually paid the plan cost sharing in the PBP.
◦ This amount is calculated automatically based on DE# allowed costs in
Worksheet 2 and the ratio of non-DE# plan cost sharing to allowed costs in
subsection A.

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◦
•

•
•

However, the default formulas may be overwritten at the discretion of the
certifying actuary.
Also in column f, plan cost sharing must reflect the following:
◦ If projected DE# member months are greater than zero, and non-DE# cost
sharing (Worksheet 4 Section IIA column f) are greater than zero, then DE#
cost sharing (Worksheet 4 Section IIB column f) must be greater than zero.
◦ If projected DE# member months equal total member months (that is,
100 percent DE# plan), then DE# cost sharing (Worksheet 4 Section IIB
column f) must equal the cost sharing entered on Worksheet 3.
In column h, Plan Reimbursement, enter the amount the MAO pays the
providers.
In column k, the “Medicaid Cost Sharing” reflects the cost sharing that the
beneficiary is liable to pay.
◦ The “Medicaid Cost Sharing” includes the following:
▪ Cost-sharing amounts required by state or territory Medicaid programs
based on the eligibility rules for subsidized cost sharing for DE#
beneficiaries in the bid’s service area.
▪ Plan cost sharing for non-Medicare and non-Medicaid covered benefits.
◦ The user must—
▪ Calculate the “Medicaid Cost Sharing” as a weighted average of the
PMPM cost sharing for all DE# members.
▪ Enter data in all cases. The cells must not be left blank.
◦ If (i) DE# projected member months are less than 10 percent of total
projected member months, and (ii) the projected allowed costs in
Worksheet 2 for the total, DE#, and non-DE# populations are all equal, then
the user may, at the discretion of the certifying actuary, enter—
▪ A zero amount; or
▪ The state or territory Medicaid required level of beneficiary cost sharing,
if any.

See the “Medicaid Revenue and Costs” subsection of this pricing consideration for
information about entering Medicaid data on Worksheet 4.
✓ Worksheet 5 – Benchmark

The user must enter—
•
•
•

Distinct projected member months and projected risk factor for the non-DE#
population, (including out-of-area members) in Section II (lines 1 and 4).
Projected member months and projected risk factors for out-of-area members
(DE# plus non-DE#) in Section VI (line 38, columns e and f).
County-specific projected member months and projected risk factors for the total
(DE# plus non-DE#) population, excluding out-of-area members, in Section VI
(columns e and f) beginning in line 39.

In Section II, the BPT displays the total member months and membership/paymentweighted average risk factor for the total population based on the county-level
information (including out-of-area). Values for the DE# population are calculated
automatically from the values for the total and the non-DE# populations. The DE#

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risk score default calculation may be overwritten by the user, for example, to take
into account payments as well as member months.
Considerations for developing projected member months include the following:
•
•

The user must not round projected non-DE# member months to 0 percent or
100 percent, even if non-DE# projected member months are less than
10 percent, or greater than 90 percent, of total projected member months.
CMS expects non-zero DE# projected member months when there are DE#
members in the base period. The DE# projected member months may equal zero
(that is, the user may enter non-DE# projected member months equal to the
member months for the total population) only if—
◦ All of the existing DE# members terminated and the probability of enrolling
DE# members equals zero; and
◦ The certifying actuary adequately explains why the DE# projected
membership equals zero; and
◦ The user enters non-DE# projected member months and risk score equal to
the corresponding values for the total population.

Non-DE# and DE# projected risk scores are determined as follows:
•
•

If the projected allowed costs in Worksheet 2 for the total, DE#, and non-DE#
populations are not all equal, the user must enter a distinct non-DE# projected
risk factor.
If the projected allowed costs in Worksheet 2 for the total, DE#, and non-DE#
populations are all equal, the user must enter a projected risk factor for the
non-DE# population equal to the projected risk factor for the total population.

Employer/Union Groups

An MAO may offer its individual-market MA plans to employer/union group health plan
sponsors and modify benefits for each group, as outlined in Appendix D.
For CY2024, CMS does not require an MA BPT for employer-only or union-only group waiver
plans (EGWPs).
End-Stage Renal Disease (ESRD)

This subsection applies to the MA BPT. See Appendix I for ESRD-SNPs.
All information provided on Worksheets 1 through 7 must exclude the experience for enrollees
in ESRD status, for the time period that enrollees are in that status based on CMS eligibility
records, with the exception of Worksheet 1, Section V; Worksheet 4, Section III; and
Worksheet 5, Section VIII.
ESRD Subsidy

The benchmarks calculated in the MA BPT exclude enrollees in ESRD status, as does
the projection of bid expenditures. However, all individuals enrolled in the bid,
including those in ESRD status, are required to pay the same MA premium and are
offered the same benefit package. In order to account for the projected marginal costs
(or savings) of bid enrollees in ESRD status, the BPT allows for an adjustment that is

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allocated across ESRD and non-ESRD bid members (including out-of-area members).
The adjustment is split into two sections, basic benefits and supplemental benefits,
although the entire subsidy is added to A/B mandatory supplemental benefits.
✓ Basic Benefits

The inputs in the Medicare-covered section are (i) projected CMS capitation
revenue, (ii) projected net medical expenses, and (iii) projected non-benefit
expenses. The projected gain/loss margin requirement is calculated based on the
values for the non-ESRD bid. All fields in this section are to reflect Medicare levels
of cost sharing (for example, 20 percent cost sharing for Part B services once the
deductible has been met) and must be reported on a “per ESRD member per month”
basis.
If the organization does not have fully credible ESRD experience, it may blend the
experience with manual rates (as is done on Worksheet 2 for non-ESRD enrollees).
The BPT will automatically calculate the bid’s costs for basic benefits of ESRD
enrollees and will allocate these costs across ESRD and non-ESRD members.
✓ Supplemental Benefits

The inputs in this section are (i) the projected cost-sharing reduction PMPM for
ESRD enrollees, and (ii) the projected PMPM cost of additional benefits for ESRD
enrollees. Entries must be reported on a “per ESRD member per month” basis.
The BPT will calculate the incremental cost of supplemental benefits for ESRD
enrollees, including a proportionate share of non-benefit expenses and gain/loss
margin, and allocate such costs across ESRD and non-ESRD bid members.
If a zero incremental cost of Mandatory Supplemental (MS) is intended, then the
user may either—
•
•

Leave the MS input fields blank; or
Set these costs equal to the projected cost-sharing reduction PMPM and cost of
additional benefits PMPM for non-ESRD enrollees.

Enrollment

The projected enrollment for the MA bid in an MA-PD plan must be consistent with that for the
corresponding Part D bid and must reflect the same underlying population. Therefore, if the
projected enrollment in a particular county equals zero, the user is to enter for the county code
zero (0) projected member months and not another number such as one (1) or a fraction
between zero and one. There is no requirement to enter member months greater than zero in
order to generate a county-level payment rate.
If a member is assigned to more than one status at the same time, the priority for assigning
status for bid development is (1) hospice, (2) ESRD, (3) out-of-area, and (4) all other statuses.
The “Hospice Enrollees” and “Out-of-Area Enrollees” pricing considerations explain which
BPT entries must include the impact of out-of-area and hospice members.

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Gain/Loss Margin

Gain/loss margin refers to the additional revenue requirement beyond benefit expenses and
non-benefit expenses.
By statute, the bid must represent the revenue requirement of the expected population;
therefore, the gain/loss margin requirements must be met with the gain/loss margin entered in
the BPT.
Do not combine gain/loss margin for the MA and Part D components of MA-PD bids to satisfy
these Instructions.
Do not combine gain/loss margins for bids in segmented plans to satisfy these Instructions.
The gain/loss margin entered in the BPT must be determined in connection with other CMS
instructions such as Total Beneficiary Cost (TBC). If there is a conflict between satisfying
gain/loss margin requirements and other CMS instructions, flexibility will be given to the
gain/loss margin requirements only to the extent necessary to meet the other CMS instructions.
Such conflicts with the gain/loss margin requirements must be disclosed, fully explained, and
supported. An exception must be approved by CMS.
Gain/loss margin requirements apply at two levels—the bid level and an aggregate level—and
both sets of requirements must be met in the initial bid submission and upon bid resubmission
or withdrawal.
Definitions

In the BPT and in these Instructions, the term—
•

“Aggregate MA gain/loss margin” refers to the projected enrollment-weighted
average BPT PMPM gain/loss margin for all MA BPTs, including general
enrollment plans; SNPs; MSA plans; and ESRD-SNPs.

Bid-Level Requirements

The gain/loss margin entered in the BPT is allocated to Medicare-covered services and
A/B mandatory supplemental benefits based on the distribution of total medical
expenses between these benefits (excluding the impact of the ESRD subsidy).
There is flexibility in setting the gain/loss margin at the bid level provided that—
•
•
•

The bid offers benefit value in relation to the gain/loss margin level;
Anti-competitive practices are not used; and
All aggregate-level gain/loss margin requirements described below are met.

✓ Benefit Value

The bid must provide benefit value in relation to the gain/loss margin level.
For a bid with a high gain/loss margin, consideration must be given to—
•
•

All possible benefits that the expected population can utilize, including rebates
applied to the Part B premium buydown; and
Benefit and premium changes that can be made in CY2024 to reduce gain/loss
margin.

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✓ Anti-Competitive Practices

Anti-competitive practices will not be accepted. For example, significantly low or
negative gain/loss margins for bids that have substantial enrollment and stable
experience, or “bait and switch” approaches to specific bid margin buildup, will be
rejected, absent sufficient support that such pricing is consistent with these
Instructions.
Aggregate-Level Requirements
✓ Year-to-Year Consistency

Although actual gain/loss margin may vary from year to year, CMS expects
certifying actuaries to price bids such that actual aggregate MA gain/loss margin as
a percentage of revenue over the long term is consistent with the gain/loss margin
assumptions used for pricing.
✓ Requirements for MA Plans

For MA plans, the aggregate MA gain/loss margin must be calculated at the parent
organization level as a percentage of revenue and must be disclosed. If such margin
is less than 0 percent or greater than 5.5 percent, then this condition must be fully
explained and supported and must be approved by CMS for CY2024.
MA-PD Gain/Loss Margin Requirements

See the “Instructions for Completing the Prescription Drug Plan Bid Pricing Tool for
Contract Year 2024” for gain/loss margin requirements that affect MA-PD bids.
Exclusions

The BPT must exclude non-insurance revenues pertaining to investments; fee-based
activities designed to influence state or federal legislation, such as the cost of lobbying
activities; the costs of value-added items and services (VAIS); and capital and
infrastructure costs and investments directly incurred or paid by the MA plan relating to
additional telehealth benefits.
See the announcement about lobbying activities released via an HPMS memorandum
dated October 16, 2009, and see Chapter 4 of the Medicare Managed Care Manual for
more information about VAIS.
Hospice Enrollees

The supporting experience and projection of MA Medicare-covered bid excludes beneficiaries
in hospice status as of the first day of the month. Accordingly, the following data must exclude
enrollees for the time period that they are in hospice status:
•
•
•

Base period member months and base period risk scores in Worksheet 1, Sections II,
and
Projected member months in Worksheet 5, Sections II and VI, and
Projected risk scores in Worksheet 5.

However, base period data in Worksheet 1, Section V must include hospice data.

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Since hospice enrollees continue to receive supplemental benefits from the MA plan, the
projected allowed cost PMPM may reflect claim costs for these enrollees for supplemental
benefits, at the discretion of the certifying actuary—for example, for a dental or another
additional benefit. If the projected allowed costs for mandatory supplemental benefits include
claims costs for hospice enrollees, then the mandatory supplemental medical expenses in
Worksheet 1, Section III must include claims for hospice enrollees for the time period that they
are in that status.
The “Monthly Membership Report” (MMR) data include hospice status.
Manual Rating
Manual Rating with FFS Data

Special considerations, and corresponding documentation, are required when using
Medicare FFS data as a manual rating source. Many of the available FFS data are not
directly applicable and/or detailed enough to be used as the sole source for projection of
medical expenses. For example, it is inappropriate to tabulate claims data using
Medicare Public Use Files (PUFs) without making adjustments to account for the
corresponding demographic, health, and geographic profiles of the claimants and to
account for the non-claimants. Similarly, since the FFS data published in the BPT
and/or the MA rate book development files are not split by benefit type, another
appropriate source must be used to allocate the data to all of the BPT service categories.
Further, as is the case with all manual rating sources, adjustments must be made to
account for claim expenses that are not reflected in the FFS data, such as claim run-out,
inclusion of expenses excluded from the data, and adjustments for medical education
expenses.
FFS Costs Used for the Actuarial Equivalent Cost-Sharing Factors

Please note that the FFS costs used for the actuarial equivalent cost sharing do not
include home health care costs since there is no cost sharing for home health services in
Medicare FFS. Experience for ESRD enrollees is excluded, as are the costs for hospice
services, since MA enrollees do not receive Medicare-covered hospice services through
the MA bid. However, hospice enrollees have not been excluded in calculating the
PMPM FFS costs used to weight original Medicare FFS cost sharing on Worksheet 5.
Further details on the development of the cost-sharing factors, such as the handling of
Indirect Medical Education (IME), Graduate Medical Education (GME), and other
costs, can be found under Medicare > Medicare Advantage Rates & Statistics >
Ratebooks & Supporting Data at https://www.cms.gov/Medicare/Health-Plans/
MedicareAdvtgSpecRateStats/Ratebooks-and-Supporting-Data.html.
Medicare Secondary Payer (MSP) Adjustment

The bid reflects lower claim amounts for enrollees whose primary coverage is not Medicare—
that is, enrollees with Medicare Secondary Payer (MSP) status of aged/disabled MSP or
ESRD MSP—and MAOs receive reduced payments for such enrollees. Accordingly, the BPT
uses the MSP adjustment, in conjunction with the projected risk score and the standardized
A/B benchmark, to produce a plan A/B benchmark consistent with the plan A/B bid; therefore,
the projected MSP adjustment represents the average payment reduction for the expected bid

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population due to MSP enrollees (with the limited exception described below in the Manually
Rated Bids subsection). Although CMS reduces payments for MSP status at the beneficiary
level, the BPT applies the MSP adjustment at the bid level. The projected MSP adjustment
must be bid specific.
The user may enter a 0-percent Medicare Secondary Payer (MSP) adjustment in the BPT only
if—
•
•

The certifying actuary expects no MSP enrollees in the contract year, or
The requirements described below in the Manually Rated Bids subsection are met.

MSP data provided by CMS serve as the basis for projecting the MSP adjustment. Included are
data described in the MAPD Plan Communications User Guide (PCUG), which can be found at
https://www.cms.gov/Research-Statistics-Data-and-Systems/CMS-Information-technology/
mapdhelpdesk/Plan_Communications_User_Guide.html.
The method to calculate the MSP adjustment is based on payment dollars as described below.
•

MSP adjustment = 1 – X/Y, where
X = Bid portion of payment reflecting reduced payments for MSP beneficiaries,
excluding MA rebates and basic MA premium, if any, as shown in the example
below; and
Y = Bid portion of payment that would be paid if no beneficiaries had a payer that
was primary to Medicare. This value is determined by (i) grossing up the payments
for MSP beneficiaries to the amount that would be paid if they did not have a payer
that was primary to Medicare and (ii) adding these payments to the payments for
non-MSP beneficiaries. The resulting value of Y explicitly takes into account the
distinct risk characteristics of MSP beneficiaries as compared to non-MSP
beneficiaries.

Note that the MSP adjustment must reflect changes from the source data payment year to the
contract year that affect the relative payment dollars for MSP and non-MSP beneficiaries.
Examples include, but are not limited to, a change in the MSP factor or a change in the distinct
risk characteristics of MSP beneficiaries as compared to non-MSP beneficiaries.
Example:

The source data to project the CY2024 MSP adjustment for Hxxxx-001-000 is
March 2023 MMR data for Hxxxx-001-000. There is no change in the distinct risk
characteristics of MSP beneficiaries as compared to non-MSP beneficiaries from
CY2023 to CY2024. There is no Part C basic premium.
Step 1: Calculate the CY2023 bid portion of payment reflecting reduced payments for
MSP beneficiaries (X2023).
$12,000,000 = “Total MA Payment” for the bid from a 2023 MMR file. This field
includes all rebates except rebates for reduction of the Part B premium and the
Part D basic premium and excludes the Part C basic premium, if any.

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$2,337,525 = Sum of rebates for cost-sharing reduction, other mandatory
supplemental benefits, and Part D supplemental benefits for the bid. See the PCUG
for the applicable field names.
X2023 = $12,000,000 – $2,337,525 = $9,662,475.
Step 2: Separate the CY2023 bid portion of payment reflecting reduced payments for
MSP beneficiaries (X2023) into payments for non-MSP enrollees and MSP enrollees
based on MSP status.
$9,609,346 = CY2023 bid portion of payment for non-MSP enrollees.
$53,129 = CY2023 bid portion of payment for MSP enrollees.
X2023 = $9,662,475 = $9,609,346 + $53,129.
Step 3: Calculate the CY2024 bid portion of payment reflecting reduced payments for
MSP beneficiaries (X).
$9,609,346 = CY2023 bid portion of payment for non-MSP enrollees.
0.136 = CY2023 “MSP factor” for working aged and working disabled
(non-ESRD).
0.136 = CY2024 “MSP factor” for working aged and working disabled
(non-ESRD).
$53,129 = (0.136 ÷ 0.136) × $53,129 = CY2023 bid portion of payment for MSP
enrollees.
X = $9,662,475 = $9,609,346 + $53,129.
Step 4: Calculate the projected CY2024 bid portion of payment that would be paid if no
beneficiaries had a payer that was primary to Medicare (Y).
Y = $9,609,346+ ($53,129 ÷ .136) = $9,609,346 + $390,654 = $10,000,000.
Step 5: Calculate the projected CY2024 MSP adjustment to enter into the BPT.
MSP adjustment = 1 – $9,662,475 ÷ $10,000,000 = 0.0338 = 3.38%.
Manually Rated Bids

If the following conditions are met, the actuary does not need to estimate an explicit
MSP adjustment for 100 percent manually-rated bids and must enter zero (0) in the
MSP adjustment field in Worksheet 5:
•
•

The basis for both projected allowed costs and projected risk scores is FFS data
that are reduced for MSP.
The projected proportion of MSP members is the same as the proportion of MSP
enrollees in the FFS data.

Examples of FFS data located on the CMS website that are reduced for MSP include—
•
•

Rate Calculation Data zip files (for example, “Risk_Scores 20XX-20YY
Non-PACE.csv”).
Limited Data Sets (or “CMS 5% sample”).

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•

FFS Data zip files (for example, “FFS data 20XX”).

Non-Benefit Expenses

Non-benefit expenses consist of all the bid-specific administrative and other non-benefit costs
incurred in the operation of the MA bid. Therefore, any allocation of non-benefit expenses to
the MA bid (whether performed at the bid level or at a broader level) must take into
consideration the differences between the MA bid and other bids, as well as the impact on
non-benefit costs of the MA bid.
Non-benefit expenses also include the costs of programs that CMS requires to be included in
the bid as non-benefit expenses such as Rewards and Incentives (RI) programs. See Chapter 4
of the Medicare Managed Care Manual for more information about non-benefits expenses.
Worksheet 4 distributes the non-benefit expenses proportionately between Medicare-covered
services and A/B mandatory supplemental benefits (excluding the PMPM impact of the ESRD
subsidy). Within A/B mandatory supplemental benefits, non-benefit expenses are further
distributed between “Additional Services” and “Reduction of A/B Cost Sharing.”
The non-benefit expenses must be entered separately on the BPT for the following categories:
•

•

•

Sales & Marketing. Examples include, but are not limited to the cost of—
◦ Marketing materials.
◦ Rewards and incentives allowed under 42 CFR § 422.134.
◦ Commissions.
◦ Enrollment packages.
◦ Identification cards.
◦ Salaries of sales and marketing staff.
Direct Administration. Examples include, but are not limited to—
◦ Customer service.
◦ Billing and enrollment.
◦ Medical management.
◦ Claims administration.
◦ Part C National Medicare Education Campaign (NMEC) user fees. CMS collects
NMEC user fees based on a percentage of revenue; however, the BPT entry is a
PMPM equivalent value consistent with the calculation of other BPT values. MAOs
may use the CMS estimate, which is $0.24 PMPM on a national basis for CY2024,
or develop an alternative estimate that is consistently applied to all bids in the
contract—for example, the MAO’s historical amount relative to the CMS annual
national estimate.
◦ Uncollected enrollee premium.
◦ Certain disease management functions. See the “Benefits and Service Categories”
pricing consideration for more information about the classification of disease
management expenses.
◦ For Part B Rx: amounts retained by the PBM from rebates, network transition costs,
or other items defined as DIR had such items been attributable to a Part D
prescription drug.
Indirect Administration. Examples include, but are not limited to, functions that may be
considered “corporate services,” such as—
◦ The position of CEO.

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•

◦ Accounting operations.
◦ Actuarial services.
◦ Legal services.
◦ Human resources.
Net Cost of Private Reinsurance (that is, reinsurance premium less projected recoveries;
however, for quota share reinsurance, the net cost of private reinsurance must be
entered as $0).

All non-benefit expenses must be reported using appropriate, generally accepted accounting
principles (GAAP). For example, acquisition expenses and capital expenditures must be
deferred and amortized according to the relevant GAAP standards (to the extent that is
consistent with the organization’s standard accounting practices, if not subject to GAAP). Also,
acquisition expenses (sales and marketing) must be deferred and amortized in a manner
consistent with the revenue stream anticipated on behalf of the newly enrolled members.
Guidance on GAAP standards is promulgated by the Financial Accounting Standards Board
(FASB). Of particular applicability is FASB’s Statement of Financial Accounting No. 60,
Accounting and Reporting by Insurance Enterprises.
Costs not pertaining to administrative activities and other activities related to non-medical costs
incurred in the operation of the MA bid must be excluded from non-benefit expenses. Such
costs include income taxes; changes in statutory surplus and investment expenses; the cost of
lobbying activities; and value-added items and services.
See the “Gain/Loss Margin” pricing considerations for more information about exclusions from
the BPT.
Start-up costs that are not considered capital expenditures under GAAP are reported as follows:
•
•

Expenditures for tangible assets (for example, a new computer system) must be
capitalized and amortized according to relevant GAAP principles.
Expenditures for non-tangible assets (for example, salaries and benefits) must be
reported in a manner consistent with the organization’s internal accounting practices
and the reporting of similar expenditures in other lines of business.

Non-benefit expenses that are solely attributable to MA or Part D must be reported only on the
corresponding MA or Part D BPT.
Non-benefit expenses that are common to the MA and Part D components of MA-PD bids must
be allocated proportionately between the MA and Part D BPTs.
When Medicare benefits are funded by an outside source such as a state Medicaid program, the
non-benefit expenses must be allocated proportionately between Medicare and the other
revenue source.
Optional Supplemental Benefits

See the Announcement at https://www.cms.gov/medicarehealthplansmedicareadvtgspecratestatsannouncements-and-documents/2021-0. CMS considers plan
designs for optional supplemental benefits to be non-discriminatory and provides reasonable
value to enrollees when the total value of the optional supplemental benefits offered by all
plans under the contract meet the following thresholds:

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•
•

The enrollment-weighted contract-level projected gain/loss margin, as measured by a
percent of premium, cannot exceed 15 percent.
The sum of the enrollment-weighted contract-level projected gain/loss margin and
non-benefit expenses, as measured by a percent of premium, cannot exceed 30 percent
of revenue.

Out-of-Area Enrollees

The BPT must reflect the impact of out-of-areas members in the base period experience and in
the projected values for the contract year, including the calculation of the ESRD subsidy.
Enrollees are classified as out-of-area based on the classification used for MA payment.
The user must enter distinct projected member months and projected risk scores for out-of-area
members in Worksheet 5, Section VI, row 38.
The “Dual-Eligible” pricing consideration explains that out-of-area members are attributable to
the DE# and non-DE# populations in Worksheet 5, Section II.
Part B Premium and Buydown

MA enrollees are required to pay the Part B premium, but it may be reduced by the MAO
through the use of MA rebate dollars.
Note that the Part B premium amount charged by CMS is not the same for all Medicare
beneficiaries.
•

•
•

Section 1839 of the Social Security Act, as amended by section 811 of the Medicare
Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) and
section 5111 of the Deficit Reduction Act of 2005, provides for an income-related
reduction in the government subsidy of the Medicare Part B premium. Under this
provision, for those beneficiaries meeting specified income thresholds, a monthly
adjustment amount is added to the Part B premium. The addition of monthly adjustment
amounts to the Part B premium obligation of higher-income beneficiaries was phased in
over 3 years, beginning in 2007.
Certain beneficiaries’ premium increase is limited by the increase in their Social
Security checks (that is, the “hold harmless” provision).
Certain beneficiaries may pay a late-enrollment penalty.

The amount of rebate dollars that can be applied to the Part B premium is limited to the amount
pre-populated in the BPT by CMS at the time when the BPT is released.
The bid pricing tool and instructions are released annually in April, but the Part B premium is
not announced by CMS for the upcoming contract year until several months later. Therefore,
MAOs must use the CMS pre-populated amount in the BPT to determine the level of rebates to
allocate to the Part B premium buydown.
Plan Premiums, Rebate Reallocation, and Premium Rounding

The MA BPT calculates the bid’s premium for services under the Medicare Advantage
program. Estimated Part D premiums, calculated in the separate Part D BPT, are then entered in
the MA BPT in order to—

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•
•
•

Underscore the relationship of MA rebates and Part D premiums.
Recognize the integrated relationship of the MA and Part D programs, which are
viewed by the enrollee as a single product with a single premium.
Display the total estimated plan premium (sum of MA and Part D).

When the bid is initially submitted, the Part D basic premium entered in the MA BPT is an
estimated value. The actual premium will be calculated by CMS following CMS’ publication of
the Part D national average monthly bid amount, the Part D base beneficiary premium, the
Part D regional low-income premium subsidy amounts, and the MA regional PPO benchmarks
(typically in August). Therefore, for MA-PD plans, the premium shown on the MA BPT may
not be the final plan premium for CY2024.
For local MA-only plans, the premium shown on the MA BPT in the initial bid submission is
the final actual premium (not an estimate), since these plans are not affected by the Part D
national average monthly bid amount and MA regional PPO benchmark calculations. Local
MA-only plans do not have an opportunity to resubmit in August for rebate reallocations. The
initial bid submission must reflect the desired plan premium.
For regional PPO plans, the initial bid submission contains an estimated MA premium. The
actual MA premium will not be known until August, when the MA regional PPO benchmarks
are calculated by CMS. Note that after the regional PPO benchmarks are released by CMS, all
regional PPO sponsors are required to resubmit the MA BPTs in order to reflect the actual plan
bid component in Worksheet 5, and they may need to reallocate rebates accordingly.
MA-PD and regional MA-only sponsors have the opportunity to reallocate rebates after the
release of the Part D national average bid amount and MA regional PPO benchmarks.
Appendix E contains information about rebate reallocation and rounding rules, including the
following:
•
•
•
•
•
•
•

A description of the rebate reallocation period.
A summary of the circumstances under which rebate allocation is required, permitted,
or not permitted.
Specific rules for returning to the target Part D basic premium.
Limitations on benefit changes that are permitted during the rebate reallocation period.
Limitations on changes in pricing assumptions that are permitted during the rebate
reallocation period, including a small change in gain/loss margin in order to satisfy
Total Beneficiary Cost (TBC) evaluations.
Limitations on significant changes to the BPT when rounding premiums.
Examples of rebate allocation and rounding.

It is important to note that for all bids, the initial bid submission must reflect the desired level
of premium rounding, since there are specific rules regarding the level of premium rounding
permitted during the rebate reallocation period.
Plan Intention for Target Part D Basic Premium

Following CMS’ publication of the Part D national average monthly bid amount, the Part D
base beneficiary premium, the Part D regional low-income premium subsidy amounts, and the
MA regional PPO benchmarks, MAOs may reallocate MA rebate dollars in certain MA-PD
bids in order to return to the target Part D basic premium. MA-PD sponsors must choose one of

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the following two options for the target premium: “Premium Amount Displayed in Line 7d” or
“Low-Income Premium Subsidy Amount.” There is no option to target and reallocate rebates to
return to Total Plan Premium.
The target Part D basic premium is the Part D basic premium net of any MA rebate dollars that
were applied to reduce (buy down) the premium; it does not include the Part D supplemental
premium or the MA premium. Similarly, the Low-Income Premium Subsidy Amount (LIPSA)
applies to the Part D basic premium and does not cover the cost of Part D supplemental
benefits.
CMS expects a consistent estimate of the LIPSA among bids in the same region.
MA-PD sponsors must choose a plan intention for the target Part D basic premium option in the
initial bid submission and cannot change the chosen target in a subsequent resubmission. CMS
will consider only the option selected in the initial bid submission as the plan’s intention.
Point-of-Service (POS)

There is no separate service category for point-of-service (POS); therefore, POS base period
experience data and projected allowed costs must be included in the appropriate service
categories.
Section 422.105 of the Code of Federal Regulations and Chapter 4 of the Medicare Managed
Care Manual allow HMOs to offer a POS option as a mandatory or optional supplemental
benefit. Therefore, the projected allowed cost of all POS benefits must be allocated to
A/B mandatory supplemental benefits or entered in Worksheet 7 consistent with the PBP. The
Plan A/B Bid for Medicare-covered services may not include the cost of POS benefits.
Rebate Allocations

The following rules apply for rebate allocations in the initial bid submission:
•

•
•
•
•
•
•

The “Maximum Value” column of Worksheet 6, Section IIIB shows the maximum
amount that may be applied for each rebate option. Each rebate allocation cannot
exceed the applicable maximum. Note that if the maximum value is negative (such as a
negative Part D basic premium before rebates), then the rebate allocation must be zero.
The total rebates allocated must equal the total rebates available. MAOs are not
permitted to under- or over-allocate rebates in total.
No rebate allocations may be negative.
Rebate allocations for “Reduce A/B Cost Sharing” and “Other A/B Mandatory
Supplemental Benefits” are rounded by the BPT to two decimals.
Rebate allocations for the Part B premium, the Part D basic premium, and the Part D
supplemental premium are rounded by the BPT to one decimal (that is, the nearest
dime) due to withhold system requirements.
MA-only bids cannot allocate rebates to Part D.
Rebates allocated to buy down the Part B premium are subject to the maximum amount
shown on Worksheet 6 when the BPT is released by CMS. See the “Part B Premium
and Buydown” pricing consideration and the instructions for Worksheet 6, Section II
for further information about rebates applied to the Part B premium.

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Regional Preferred Provider Organizations (PPOs)

A regional PPO plan must cover only enrollees eligible for both Part A and Part B of Medicare.
See Chapter 1 of the MMCM, which can be found at https://www.cms.gov/Regulations-andGuidance/Guidance/Manuals/Internet-Only-Manuals-IOMs-Items/CMS019326.html.
Intra-Service Area Rate (ISAR) Factors

In the event that the variation in the MA rates is not an accurate reflection of the
variation in a plan’s projected costs in its service area, CMS will consider allowing
MAOs, on a case-by-case basis, to request that payment rates for regional PPOs be
developed using plan-provided geographic intra-service area rate (ISAR) factors. See
the instructions for Worksheet 5 for more details on ISAR factors.
Related-Party Arrangements

Medical costs and non-benefit expenses for related parties must be reported in the BPT in a
manner consistent with the contractual arrangement with the related party for both the base
period and projection period.
The related-party requirements apply to any MAO entering into any type of arrangement with,
or receiving services from, an entity that has a different tax identification number than that of
the MAO but is associated with the MAO by any form of common, privately held ownership,
control, or investment, including any arrangement in which the MAO does business with a
related party through one or more unrelated parties.
The related-party pricing consideration does not apply to MAO’s arrangements with parties
within the MAO’s own tax identification number. When a MAO has an arrangement for benefit
services within their tax ID number, they may 1) submit data that matches the reporting of
these internal transactions in their financial statements, 2) establish the related party under a
new tax identification number and follow the related-party instructions, or 3) submit supporting
documentation, like that for the related-party support in Appendix B, that explains and
compares how these costs are reflected in the bid versus the MAO’s financial statements.
The objective of the requirements for related-party arrangements is to ensure that financial
arrangements between the MAO and related parties (i) are not significantly different from the
financial arrangements that would have been achieved in the absence of the relationship, and
(ii) do not provide the opportunity to over- or under- subsidize the bid.
CMS requires all MAOs to disclose whether or not they are in a business arrangement with a
related party. MAOs in such an arrangement must disclose and support each related-party
arrangement at the time of the initial bid submission and must prepare the bid and
documentation for each related party in accord with the requirements in this section and
Appendix B.
Risk Score Development for CY2024

The projected CY2024 risk score must—
•
•

Be based on the data sources and their respective weights, as specified in the resources
listed below in the Risk Adjustment Information Sources subsection.
Reflect the expected risk score trend at the bid level.

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•
•

Be appropriate for the expected population.
Include adjustments for CY2024 normalization and coding intensity.
Risk Score Calculation Approaches

There are two methods for calculating the projected risk score: the preferred approach
and the alternate approach.
•

•

The preferred approach is to start with either the beneficiary or plan-level data
files provided by CMS, which contain the calculated risk scores using the
CY2024 payment model on 12 months of 2022 membership or the July 2022
enrollees, respectively.
The alternate approach allows new plans or plans with significant population
changes to use a different starting point for estimating their contract year risk
score.

For both approaches, explicit adjustments for the following factors are required:
•
•
•
•
•

Run-out of diagnosis data from all sources, including differences in the final
cut-off date for data submission.
Bid-specific coding trend.
Changes in bid population.
Impact of any improvements to operational and submission process for
diagnosis data sources.
Other appropriate factors.

For an alternate approach, MAOs must consider the following additional adjustments:
•
•

•

•

•

Conversion to risk model-specific unblended risk scores.
◦ If the starting risk scores are blended scores, then MAOs must produce
unblended risk scores before the conversion to raw scores.
Conversion to a raw risk score.
◦ When starting from a data source with normalized risk scores, such as the
MMR, MAOs must consider a conversion to a raw (un-normalized) score
before making other adjustments.
- Conversion to a raw score includes subtraction of the frailty score, if
applicable, and then multiplicative adjustments for normalization and
coding intensity.
Impact of lagged versus non-lagged diagnosis data.
◦ If the starting risk scores are based on lagged diagnosis data, as is the case
for initial risk scores, MAOs must transition the scores from lagged to
non-lagged risk scores.
Seasonality.
◦ If the starting risk score is based on membership other than the July cohort
or a full calendar-year cohort, then MAOs must make an adjustment for
enrollment seasonality.
Risk model change.
◦ This includes the use of a different model in the data source versus the
projection year and differences in the diagnoses included in each model.

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PRICING CONSIDERATIONS

•

Impact of changes to diagnosis data sources and weights between the time
period of the data source and the contract year. Examples of the use of this
factor include adjustments for—
◦ The transition of starting risk scores based on MMR data from incomplete to
final diagnosis data.
◦ An estimate of the impact of the final risk score reconciliation.

Once projected to the contract year, the risk scores must reflect the CY2024 MA
normalization factor(s), the MA coding pattern adjustment factor, and the frailty factor,
if applicable. Note that, if a raw (un-normalized) risk score associated with a different
model calibration year is being normalized, the CY2024 MA normalization factor(s) is
not the appropriate normalization factor.
Risk Adjustment Information Sources

The following resources provide information on the development of projected CY2024
risk scores:
•

•
•
•

The CY2024 Advance Notices and Announcement can be found through the
“Announcements & Documents” link on the “Medicare Advantage Rates &
Statistics” page of the CMS website at https://www.cms.gov/Medicare/HealthPlans/MedicareAdvtgSpecRateStats/Announcements-and-Documents.html.
Bid-level data and technical notes are available after the publication of the
CY2024 Announcement through the “Risk Adjustment” link on the HPMS
Home page.
Beneficiary-level files and technical notes are sent to MAOs electronically after
the publication of the CY2024 Announcement.
Additional information can be found—
◦ Under the “Risk Adjustment” and “Ratebooks & Supporting Data” links at
https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/
index.html.
◦ At https://www.csscoperations.com/, including slides from Risk Adjustment
User Group Calls.

Other Considerations

See the “Credibility” pricing consideration for more information about the projection of
risk scores.
See Appendix J for more information about trending MA risk scores.
Sequestration

To account for sequestration during the projection period, net medical expenses must reflect the
impact of sequestration on provider payments. Cost sharing is not reduced under sequestration;
therefore, for purposes of completing the BPT, net medical expenses are reduced, cost sharing
is unaffected, and total allowed costs are reduced to equal the sum of net medical expenses and
cost sharing. Similar modifications must be made to base period data to the extent that actual
provider payments are affected by sequestration.

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PRICING CONSIDERATIONS

Some calculations in the BPT may be affected by the modifications listed above and are to be
handled as follows:
•

•

In the case of coinsurance, the effective cost sharing entered in Worksheet 3 may not
match the cost-sharing percentage in the PBP. In this case, the MAO must adequately
justify such difference. See the “Cost Sharing” pricing consideration for more
information about the calculation of the effective coinsurance percentage.
In the case of the actuarial equivalent cost sharing test (failing “red circle” validations)
on Worksheet 4, the MAO must adequately demonstrate the requirement that the plan
cost sharing for Medicare-covered benefits entered in the PBP is not greater than FFS
cost sharing.

Service Area
Segmented Service Areas

For information on MA segmented service area options see the CY2019 Final Call
Letter (page 210) in the Announcement at https://www.cms.gov/Medicare/HealthPlans/MedicareAdvtgSpecRateStats/Announcements-and-Documents-Items/
2019Announcement.
For information on non-regional PPO bids with segmented service areas see the
uniformity of benefit requirements in Chapter 4 - Benefit and Beneficiary Protections of
the Medicare Managed Care Manual at https://www.cms.gov/Regulations-andGuidance/Guidance/Manuals/Internet-Only-Manuals-IOMs-Items/CMS019326.html.
Pending Service Area Changes

The initial bid submission must reflect pending service area expansions and changes.
The user must enter county-level data on Worksheet 5 for each county in the proposed
service area. If the pending request is later denied, then the MAO must resubmit a BPT
that includes only the approved counties. The revised bid values must reflect only the
change in the service area.
Supporting Documentation

In addition to the BPT and actuarial certification, organizations must submit supporting
documentation for every bid. See Appendix B for a description of the supporting
documentation requirements, including content, quality, and timing.

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DATA ENTRY AND FORMULAS

III. DATA ENTRY AND FORMULAS
This section includes line-by-line instructions for completing the Medicare Advantage (MA)
Bid Pricing Tool (BPT), the Medical Savings Account (MSA) BPT, and the End-Stage Renal
Disease-only special needs plans (ESRD-SNP) BPT. It also describes the formulas for
calculated cells.

MEDICARE ADVANTAGE
To complete the MA BPT, organizations must provide a series of data entries on the
appropriate form pages.
The MA BPT is organized as outlined below:
•
•
•
•
•
•
•

Worksheet 1 – MA Base Period Experience and Projection Assumptions
Worksheet 2 – MA Projected Allowed Costs PMPM
Worksheet 3 – MA Projected Cost Sharing PMPM
Worksheet 4 – MA Projected Revenue Requirement PMPM
Worksheet 5 – MA Benchmark PMPM
Worksheet 6 – MA Bid Summary
Worksheet 7 – Optional Supplemental Benefits

All worksheets must be completed, with the following exception: if the bid does not include
any optional supplemental benefit packages, then Worksheet 7 may be left blank.

MEDICAL SAVINGS ACCOUNT
Appendix H provides additional guidance in completing the MSA BPT for MSA plans, and
highlights the differences between the MSA BPT and the MA BPT.

ESRD-SNP
Appendix I provides additional guidance in completing the ESRD-SNP BPT for ESRD-SNPs,
and highlights the differences between the ESRD-SNP BPT and the MA BPT.

DATA ENTRY
Do not leave a field blank to indicate a zero amount. If zero is the intended value, then enter
zero (0) in the cell.
Do leave a field blank if—
•
•

The field does not apply, for example, Worksheet 1, Sections II and III, when no base
period experience is reported.
These Instructions state to leave a field blank, for example, the in-network and
out-of-network plan deductibles when the annual deductible for a local or regional
Preferred Provider Organization (PPO) functions as a combined deductible.

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WORKSHEET 1

MA WORKSHEET 1 – MA BASE PERIOD EXPERIENCE AND
PROJECTION ASSUMPTIONS
The purpose of Worksheet 1 is to capture bid-specific experience for the base period, regardless
of the level of enrollment and credibility, and to summarize the key assumptions used to project
allowed costs to the contract period.
•
•
•
•
•

Section I contains general bid information that will be displayed on all MA BPT
worksheets.
Section II captures base period background information.
Section III summarizes the base period data for the bid.
Section IV captures the factors used to project the base period data to the contract
period.
Section V contains a summary of the base period revenue and expenses.

Section I must be fully completed for all bids. (Note that some fields may be pre-populated by
the Plan Benefit Package (PBP) software.) Sections II through V must be completed for all bids
with experience data for 2022 regardless of the level of enrollment.

SECTION I – GENERAL INFORMATION
The fields of Section I have been formatted as the “General” format in Excel to support the link
functionality to other spreadsheets. Therefore, certain numeric fields, such as Plan ID, Segment
ID, and Region Number, must be entered as text—that is, using a preceding apostrophe—and
must include any leading zeroes. All fields in Section I must be completed; none can be left
blank.
Line 1 – Contract Number

Enter the contract number for the bid. The designation begins with a capital letter H (local plan)
or R (regional PPO plan) and includes four Arabic numerals (for example, H9999, R9999). Be
sure to include all leading zeroes (for example, H0001).
Line 2 – Plan ID

Plan IDs contain three Arabic numerals; however, this field is to be entered as a text input (that
is, with a preceding apostrophe). Be sure to include all leading zeroes (for example, ‘001).
Line 3 – Segment ID

If the bid is in a non-segmented plan, enter zero (0). Otherwise, enter the segment ID. This field
is to be entered as a text input (that is, with a preceding apostrophe). Be sure to include all
leading zeroes (for example, ‘000 or ‘001).
Line 4 – Contract Year

This cell is pre-populated with the calendar year to which the contract applies.
Line 5 – Organization Name

Enter the MAO’s legal entity name. This information also appears in HPMS and the PBP.

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WORKSHEET 1
Line 6 – Plan Name

Enter the plan name of the plan benefit package. This information also appears in HPMS and
the PBP.
Line 7 – Plan Type

Enter the type of MA plan. The valid options are listed in the table below.
Type of Plan
Local Coordinated Care Plans:
Health Maintenance Organization (HMO)
Religious Fraternal Benefit HMO
Religious Fraternal Benefit HMO with a Point-of-Service (POS) Option
HMO with a POS Option
Provider-Sponsored Organization (PSO) with a State License
Religious Fraternal Benefit with a State License
Preferred Provider Organization (PPO)
Religious Fraternal Benefit PPO
Regional Coordinated Care Plan:
Regional Preferred Provider Organization (RPPO)
Private Fee-for-Service Plans:
Private Fee-for-Service (PFFS)
Religious Fraternal Benefit PFFS

Plan Type Code
HMO
RFB HMO
RFB HMOPOS
HMOPOS
PSO State License
RFB PSO State License
LPPO
RFB LPPO
RPPO
PFFS
RFB PFFS

Line 8 – MA-PD

If the bid provides coverage under a Medicare Advantage Prescription Drug Plan (MA-PD), as
defined in Chapter 1 of the Medicare Managed Care Manual, enter “Y”. Otherwise, enter “N”.
Line 9 – Enrollee Type

If the bid covers enrollees eligible for both Part A and Part B of Medicare, enter “A/B”. If the
bid covers enrollees eligible for Part B only, enter “PART B ONLY”. (See Appendix C for
additional information regarding Part B-only plans.)
If the plan type equals “RPPO,” the enrollee type must equal “A/B.”
Line 10 – MA Region

If the MA plan is a regional PPO (that is, plan type equals “RPPO”), then input the region
number associated with the region that the plan will cover. This field must be entered as a text
input (that is, must include a preceding apostrophe) and must include any leading zeroes (for
example, ‘01).
For regional PPO plans, valid entries are shown in the following table:
Region
01
02

Description
Northern New England (New
Hampshire and Maine)
Central New England
(Connecticut, Massachusetts,
Rhode Island, and Vermont)

CY2024 MA BPT Instructions

Region
03
04
05

Description
New York
New Jersey
Mid-Atlantic (Delaware, District
of Columbia, and Maryland)

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WORKSHEET 1
Region
06
07
08
09
10
11
12
13
14
15
16
17
18

Description
Pennsylvania and West Virginia
North Carolina and Virginia
Georgia and South Carolina
Florida
Alabama and Tennessee
Michigan
Ohio
Indiana and Kentucky
Illinois and Wisconsin
Arkansas and Missouri
Louisiana and Mississippi
Texas
Kansas and Oklahoma

Region

19

20
21
22
23
24
25
26

Description
Upper Midwest and Northern
Plains (Iowa, Minnesota,
Montana, Nebraska, North
Dakota, South Dakota, and
Wyoming)
Colorado and New Mexico
Arizona
Nevada
Northwest (Idaho, Oregon, Utah,
and Washington)
California
Hawaii
Alaska

Line 11 – Actuarial Swapping or Actuarial Equivalence Apply

If an individual-market plan will use actuarial swapping or actuarial equivalence for employer
or union groups, enter “Y”. Otherwise, enter “N”. (See Appendix D for further information on
using actuarial swapping or equivalence.)
Line 12 – SNP

If the plan is a Special Needs Plan (SNP), enter “Y”. Otherwise, enter “N”.
Line 13 – Region Name

No user input is required. This field displays the region name, based on the region number
entered in line 10.
Line 14 – SNP Type

If the plan is a Special Needs Plan, enter the SNP type. Valid options are “Institutional,”
“Dual-Eligible,” or “Chronic or Disabling Condition.” This entry must match the SNP type in
the PBP.
Line 15 – VBID-C

If the PBP includes benefits offered under the Medicare Advantage Value-Based Insurance
Design (MA-VBID-C) model, enter “Y”. In all other cases, including PBP variations consistent
with CMS MA uniformity flexibility or Special Supplemental Benefits for the Chronically Ill
(SSBCI) criteria outside of the MA-VBID-C model, enter “N”.
VBID-C may be offered along with VBID-H or alone.
Line 16 – VBID-H

If the PBP includes benefits offered under the Medicare Advantage Value-Based Insurance
Design (MA-VBID-H) for the hospice model, enter “Y”. In all other cases, including PBP
variations consistent with CMS MA uniformity flexibility criteria outside of the MA-VBID-H
model, enter “N”.
VBID-H may be offered along with VBID-C or alone.
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WORKSHEET 1

SECTION II – BASE PERIOD BACKGROUND INFORMATION
Line 1 – Time Period Definition

CMS requires base experience data to be based on claims incurred in calendar year 2022 and at
least 30 days of paid claims run-out; 2–3 months of paid claim run-out is preferable.
The incurred dates in the first two cells are pre-populated with 01/01/2022 and 12/31/2022.
In the third cell enter the date that indicates the number of days of paid run-out. For example, if
there are two months of paid claims run-out in the detailed claims data by service category,
then the paid-through date is 02/28/2023. Note that such date would not change, if claims data
paid on a subsequent date were used to revise estimated incurred claims, but were not used to
update the detailed claims data set by service category.
Line 2 – Member Months

This line is calculated as the sum of the member months entered in line 5. The total member
months in line 2 represent the base period experience excluding ESRD enrollees for the time
period that enrollees are in ESRD status based on CMS eligibility records and excluding
hospice enrollees for the time period that the enrollees are in hospice status.
Enter the subset of member months that represents the non-DE# enrollees. The DE# subset will
be calculated as the difference between the total and the non-DE# amounts entered.
Line 3 – Risk Score

Enter the final average risk score for the non-ESRD and non-hospice members of the
population represented in the base period data using the Part C risk adjustment model that was
used for payment year 2022. This risk score must incorporate the normalization factor, the MA
coding pattern adjustment factor, and an estimate of the final reconciliation.
Actuaries may use as a starting point risk scores calculated with the model used for 2022,
which are included in the beneficiary-level files sent to MAOs electronically after the
publication of the CY2024 Announcement.
Also enter the risk score for the non-DE# subset. The DE# subset will be calculated based on
the total and non-DE# amounts entered. The DE# risk score default calculation may be
overwritten by the user. See the “Dual-Eligible Beneficiaries” pricing consideration for more
information about base period risk scores.
If DE# members equals zero, then the non-DE# risk score must equal the total risk score.
Line 4 – Completion Factor

Enter the multiplicative factor used to adjust the paid data to an incurred basis. The base period
data must represent the best estimate of incurred claims for the time period, including any
unpaid claims as of the paid-through date. The factor entered must be the amount to adjust only
the portion of paid claims that requires completion (that is, omit capitations from the
calculation of this factor).

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WORKSHEET 1

For example, assume the following:
Incurred Date
Paid-Through Date (PTD)
Capitation Payments
PTD Claims Requiring Completion
Estimate of Unpaid 2022 Claims as of 2/28/2023
Total Incurred Claims for 2022
The Completion Factor would be calculated as:
Completion Factor = (400 + 30) ÷ 400 = 1.075

1/1/2022 – 12/31/2022
2/28/2023
$ 100
$ 400
$ 30
$ 530

Line 5 – Bids Included in Base Period Data

The “Contract-Plan ID-Segment ID” columns in line 5 must include the contract number,
plan ID, and segment ID of each bid (including a segment ID of zero (0) for a non-segmented
plan), for which: (i) base period data are required to be reported in Worksheet 1 in accord with
the “Base Period Experience” pricing consideration, and (ii) such base period data exists.
The required format is “H####-###-###” (with the first character being H or R and ending in
“000” for a non-segmented plan).
The BPT calculates the “Contract-Plan ID-Segment ID” in cell N14 based on the contract
number, plan ID, and segment ID in Section I. However, the “Contract-Plan ID-Segment ID” in
cell N14 may be overwritten by the user, that is, if the base period data excludes the experience
of the bid.
In the second column, the user must enter each bid’s base period member months. The sum of
the member months entered in line 5 is displayed as the total member months in line 2.
If base period data are reported for more than eight bids, then the MAO must include in
supporting documentation the base period member months for such bids. Further, the user
must: (i) enter in cells N14:N17 and P14:P16, the contract-plan ID of the seven bids with the
greatest number of base period member months, and (ii) enter in cell P17, “All Other”.

SECTION III – BASE PERIOD DATA (AT PLAN’S RISK FACTOR) FOR 1/1/2022 –
12/31/2022
Section III summarizes the base period data by benefit service category.
In lines a through q:
✓ Column b – Service Category

The benefit service categories are displayed in column b.
✓ Column d – Net PMPM

Enter the net medical PMPM for each of the benefit service categories for the base
period.
✓ Column e – Cost Sharing

These fields are calculated automatically, as the difference between column i (allowed
PMPM) and column d (net PMPM). The values must be greater than or equal to zero.

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WORKSHEET 1
✓ Column f – Utilization type

Column f displays the utilization types entered on Worksheet 2. Utilization types are
required inputs on Worksheet 2, whether the pricing is based on base period experience
data or manual rates.
✓ Column g – Annualized Utilization/1,000

Enter the annualized utilization per thousand enrollees for each of the benefit service
categories for the base period data. The utilization/1000 must be reported consistently
with the utilization type displayed in column f.
✓ Column h – Average Cost per Unit

These cells are calculated automatically using the utilization provided in column g and
allowed PMPM provided in column i.
✓ Column i – Allowed PMPM

Enter the allowed PMPM by service category for the base period.
Line r – COB/Subrogation (outside claims system)

The Coordination of Benefits (COB)/Subrogation service category is intended to include only
those amounts that are to be settled outside the claim system. See the “COB/Subrogation”
pricing consideration for more information.
✓ Column b – Service Category

COB/Subrogation is displayed in lieu of a service category.
✓ Column d – Net PMPM

Line r, COB, is set equal to the allowed PMPM in column i by formula.
✓ Column e – Cost Sharing

Line r, COB, is set equal to zero.
✓ Column i – Allowed PMPM

Enter any COB/Subrogation offsets to costs as a negative number, since line r will be
added to total medical expenses.
Line s – Total Medical Expenses

Calculated automatically as the sum of lines a through r. Value should be greater than zero if
base period member months are greater than zero.
Line t – Subtotal Medicare-Covered Service Categories

Calculated automatically as the sum of lines a through k.

SECTION IV – PROJECTION ASSUMPTIONS
Section IV contains the utilization, average unit cost, and other adjustment assumptions to
project the base period data to the contract period. The values in columns j through n are the
total adjustment factors from the base period to the contract period, not annual trend rates. For
example, assume that the base period is calendar year 2022 and that the contract year is 2024. If
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WORKSHEET 1

the utilization trend is 5 percent from 2022 to 2023 and 6 percent for projecting 2023 to 2024,
then enter “1.113” in column j (1.05 x 1.06).
In lines a through r:

This section may be used for new, removed or existing benefits.
✓ Column j – Utilization Adjustment – Utilization/1,000 Trend

Enter the utilization trend factor from the base period to the contract period by service
category. An example of the use of this factor is to reflect the impact on utilization of
changes in medical management. Entering 1.000 would indicate 0 percent trend. Do not
leave this field blank. Do not enter zero (0).
✓ Column k – Utilization Adjustment – Benefit Plan Change

Enter the multiplicative adjustment factor for any benefit plan changes (for example,
increase in coverage level from base period to contract period) that affect the base
period utilization by service category. Entering 1.000 would indicate 0 percent change.
Do not leave this field blank. Do not enter zero (0).
✓ Column l – Utilization Adjustment – Population Change

Enter any expected demographic or morbidity changes that are necessary to adjust the
base period data to the contract period. An example of the use of this factor is to remove
the base period experience for certain membership (such as members affected by a
service area reduction) in order for the projected experience rate calculated in
Worksheet 2 to be based on actual experience of base period membership continuing in
the bid for the contract year. Entering 1.000 would indicate 0 percent change. Do not
leave this field blank. Do not enter zero (0).
✓ Column m – Utilization Adjustment – Other Factor

Enter any other utilization factor adjustments by service category. An example of the
use of this factor is to reflect the impact on utilization of a change in the service area
from the base period to the contract year that does not change the expected demographic
or morbidity characteristics of the base period population. Entering 1.000 would
indicate 0 percent adjustment. Do not leave this field blank. Do not enter zero (0).
✓ Column n – Unit Cost Adjustment – Provider Payment Change

Enter the unit cost adjustments by service category for expected changes in provider
payments from the base period to the contract period aside from those attributable to
changes in utilization or benefit changes. Examples of this type of change include
changes in provider reimbursement due to: (i) inflation; sequestration; an indexing
provision in provider contracts; or changes in capitation, global-capitation or risksharing arrangements aside from those attributable to changes in utilization or benefits.
Entering “1.000” would indicate 0 percent trend. Do not leave this field blank. Do not
enter zero (0).
✓ Column o – Unit Cost Adjustment – Other Factor

Enter any other factors for unit cost adjustments by service category. An example is a
change in unit cost due to intensity of service trend or the impact on unit costs of the
covered population’s change in risk from the base period to the contract period.

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WORKSHEET 1

Entering 1.000 would indicate 0 percent adjustment. Do not leave this field blank. Do
not enter zero (0).
✓ Columns p and q – Projected Additive Adjustments

Use these columns to reflect adjustments that are additive; adjustments in columns j
through o are multiplicative factors.
This section may be used for new or removed benefits.
•
•

For a benefit that is no longer being offered, but is included in the base period data,
enter the projected value of such benefit as a negative number in column p and/or q.
The adjustment for a new benefit in the contract year depends upon whether or not
there is base period experience for other benefits in the same service category.
◦ If there is no base period experience for other benefits in the same service
category, then enter the projected value of the new benefit as—
▪ A positive number in Worksheet 1, column p and/or column q, or
▪ A manual rate in Worksheet 2.
◦ If the base period experience for other benefits in the same service category is
100 percent credible, then—
▪ Enter the projected value of the new benefit as a positive number in
Worksheet 1, column p and/or column q.
▪ Do not change the credibility percentage to 0 percent; do not enter a
manual rate.
◦ If the base period experience for other benefits in the same service category is
less than 100 percent credible, then—
▪ Enter the projected value of the new benefit as a positive number in
Worksheet 1, column p and/or column q.
▪ Enter the appropriate credibility percentage for other benefits in the same
service category in Worksheet 2; do not change the credibility
percentage to 0 percent.
▪ Enter the projected value of all benefits in the service category, including
the new benefit, as a manual rate in Worksheet 2.

SECTION V – BASE PERIOD SUMMARY FOR 1/1/2022 – 12/31/2022 (EXCLUDES
OPTIONAL SUPPLEMENTAL)
Section V contains a summary of the actual bid-level base period revenue and expenses. This
section must be completed consistently with both the “Plans in Base” bid information (reported
in Section II line 5) and the information reported in Section III. See the “Base Period
Experience” pricing consideration for more information on reporting base period data.
Note that Section V must be completed in total dollars, and it must include all beneficiaries—
(that is, it must include ESRD and hospice and out-of-area and all other enrollees).
Section V must not include amounts that are entered in Worksheet 1 of the Part D BPT. (For
example, do not include MA rebates applied to Part D premiums.)
Section V must not include optional supplemental benefits.

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WORKSHEET 1

The values in the hospice category should reflect only the experience incurred during the period
enrollees are in hospice status.
This section must not be left blank.
Line 1 – CMS Revenue

This field captures MA revenue from CMS earned in the base period in total dollars. Enter
bid-based MA payments and accruals from CMS.
•
•
•
•

Include rebates for the reduction of A/B cost sharing and other A/B mandatory
supplemental benefits.
Include an estimate of the final risk-adjustment reconciliation payment for CY2022,
which will be received in 2023.
Do not include rebates applied to Parts B and D premium buydowns.
Report the CMS revenues gross of user fee reductions and net of sequestration
reductions.

If the plan was participating in the VBID Benefit Hospice Component during 2022, then
include hospice capitation payments for each month that the enrollee was in hospice status on
the first day of the month. If the plan was not participating in the VBID Benefit Hospice
Component during 2022, then exclude the A/B bid payments for each month that the enrollee
was in hospice status on the first day of the month.
In the first column, enter the amount applicable for ESRD enrollees. In the second column,
enter the amount applicable for hospice enrollees. In the third column, enter the amount
applicable to all other enrollees (including out-of-area members). The sum total is displayed in
the fourth column. Values must be greater than or equal to zero.
Line 2 – Premium Revenue

Enter the revenue from earned MA premiums for the base period in total dollars. Include
premiums associated with Medicare-covered and all A/B mandatory supplemental benefits. Do
not include premiums for optional supplemental benefits. Do not include Part D premiums.
In the first column, enter the amount applicable for ESRD enrollees. In the second column,
enter the amount applicable for hospice enrollees. In the third column, enter the amount
applicable to all other enrollees (including out-of-area members). The sum total is displayed in
the fourth column. Values must be greater than or equal to zero.
Line 3 – Total Revenue

This line is calculated as the sum of lines 1 and 2. If base period data are entered in Section III,
then this line total must be completed (that is, must be greater than zero).
Line 4 – Net Medical Expenses

Enter the net medical expenses for the base period in total dollars. Include net medical expenses
associated with Medicare-covered and all A/B mandatory supplemental benefits, and
COB/Subrogation offsets to medical costs. Do not include expenses for optional supplemental
benefits, and do not include expenses for Part D benefits.

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In the first column, enter the amount applicable for ESRD enrollees. In the second column,
enter the amount applicable for hospice enrollees. In the third column, enter the amount
applicable to all other enrollees (including out-of-area members).
For plans that did not participate in the VBID Hospice Benefit Component during 2022, net
medical expenses reported for hospice enrollees are limited to reimbursements for MA
supplemental benefits. That is, the Medicare FFS program is responsible for all Medicare
Part A and Part B claims for beneficiaries in hospice status. Additionally, the net medical
expenses for the hospice category are not to reflect claims incurred prior to election of hospice
or after disenrollment from hospice.
For plans that did participate in the VBID Hospice Benefit Component during 2022, net
medical expenses reported for hospice enrollees are to reflect all claims incurred for enrollees
in hospice status from the time of hospice election until the end of the month of hospice
disenrollment.
The net medical expenses for hospice enrollees must reflect anticipated recoveries from the
Medicare FFS program for payment of Medicare Part A and Part B claims that are not the
responsibility of the MAO.
The net medical expenses for the hospice category are not to reflect claims incurred prior to
election of hospice or after disenrollment from hospice.
The sum total is displayed in the fourth column. Values must be greater than or equal to zero. If
base period data are entered in Section III, then this line total must be completed—that is, it
must be greater than zero.
Line 5 – Member Months

Enter the base period member months.
In the first column, enter the amount applicable for ESRD enrollees. In the second column,
enter the amount applicable for hospice enrollees. The third column displays the amount
applicable to all other enrollees (including out-of-area), which is equal to the member months
entered in Section II. The sum total is displayed in the fourth column.
•

Member months are to be assigned to the hospice or non-hospice category based on the
enrollee’s status as of the beginning of the month.

Line 6 – PMPMs

Lines 6a through 6d compute base period “per member per month” values for revenue, net
medical expenses, non-benefit expenses, and gain/loss margin, respectively.
Line 7 – Non-Benefit Expenses

Enter the MA non-benefit expenses for the base period in total dollars by category. A total is
computed. Values in lines 7a, 7b, and 7c, must be greater than or equal to zero. If base period
data are entered in Section III, then this line total must be completed (that is, must be greater
than zero).
Uncollected premiums must be included in line 7b (“Direct Administration”).

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WORKSHEET 1
Line 8 – Gain/Loss Margin

Calculated as MA revenue (line 3) less net medical expenses (line 4) less MA non-benefit
expenses (line 7).
Line 9 – Percentage of Revenue

Lines 9a, 9b, and 9c compute the percentage of MA revenue for net medical expenses,
non-benefit expenses, and gain/loss margin for the base period.
Lines 10a and 10b – Medicaid Revenue and Medicaid Cost

See the “Dual-Eligible Beneficiaries” pricing consideration for more information about
Medicaid data.
The amounts in lines 10a, 10b, 10b1, and10b2 are in total dollars (not PMPMs).
Line 10b computes the Medicaid cost from Medicaid benefit expenses (line 10b1) and
Medicaid non-benefit expenses (line 10b2).

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WORKSHEET 2

MA WORKSHEET 2 – MA PROJECTED ALLOWED COSTS PMPM
This worksheet calculates the projected allowed costs for the contract year. For bids without
fully credible experience, it will be necessary to input manual rate information. The service
category lines are the same as those on Worksheet 1.

SECTION I – GENERAL INFORMATION
This section displays the information entered on Worksheet 1, Section I.

SECTION II – PROJECTED ALLOWED COSTS
Lines 1 and 2 – Projected Member Months and Projected Risk Factor

The projected member months and projected risk factors are obtained from Worksheet 5 for
total (non-DE# plus DE#), non-DE#, and DE# members.
In lines a through q:
✓ Column e – Utilization Type

Enter the type of utilization in column e for each benefit category that contains PMPM
costs in column o. Do not leave this column blank. If manual rates are not used, entries
in this column are still required and are displayed on Worksheet 1.
For each service category line, enter the appropriate utilization type that reflects the
annualized utilization/1000 enrollees entered in columns f and i. The valid utilization
types are listed below. Note that the valid utilization types vary by service category, as
indicated in the BPT cell labels.
A
D
BP
V
P
T
S
O

– Admits
– Days
– Benefit Period
– Visits
– Procedures
– Trips
– Scripts
– Other

✓ Columns f through h – Projected Experience Rate

Columns f through h are calculated automatically using the information provided in
Sections III and IV on Worksheet 1. No user inputs are needed. Column f calculates the
projected utilization, column g is the expected average cost, and column h is allowed
PMPM for the contract period, projected based on base period experience data.
✓ Columns i through k – Manual Rate

For a bid with less than fully credible experience or no experience, enter manual rate
information for the contract period.

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Column i – Annual Utilization/1,000

Enter utilization/1000 assumptions by service category in column i. Do not leave the
utilization type (column e) blank.
Column j – Average Cost

Average cost will be calculated automatically based on the entries in columns i and k.
Column k – Allowed PMPM

Enter PMPM amounts in column k.
✓ Column l – Credibility Percentage

Enter the credibility percentage by service category in column l.
The percentage entered must be between 0 percent and 100 percent. This percentage
must be between 0 percent and 99 percent if the bid is using a manual rate in the
projection. The percentage must equal 100 percent if a manual rate is not being used in
the projection.
Between lines s and t of column l, the BPT displays the credibility percentage that is
calculated based on CMS guidance and the base period member months entered on
Worksheet 1.
✓ Columns m through o – Blended Rate

Columns m through o calculate the blended contract year rate, based on the projected
experience rate, the manual rate, and the credibility percentage.
Note that, in column o, if the allowed PMPM is greater than zero and a utilization type
is not entered, the BPT results in an error. A utilization type must be entered in
column e for all service categories in which allowed PMPMs are projected.
PMPM values in column o must be greater than or equal to zero.
✓ Columns p and q – Non-DE# and DE# Allowed PMPMs

Columns p and q capture the separate allowed PMPM costs for non-DE# and
DE# enrollees. Column p must be entered on a “per non-DE# member per month” basis,
and column q must be entered on a “per DE# member per month” basis. The amounts
entered in columns p and q are used on Worksheet 4.
The BPT contains validations such that the total allowed PMPM in column o must be
approximately equal to the weighted average of the non-DE# and DE# PMPMs.
•
•

For each service category, the PMPM value for the total population must be within
$0.05 (5 cents) of the weighted average of the non-DE# and DE# PMPMs.
The BPT will finalize only if the total PMPM for all enrollees is within
$0.50 (50 cents) of the weighted average of the non-DE# and DE# PMPMs.

See the “Dual-Eligible Beneficiaries” pricing consideration for more information about
the reporting requirements of DE# pricing.
PMPM values entered in columns p and q must be greater than or equal to zero.

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✓ Column r – Percentage of Services Provided Out-of-Network

Enter the percentage of total allowed costs that are expected to be provided
out-of-network for each service line. Enter a 0 if zero percent is expected; do not leave
the field blank to indicate 0 percent. The percentage entered must be between 0 percent
and 100 percent.
If the bid has OON cost sharing PMPM on Worksheet 3, or is a regional PPO plan, then
it is expected that the percentage of services provided out-of-network on Worksheet 2
will be greater than 0 percent.
Line r – COB/Subrogation (outside claim system)

Enter any COB/Subrogation offsets to costs as a negative number, since line r will be added to
total medical expenses.
✓ Column k – Manual Rate – Allowed PMPM

Enter any PMPM COB/Subrogation offsets to costs.
✓ Column l –Credibility Percentage

For a bid with less than fully credible experience or no experience, enter the credibility
percentage subject to the conditions described above for lines a through q, column l.
✓ Column o – Blended Rate

Calculated automatically based on the projected experience rate, the manual rate, and
the credibility percentage.
✓ Columns p and q – Non-DE# and DE# Allowed PMPMs

Enter in columns p and q, the separate allowed PMPM costs for non-DE# (on a
“per non-DE# member per month” basis) and DE# (on a “per DE# member per month”
basis), respectively, subject to the conditions described above for lines a through q,
columns p and q.
✓ Column r – Percentage of Services Provided Out-of-Network

Enter the percentage of COB/Subrogation offsets to costs that are expected to be
provided out-of-network subject to the conditions described above for lines a through q,
column r.
Line s – Total Medical Expenses

Calculated automatically as the sum of lines a through r. Values must be greater than or equal
to zero.
Line t – Subtotal Medicare-Covered Service Categories

Calculated automatically as the sum of lines a through k. Values must be greater than or equal
to zero.

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WORKSHEET 3

MA WORKSHEET 3 – MA PROJECTED COST SHARING PMPM
Worksheet 3 summarizes the projected MA cost sharing for the contract year and includes both
in-network and out-of-network cost sharing.
See the “Cost Sharing” and “Dual-Eligible Beneficiaries” pricing considerations for more
information on cost sharing, in general, and on cost sharing for DE# beneficiaries.
All PBP benefits must be reflected on Worksheet 3 as though the beneficiary were paying the
cost sharing. If the PBP cost sharing is zero, the utilization for the service must still be reflected
on Worksheet 3. However, utilization for beneficiaries who do not pay cost sharing, for
example DE# beneficiaries, is not to be included on Worksheet 3 unless the DE# enrollees
make up less than 10 percent or more than 90 percent of the total bid enrollees. Worksheet 3
must be consistent with how the non-DE# and DE# Allowed PMPM columns on Worksheet 2
are completed and the guidance specified in Appendix G must be followed.

SECTION I – GENERAL INFORMATION
This section displays the information entered on Worksheet 1, Section I.

SECTION II – MAXIMUM COST SHARING PER MEMBER PER YEAR
Lines 1 through 3 – Plan-Level Out-of-pocket Maximums

The responses to the plan-level (out-of-pocket) OOP maximum drop-down questions depend
on how Section D of the Plan Benefit Package (PBP) is completed and must be—
•
•

“No” if the corresponding in-network, out-of-network, or combined plan-level
maximum enrollee OOP cost is blank in the PBP or if the PBP field is not applicable.
“Yes” if the corresponding in-network, out-of-network, or combined plan-level
maximum enrollee OOP cost is entered in the PBP, including a zero maximum enrollee
OOP cost. The PBP amount must be entered in the corresponding amount field on the
BPT.

Note that the question in line 3 regarding a combined plan-level maximum enrollee OOP cost
applies to a non-network PFFS maximum enrollee out-of-pocket cost amount.
When the response to the OOP maximum drop-down question is “Yes,” the entry in the OOP
maximum amount field must be numeric and greater than or equal to zero.
The responses to the plan-level OOP maximum drop-down questions are summarized below by
type of plan:
•

•

For HMO plans and HMO with optional supplemental POS plans enter—
◦ “Yes” for the plan-level in-network OOP maximum.
◦ “No” for the plan-level out-of-network and combined OOP maximum, even if the
PBP includes, in Section C, a POS OOP maximum for a subset of service
categories.
For HMO with mandatory supplemental POS plans enter—
◦ “Yes” for the plan-level in-network OOP maximum in Section D.

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◦

•

•

•

“Yes” or “No” for the plan-level out-of-network OOP maximum in Section D of the
PBP, consistent with the PBP.
◦ “Yes” or “No” for the plan-level combined OOP maximum, consistent with the
PBP.
For local PPO and regional PPO plans enter—
◦ “Yes” for the plan-level in-network OOP maximum.
◦ “Yes” or “No” for the plan-level out-of-network OOP maximum, consistent with the
PBP.
◦ “Yes” for the plan-level combined OOP maximum.
For full network PFFS and partial network PFFS plans enter—
◦ “Yes” or “No” for the plan-level in-network and out-of-network OOP maximums,
consistent with the PBP.
◦ “Yes” for the plan-level combined OOP maximum.
For non-network PFFS plans enter—
◦ “No” for the plan-level in-network and out-of-network plan-level OOP maximums.
◦ “Yes” for the plan-level combined OOP maximum.

✓ Line 1 – In-Network

In the first field, select “Yes” or “No” to the question “Is there a plan-level in-network
OOP maximum?” If the answer is “Yes,” then enter in the second field the maximum
total dollar amount that a member could pay for in-network cost sharing for the contract
year. This dollar amount must match the dollar amount entered in the in-network
maximum enrollee OOP cost field in Section D of the PBP.
✓ Line 2 – Out-of-Network

In the first field, select “Yes” or “No” to the question “Is there a plan-level out-ofnetwork OOP maximum?” If the answer is “Yes,” then enter in the second field the
maximum total dollar amount that a member could pay for out-of-network cost sharing
for the contract year. This dollar amount must match the dollar amount entered in the
out-of-network maximum enrollee out-of-pocket cost field in Section D of the PBP.
✓ Line 3 – Combined

In the first field, select “Yes” or “No” to the question “Is there a plan-level combined
OOP maximum?” If the answer is “Yes,” then enter in the second field one of the
following amounts:
•

•

For non-network PFFS plans, the maximum total dollar amount that a member
could pay in the contract year for cost sharing. This dollar amount must match the
dollar amount entered in the non-network maximum enrollee out-of-pocket cost
field in Section D of the PBP.
For other plans, the maximum total dollar amount that a member could pay in the
contract year for cost sharing both in- and out-of-network. This dollar amount must
match the dollar amount entered in the combined (in-network and out-of-network)
maximum enrollee out-of-pocket cost field in Section D of the PBP. Do not sum
separate in-network and out-of-network OOP maximums.

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SECTION III – DEVELOPMENT OF CONTRACT YEAR COST SHARING PMPM (PLAN’S
RISK FACTOR)
Section III summarizes the cost sharing for all services included in the plan benefit package.
The service categories are the same as presented in previous worksheets, except that
line r (COB) has been omitted. Please note that for some service categories (for example,
“Inpatient Facility”), there is more than one cost-sharing line available. A number of lines
allow you to enter multiple cost-sharing items in a service category to better match the PBP. In
addition to the lines presented, you may also use the ten blank lines at the bottom of the section
to include additional cost-sharing items that do not fit into an already defined service category
line item. Do not insert any additional rows.
The BPT allows for flexibility in entering cost-sharing information. Following are some
examples:
Example 1: The PBP contains in-network inpatient cost sharing of $100 per day for

both acute and psychiatric stays with no service-specific cost-sharing maximums.
Assume that the total in-network inpatient utilization/1000 is 2,000 days, 1,900 of
which are for acute stays and the remaining 100 for psychiatric stays. The projected
impact of the plan-level in-network cost sharing maximum is $0. These figures could be
reflected in the BPT in either of the following ways:
Option A:

Column d
Line a1 – Acute
Line a2 – Mental Health
Total

Column g
1,900
100
2,000

Column j
$100.00
$100.00
$100.00

Column k
$15.83
$ 0.83
$16.67

Column g
2,000
2,000

Column j
$100.00
$100.00

Column k
$16.67
$16.67

Option B:

Column d
Line a1 – Acute
Total

Example 2: The PBP has in-network professional copays of $10 for PCP, $20 for

specialists excluding mental health (MH) services, $20 for MH group sessions, and $40
for individual MH sessions with no service-specific cost sharing maximums. The
projected impact of the plan-level in-network cost sharing maximum is $0. Assume that
in-network office visit utilization is distributed as follows:
Type of Service
PCP
Mental Health – Individual
Mental Health – Group
Other Spec
Total

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Utilization
5,000
50
50
2,900
8,000

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Some of the options that could be used to complete the BPT are as follows:
Option A: Use the finest level of detail, with individual MH in line i3 and group MH

in line i6.
Line – Description
Line i1 – PCP
Line i2 – Specialist excl MH
Line i3 – Mental Health
Line i6 – Other
Total

Column g
5,000
2,900
50
50
8,000

Column j
$10.00
$20.00
$40.00
$20.00
$13.88

Column k
$ 4.17
$ 4.83
$ 0.17
$ 0.08
$ 9.25

Note that one of the blank rows at the bottom of the form could also be used to enter
one of the MH copays.
Option B: Same as Option A, but combine the individual and group MH copays

onto line i3.
Line – Description
Line i1 – PCP
Line i2 – Specialist
excl MH

Col g
5,000
2,900

Line i3 – MH
Total

100
8,000

Col h (not in finalized BPT)
$10 per visit
$20 per visit
$40/visit for indiv MH sessions,
$20/visit for group MH

Col j
$10.00

Col k
$4.17

20.00

4.83

30.00
$13.88

0.25
$9.25

Col j

Col k

$13.88
$13.88

$9.25
$9.25

Option C: Enter all services on one line (for example, i6).

Line – Description

Col g

Line i6
Total

8,000
8,000

Col h (not in finalized BPT)
$10/visit PCP
$20/visit non-MH specialist
$20/visit for group MH
$40/visit for indiv MH

In lines a1 through q:
✓ Column c – Service Category

This column is pre-populated with line numbers and benefit service categories.
✓ Column d – Service Category Description

This column is pre-populated with a description for many of the fixed-line cost-sharing
items. For lines with multiple options (for example, “Inpatient Facility”), the description
is intended to help you provide detailed information that can easily be checked against
the PBP.
✓ Column e – Measurement Unit Code

For each cost-sharing line, enter the appropriate measurement unit that reflects the
projected utilization per 1,000 or PMPM value entered in column g. The valid
utilization types are listed below. Note that the valid utilization types vary by service
category, as indicated in the BPT cells.

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A
– Admits
D
– Days
BP – Benefit Period
V
– Visits
P
– Procedures
T
– Trips
S
– Scripts
O
– Other
Coin – Coinsurance
Ded – Deductible (used only for single-line items, such as per-benefit period
deductibles; plan-level deductibles that apply to multiple service categories and the
pricing impact are entered in line t and column f, respectively)
✓ Column f – In-Network Effective Deductible PMPM

See the “Cost Sharing” pricing consideration for information about pricing deductibles
and entering such pricing in column f or in other columns on Worksheet 3.
✓ Columns g through k – In-Network Cost Sharing after Deductible

These fields pertain to the in-network cost sharing priced in the BPT.
Column g – In-Network Util/1000 or PMPM

Enter the projected in-network utilization/1000, or PMPM value in the case of
coinsurance, before the impact of the OOP maximum.
Column h – In-Network Description of Cost Sharing/Additional Days/Benefit Limits

These cells are text fields that may be used by bid preparers to enter internal
descriptions of in-network plan cost sharing contained in the PBP, including
descriptions of all PBP benefits priced together within each BPT service category and
any benefit limits. These details are useful since each BPT category may map to several
PBP benefit categories.
The text in column h above the “Total” row will be deleted from the finalized file and
therefore will not be uploaded to HPMS. Bid preparers must not enter information in
this section meant to be communicated to CMS or to CMS reviewers, as CMS will not
have access to it. This text will not be deleted from the working file or from the backup
file during finalization.
Enter the actual combined plan-level deductible amount (if applicable) in line t.
Column i – In-Network Effective Copay/Coinsurance before OOP Max

Enter the projected effective in-network cost-sharing amount after the plan-level
deductible has been satisfied and before the impact of the OOP max. This amount must
represent either the effective copay (if utilization is entered in column g) or the effective
coinsurance percentage (if PMPM is entered in column g).
If the effective cost-sharing amount in column g reflects the unadjusted utilization for
all days, visits, etc., then the corresponding cost-sharing amount in column j must
include an adjustment for the time period for which the cost sharing applies.

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Note that in certain cases, the effective coinsurance percentage in column i may not
match the coinsurance percentage in the PBP. See the “Cost Sharing” pricing
consideration for more information about the calculation of the effective coinsurance
percentage.
Also note that this cell is not used to calculate the in-network PMPM in column k. See
the instruction for column j, the projected effective in-network cost-sharing amount
after the plan-level deductible has been satisfied and including the impact of the OOP
maximum. However, if a value is entered in column j, then a corresponding value for
the same service category must be entered in column i.
Column j – In-Network Effective Copay/Coinsurance after OOP Max

Enter the projected effective in-network cost-sharing amount after the plan-level
deductible has been satisfied and including the impact of the OOP maximum. This
amount must represent either the effective copay (if utilization is entered in column g)
or the effective coinsurance percentage (if PMPM is entered in column g). This cell is
used to calculate the in-network PMPM in column k. The values in column j must be
less than or equal to the corresponding values in column i.
Enter the PMPM pricing impact of the in-network OOP maximum in line v.
Column k – In-Network PMPM

These cells are calculated automatically and reflect the projected cost-sharing value
PMPM for in-network services, excluding the effective in-network plan-level deductible
and including the impact of the OOP maximum. The formula uses the utilization or
PMPM amounts in column g and the effective copay or coinsurance in column j.
•
•

If the measurement unit is coinsurance (“Coin”), then the calculation is column g
times column j.
For measurement units other than coinsurance, the calculation is column g times
column j divided by 12,000.

Enter the actual in-network plan-level deductible and the pricing impact of the
in-network OOP maximum in line t and line v, respectively.
✓ Column l – Total In-Network Cost Share PMPM

These cells are calculated automatically as the sum of columns f and k. This column is
the total projected cost sharing for in-network services.
Note that, in column l, if the cost sharing PMPM is greater than zero and a utilization
type is not entered, the BPT result is an error. A utilization type must be entered in
column e for all service categories for which cost sharing PMPMs are entered.
✓ Column m – Out-of-Network Description of Cost Sharing/Additional Days/Benefit
Limits

This column may be used to enter internal descriptions of the out-of-network cost
sharing for each service category. This column will be deleted from the finalized file.
See the instructions for in-network cost sharing in column h for additional information.

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✓ Column n – Out-of-Network Cost Sharing PMPM

Enter the effective value of cost sharing for out-of-network benefits for each service
category. This column must reflect the total projected cost sharing for all
out-of-network services.
Enter the actual out-of-network plan-level deductible and the pricing impact of the
out-of-network OOP maximum in the line t and line v, respectively.
✓ Column o – Grand Total Cost Share PMPM (In-Network and Out-of-Network)

This column is calculated automatically as the sum of the in-network cost sharing
(column l) and the out-of-network cost sharing (column n).
In blank lines between q and s:
✓ Column c – Service Category

This column may be used to provide internal numbering (cells B55:B64) and detailed
cost-sharing information. The valid entries for service category (cells C55:C64) are as
follows:
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•

Inpatient Facility
Skilled Nursing Facility
Home Health
Ambulance
DME/Prosthetics/Diabetes
Outpatient (OP) Facility – Emergency
OP Facility – Surgery
OP Facility – Other
Professional
Part B Rx
Other Medicare Part B
Transportation (Non-covered)
Dental (Non-covered)
Vision (Non-covered)
Hearing (Non-covered)
Suppl. Ben. Chpt 4 (Non-covered)
Other Non-covered

Technical note: The benefit service category entries (cells C55:C64) must match exactly
those listed above. If there is a typographical error in the entry, the BPT will not
recognize the entered cost-sharing information on Worksheet 4.
✓ Column d – Service Category Description

Enter one of the valid cost-sharing items shown in rows a1 through q.
✓ Columns e through o

If a benefit service category is entered in column c (C55:C64), then then the instructions
for lines a1 through q, columns e through o apply.

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Line s – Total

Calculated automatically as the sum of columns f, k, l, or o (or not applicable).
Line t – Plan-Level Deductible Amounts

The cells in columns h, k and n are used to enter plan-level deductible amounts consistent with
Section D of the PBP as described below by plan type. When entering such amounts in the
BPT, if the PBP indicates that the amount of a deductible is—
•

•

A Medicare-defined deductible (for example, the Medicare-defined Part B deductible)
instead of a dollar amount, enter the term Medicare FFS as the amount of such
deductible. Do not enter an estimate of the actual Medicare-defined deductible for 2024
or leave the cell blank.
A dollar amount, enter that value—for example, “$500.”

If entry in the BPT of a deductible amount is not required, leave the field blank. Do not enter
zero (0) as the deductible amount.
✓ LPPO and RPPO Plan Types

For a bid with an “LPPO” or a “RPPO” plan type, the deductible always applies to
Medicare-covered out-of-network benefits. Therefore, consistent with the PBP, if the
deductible—
•

•

Applies to one or more in-network benefits, such deductible is similar to a combined
deductible. In this case,—
◦ Enter in column h, “Actual combined plan level deductible,” the deductible
amount or “Medicare FFS”.
◦ Leave blank column k, “Actual in-network plan-level deductible” and column n,
“Actual out-of-network plan-level deductible.”
Does not apply to any in-network benefits, such deductible is similar to an
out-of-network deductible. In this case,—
◦ Leave blank column h, “Actual combined plan-level deductible” and column k,
“Actual in-network plan-level deductible.”
◦ Enter in column n, “Actual out-of-network plan level deductible,” the deductible
amount or “Medicare FFS”.

✓ Plan Types Other Than LPPO and RPPO

Consistent with the PBP,—
•
•
•

Enter in column h a combined plan deductible amount or “Medicare FFS”.
Enter in column k an in-network plan deductible amount or “Medicare FFS”.
Enter in column n an out-of-network plan deductible amount or “Medicare FFS”.

Line u – PMPM Impact of MOOP

Consistent with the PBP,—
•

Enter in column k the PMPM pricing impact of the in-network OOP maximum. Such
value must reflect the PMPM difference between the pricing for in-network cost sharing
before and after the OOP maximum is applied.

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WORKSHEET 3

•

Enter in column n the PMPM pricing impact of the out-of-network OOP maximum.
Such value must reflect the PMPM difference between the pricing for out-of-network
cost sharing before and after the OOP maximum is applied.

The PMPM values must be greater than or equal to zero.

SECTION IV – MAPPING OF PBP SERVICE CATEGORIES TO BPT
Section IV captures the mapping of PBP benefit categories to BPT service categories. The cells
for PBP categories 1a through 18b are pre-populated based on the suggested mapping of PBP
to BPT categories in Appendix F, but they must be overwritten by the user to reflect the actual
mapping used in developing PMPM amounts in the BPT.
If the PBP includes benefits offered under the MA-VBID model, MA Uniformity Flexibility, or
Special Supplemental Benefits for the Chronically Ill (SSBCI), the user must enter the mapping
for PBP categories 19a, 19b, and 19c.

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WORKSHEET 4

MA WORKSHEET 4 – MA PROJECTED REVENUE REQUIREMENT
PMPM
This worksheet uses the allowed costs (Worksheet 2) and cost sharing (Worksheet 3) to
determine net medical costs in Section II. Below are the subsections contained in Section II.
•
•
•

Subsection A – “Non-DE# (Non-Dual Eligible Beneficiaries AND Dual Eligible
Beneficiaries with full Medicare cost sharing liability).”
Subsection B – “DE# (Dual-Eligible Beneficiaries without full Medicare cost sharing
liability).”
Subsection C – “All Beneficiaries.” (Total of subsections A and B)

Subsection C is the weighted average total of subsections A and B.
Non-benefit expenses and gain/loss margin are entered in Section IIC to establish the bid’s
revenue requirements for the contract year. Values are allocated between Medicare-covered
services and A/B mandatory supplemental benefits and reflect the bid’s risk factor for the
contract period. In Section III, the MAO may enter the projected ESRD “subsidy.”
Section IV captures projected Medicaid data.
See the “Dual-Eligible Beneficiaries” pricing consideration for information on completing
Worksheet 4 for DE# beneficiaries.

SECTION I – GENERAL INFORMATION
This section displays the information entered on Worksheet 1, Section I.

SECTION II – DEVELOPMENT OF PROJECTED REVENUE REQUIREMENT
SUBSECTION A – Non-Dual-Eligible Beneficiaries and Dual-Eligible Beneficiaries with Full
Medicare Cost-Sharing Liability (Non-DE#)

The risk factor for non-DE# beneficiaries is obtained from Worksheet 5 and displayed at the
top of this section.
In lines a through r:
✓ Column e – Allowed PMPM for Total Benefits

The allowed PMPM is obtained from column p of Worksheet 2.
✓ Column f – Plan Cost Sharing for Total Benefits

The total in-network and out-of-network cost sharing PMPMs are obtained from
column o of Worksheet 3 for each service category (except for line r). If additional costsharing lines are entered on Worksheet 3, then verify that the total cost sharing on
Worksheet 4 equals the total on Worksheet 3.
✓ Column g – N/A

This column is left intentionally blank; it is not applicable to this section.

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WORKSHEET 4
✓ Column h – Net PMPM for Total Benefits

The net PMPM is calculated automatically as column e less column f. Values must be
greater than or equal to zero.
✓ Columns i and j – Percentage for Covered Services

The PMPM amounts shown in columns e, f, and h reflect all benefits covered by the
MA bid. The user must enter in columns i and j the expected percentages of benefits
that represent Medicare-covered services. The percentages may differ for Non-DE#
beneficiaries and DE# beneficiaries as explained below.
•

•

For Non-DE# beneficiaries in subsection A,—
◦ The BPT uses the percentages in column i, to allocate allowed costs (column e)
between Medicare-covered services (column m) and A/B mandatory
supplemental benefits.
◦ The BPT uses the percentages in column j, to allocate the plan’s cost sharing
(column f) between plan cost sharing for Medicare-covered services (column l)
and cost sharing for A/B mandatory supplemental benefits.
For DE# beneficiaries in subsection B,—
◦ The BPT uses the percentages in column i, to allocate provider reimbursement
plus actual cost sharing for total benefits (column e) between Medicare-covered
services (column m) and A/B mandatory supplemental benefits.
◦ The BPT uses the percentages in column j, to allocate the plan’s cost sharing
(column f) between actual cost sharing for Medicare-covered services (column l)
and cost sharing for A/B mandatory supplemental benefits.

The percentage entered must be between 0 percent and 100 percent.
For services that are defined in the PBP as non-covered, the percentage for
Medicare-covered services is defaulted to 0.0 percent (for example, line l,
“Transportation Non-covered”). For all other services, the MAO must estimate the
percentage of covered services. For example, if the MAO’s benefit for a service is
richer than that under FFS Medicare or is classified as a mandatory supplemental
benefit, such as a POS benefit in the PBP, the user must enter in column i a percentage
less than 100 percent.
Non-DE# Example:

The MAO estimates that 99.92 percent of the allowed PMPM in column e for
outpatient facility emergency services is for Medicare-covered services and
0.08 percent is for A/B mandatory supplemental benefits, whereas 98.03 percent of
the cost sharing PMPM in column f is for Medicare-covered services and
1.97 percent of the cost sharing is for A/B mandatory supplemental benefits. The
entries in columns i and j would be as follows:
(c)
Service Category
f. OP Facility – Emergency

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(i)

(j)

% for Covered Services
Allowed
Cost Sharing
99.92%
98.03%

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WORKSHEET 4

See Appendix C for instructions on completing columns i and j for Part B-only plans.
For the Medicare-covered service categories (lines a through k), the values entered in
columns i and j must generate appropriate pricing for mandatory supplemental benefits
in columns p through r, consistent with the PBP. In addition, the relationship between
the PBP benefits and the BPT pricing is to be consistent with the mapping entered on
Worksheet 3 Section IV. For example, if a bid covers additional inpatient hospital days,
and the bid is using the suggested mapping from Appendix F, the PMPM pricing for the
non-covered inpatient services is to be represented in line a, column p, “Net PMPM for
Additional Services.”
✓ Column k – FFS Medicare Actuarial Equivalent (AE) Cost-Sharing Proportions

These values are populated based on the enrollment projections entered in Worksheet 5.
✓ Column l – Plan Cost Sharing for Medicare-Covered Services

This column calculates the portion of the plan cost sharing that is attributable to
Medicare-covered benefits (calculated as column f times column j). This column is used
to determine the reduction of A/B cost sharing in column q.
Plan cost sharing for Medicare-covered services is compared to Medicare FFS
actuarially equivalent cost sharing in the BPT “red-circle” validations.
✓ Columns m through o – Medicare-Covered using Actuarial Equivalent Cost Sharing

These columns are calculated automatically and are the basis for the costs included in
the “Plan A/B Bid.”
Column m – Allowed PMPM

The Medicare-covered allowed costs are calculated automatically based on the
percentage of Medicare-covered benefits input in column i. Column m is calculated as
column e times column i.
Column n – Fee-for-Service Medicare Actuarial Equivalent (AE) Cost Sharing

The FFS Medicare AE cost sharing PMPMs are based on the proportions in column k.
Column n is calculated as column k times column m.
Column o – Net PMPM

Calculated as column m minus column n.
✓ Columns p through r – A/B Mandatory Supplemental (MS) Benefits

These columns are calculated automatically and are the basis for the costs included in
the A/B mandatory supplemental premium.
Column p – Net PMPM for Additional Services

These amounts reflect the net costs (that is, allowed costs less enrollee cost sharing) for
non-covered benefits. This column is calculated automatically as the allowed costs for
non-covered benefits (column e minus column m) less the cost sharing for non-covered
benefits (column f minus column l). These values must be greater than or equal to zero
(except line r, COB, which may be negative).

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WORKSHEET 4
Column q – Reduction of A/B Cost Sharing

This column is the difference between FFS AE cost sharing and the plan cost sharing
for Medicare-covered services, calculated automatically as column n minus column l.
This reduction is sometimes referred to as the “FFS cost-sharing buydown.”
Column r – Total A/B Mandatory Supplemental Benefits

This column is calculated automatically as the sum of columns p and q.
Line s – Total Medical Expenses

The total medical expense is the sum of lines a through r, except for columns i, j, and k.
SUBSECTION B – Dual-Eligible Beneficiaries without Full Medicare Cost-Sharing Liability
(DE#)

The risk factor for DE# beneficiaries is obtained from Worksheet 5 and displayed at the top of
this section.
In lines a through r:
✓ Column e – Reimbursement plus Actual Cost Sharing for Total Benefits

Calculated automatically as the sum of columns g and h.
✓ Column f – Plan Cost Sharing for Total Benefits

This column contains a formula that may be overwritten by the user. The default
formula divides the non-DE# beneficiary cost sharing by the non-DE# allowed, and
then multiplies by the DE# allowed from column q of Worksheet 2. See the
“Dual-Eligible Beneficiaries” pricing consideration for more information about plan
cost sharing.
✓ Column g – Actual Cost Sharing for Total Benefits

Calculated automatically as the minimum of columns f and k.
✓ Column h – Plan Reimbursement for Total Benefits

Enter values in accord with the “Dual-Eligible Beneficiaries” pricing consideration.
✓ Columns i and j – Percentage for Covered Services

See instructions under Worksheet 4, subsection IIA, columns i and j.
✓ Column k – State Medicaid Required Beneficiary Cost Sharing

Enter values in accord with the “Pricing Considerations” section of these Instructions.
✓ Column l – Actual Cost Sharing for Medicare-Covered Services

Calculated automatically as column g times column j.
✓ Columns m through o – Medicare-Covered Using Medicaid Cost Sharing

These columns are calculated automatically and are the basis for the costs included in
the “Plan A/B Bid.”

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WORKSHEET 4
Column m – Allowed PMPM

The Medicare-covered allowed costs are calculated automatically based on the
percentage of Medicare-covered benefits input in column i. Column m is calculated as
column e times column i.
Column n – Medicaid Cost Sharing

Calculated automatically as column k times column j.
Column o – Net PMPM

Calculated as column m minus column n.
✓ Columns p through r – A/B Mandatory Supplemental (MS) Benefits

These columns are calculated automatically and are the basis for the costs included in
the A/B mandatory supplemental premium.
Column p – Net PMPM for Additional Services

This column is calculated automatically as the allowed costs for non-covered benefits
(column e minus column m) less the cost sharing (column g minus column l). These
values must be greater than or equal to zero (except line r, COB, which may be
negative).
Column q – Reduction of A/B Cost Sharing

This column is calculated automatically as column n minus column l.
Column r – Total A/B Mandatory Supplemental Benefits

This column is calculated automatically as the sum of columns p and q.
Line s – Total Medical Expenses

The total medical expense is the sum of lines a through r, except for columns i and j.
SUBSECTION C – All Beneficiaries (Total of Subsections A and B)

The risk factor for total beneficiaries (non-DE# plus DE#) is obtained from Worksheet 5 and
displayed at the top of this section.
In lines a through q and t:
✓ Columns e through g – N/A

These columns are left intentionally blank; they are not applicable to this section.
✓ Column h – Net PMPM for Total Benefits

The PMPM is calculated automatically as the weighted average of subsections A and B,
based on projected enrollment in Worksheet 5.
✓ Columns i through n – N/A

These columns are left intentionally blank; they are not applicable to this section.
✓ Column o – Net PMPM for Medicare-Covered Benefits

The PMPM is calculated automatically as the weighted average of subsections A and B,
based on projected enrollment in Worksheet 5.
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WORKSHEET 4
✓ Columns p through r – A/B Mandatory Supplemental (MS) Benefits

These columns are calculated automatically and are the basis for the costs included in
the A/B mandatory supplemental premium.
Column p – Net PMPM for Additional Services

The PMPM is calculated automatically as the weighted average of subsections A and B,
based on projected enrollment in Worksheet 5.
Column q – Reduction of A/B Cost Sharing

The PMPM is calculated automatically as the weighted average of subsections A and B,
based on projected enrollment in Worksheet 5.
Column r – Total A/B Mandatory Supplemental Benefits

This column is calculated automatically as the sum of columns p and q.
Line r – ESRD

This line is populated based on Section III.
Line s

For future use.
Line u – Total Medical Expenses

The total medical expense is the sum of lines a through t. The value in column o is the net
medical cost included in the “Plan A/B Bid.” The value in column r is the net medical cost
included in the A/B mandatory supplemental premium.
Line v – Non-Benefit Expenses

Enter the non-benefit expense information for total MA benefits in column h for each of the
categories.
The worksheet distributes the non-benefit expenses proportionately between Medicare-covered
services (column o) and A/B mandatory supplemental benefits (column r) for each category.
Within A/B mandatory supplemental benefits, non-benefit expenses are also distributed
between “Additional Services” (column p) and “Reduction of A/B Cost Sharing” (column q).
✓ Lines v1 through v4 – Non-Benefit Expenses

Total non-benefit expenses are input in column h and are allocated proportionately
between Medicare-covered services (column o) and A/B mandatory supplemental
benefits (column r). Note that the same proportion is used for each line item. The
allocation is based on the relative proportion of the bid’s medical expense requirements
for Medicare-covered services (“bid”) and A/B mandatory supplemental benefits,
excluding the PMPM impact of the ESRD subsidy.
Column h – Non-Benefit Expense PMPM for Total Benefits

Enter the PMPM by category. Lines v1, v2, and v3 must be greater than or equal to
zero.

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WORKSHEET 4
Column o – Non-Benefit Expense PMPM for Medicare-Covered Services

These values are calculated as column h minus column r.
Column r – Non-Benefit Expense PMPM for A/B Mandatory Supplemental Benefits

These values are calculated based on the relative proportion of A/B mandatory
supplemental benefits, excluding the impact of the ESRD subsidy.
✓ Line v5 – Total Non-Benefit Expense
Column h – Total Non-Benefit Expense PMPM

The sum of lines v1 through v4 for Total Benefits. The value must be greater than or
equal to zero.
Columns p and q – Non-Benefit Expense PMPM for Additional Services and
Reduction of A/B Cost Sharing

The total non-benefit expense for A/B mandatory supplemental benefits (column r) is
allocated between additional services (column p) and reduction of A/B cost sharing
(column q). The allocation is based on the relative proportions of additional services
and the reduction of A/B cost sharing, excluding the impact of the ESRD subsidy.
Columns o and r – Non-Benefit Expense PMPM for Medicare-Covered and A/B
Mandatory Supplemental Benefits

The sum of lines v1 through v4. The value must be greater than or equal to zero.
Line w – Gain/Loss Margin

Enter the projected PMPM for the gain/loss margin in column h for total MA services. Do not
leave this field blank.
The gain/loss margin is distributed proportionately between Medicare-covered services and
A/B mandatory supplemental benefits. The allocation is based on the relative proportions of the
medical expense requirements for Medicare-covered services and A/B mandatory supplemental
benefits, excluding the PMPM impact of the ESRD subsidy.
Line x – Total Revenue Requirement

The sum of lines u (medical expense), v (non-benefit expense), and w (gain/loss margin). The
value in column o is the total revenue requirement of the “Plan A/B Bid.”
Lines y1 through y3 – Percentage of Revenue

These lines calculate the ratio of net medical expense, non-benefit expense, and gain/loss
margin as a percentage of revenue.
Lines z1 through z2 – Related-Party Expenses

See the “Related-Party Arrangements” pricing consideration for more information regarding
related-party requirements.

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WORKSHEET 4
✓ Line z1 – Related-Party and Same Tax Identification Number Allowed Cost PMPM

Enter the best estimate of the plan sponsor’s total allowed PMPM cost for the sum of
the following:
1) All related-party medical services in the bid, and
2) Services provided by entities with the same tax identification number
reported in the bid.
This entry must reflect the expected allowed costs consistent with actual contracts,
capitation and risk arrangements, and financial reporting.
✓ Line z2 – Related-Party Non-Benefit Expense PMPM

Enter the best estimate of the plan sponsor’s total PMPM cost for all related-party
non-benefit expenses reported in the bid. This entry must reflect the expected
non-benefit expenses for all related parties, consistent with actual contracts and
financial reporting.

SECTION III – DEVELOPMENT OF PROJECTED CONTRACT YEAR ESRD “SUBSIDY”
Section III allows for an adjustment to A/B mandatory supplemental benefits in line r of
Section II. This adjustment is split into two sections: one for basic benefits and the other for
supplemental benefits. Values entered in input cells must be greater than or equal to zero.
CY Member Months (entered by county)

This value is obtained from Worksheet 5.
CY ESRD Member Months

This value is obtained from Worksheet 5.
CY Out-of-Area (OOA) Member Months

This value is obtained from Worksheet 5.
Basic Benefits

See the “End-Stage-Renal Disease (ESRD)” pricing consideration for more information about
this section of the BPT.
Supplemental Benefits

See the “End-Stage-Renal Disease (ESRD)” pricing consideration for more information about
this section of the BPT.

SECTION IV – PROJECTED MEDICAID DATA
This section contains three input cells to capture Medicaid projected revenue and costs. Entries
must be reported on a “per member per month” (PMPM) basis. Values must be greater than or
equal to zero. See the “Dual-Eligible Beneficiaries” pricing consideration for more information
about Medicaid data.

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WORKSHEET 5

MA WORKSHEET 5 – MA BENCHMARK PMPM
This worksheet calculates the A/B benchmark and evaluates whether the bid generates a
savings or the need to charge a basic member premium.
Below is a brief description of the sections contained in this worksheet:
•
•
•
•
•
•
•
•

Section I
– General information entered on Worksheet 1.
Section II
– Summary of development of the benchmark and the bid.
Section III
– Summary of development of the savings or basic member premium.
Section IV
– Development of the regional A/B benchmark (including the statutory
component of the regional benchmark). Applies only to a “RPPO” plan type.
Section V
– Summary of Quality Bonus Rating information (from CMS).
Section VI
– Projected bid-specific information based on projected enrollment.
Section VII – Other Medicare information (populated based on the enrollment
projection).
Section VIII – Projected CY Member Months.

The A/B benchmark calculation is based on the following data elements:
•
•
•
•
•
•

Service Area: Counties within the MA service area defined by their respective
Social Security Administration (SSA) state-county codes.
Projected Member Months (excluding ESRD and hospice): Projected non-ESRD
non-hospice member months, reported by county of the bid’s service area.
Projected Risk Factor (excluding ESRD and hospice): Projected average risk factor for
non-ESRD non-hospice enrollees, reported by county of the bid’s service area.
Medicare Secondary Payer Adjustment Factor: Factor relative to all payments.
For regional PPO plans, the mix of Medicare beneficiaries (nationally) between original
Medicare and Medicare Advantage (used to weight the statutory and plan bid
components of the regional A/B benchmark).
Quality Bonus Rating (from CMS).

SECTION I – GENERAL INFORMATION
This section displays the information entered on Worksheet 1, Section I.

SECTION II – BENCHMARK AND BID DEVELOPMENT
Line 1 – Member Months (from Section VI)

The value for projected member months (including out-of-area but excluding ESRD and
hospice) is obtained from Section VI (entered by county of the bid’s service area). You must
enter the projected non-DE# member months (including non-DE# out-of-area). The value for
DE# member months is calculated as the difference between the total and the non-DE#
amounts. See the “Pricing Considerations” section of these Instructions for more information
about projected member months.
Line 2 – Standardized A/B Benchmark (at 1.000 Risk Score)

This value is obtained from Section IV for regional plans and from Section VI for local plans.
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WORKSHEET 5
Line 3 – Medicare Secondary Payer (MSP) Adjustment

User input is required. Note that this field is formatted as a percentage; therefore, if the value is
2.53 percent, enter “2.53” or “0.0253”. Do not leave this field blank. If zero percent is the
projected value, then enter zero (0) in this field. The value entered must be between 0 percent
and 100 percent.
Line 4 – Weighted Average Risk Factor

This member/payment-weighted average value is obtained from Section VI. You must enter the
projected non-DE# value (including non-DE# out-of-area). The DE# value is calculated based
on the total and the non-DE# amounts. The DE# risk score default calculation may be
overwritten by the user. See the “Projected Risk Score for CY2024” pricing consideration for
more information about the DE# risk score default calculation.
If the value for DE# members equals zero, then the non-DE# risk score must equal the total risk
score.
Line 5 – Conversion Factor

Calculated as (1.000 minus line 3) times line 4. This is an intermediate step in the BPT
calculations.
Line 6 – Plan (or Regional) A/B Benchmark

Calculated as line 2 times line 5. The BPT finalization process will verify that this value must
be greater than zero.
Line 7 – Plan A/B Bid

This value is obtained from Worksheet 4, rounded to two decimals. The BPT finalization
process will verify that this value must be greater than zero.
Line 8 – Standardized A/B Bid (@ 1.000)

Calculated as line 7 divided by line 5, and then rounded to two decimals.

SECTION III – SAVINGS/BASIC MEMBER PREMIUM DEVELOPMENT
Line 1 – Savings

Calculated as the difference between the plan (or regional) A/B benchmark and the plan A/B
bid, but not less than zero. This value is rounded to two decimals.
Line 2 – Rebate

Calculated as Section III, line 1 (“Savings”) times Section V, line 3 (“Rebate %”). This value is
rounded to two decimals.
Line 3 – Basic Member Premium

Calculated as the standardized A/B bid less the standardized A/B benchmark, but not less than
zero. This value is rounded to two decimals.

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WORKSHEET 5

The BPT will not finalize if there are any invalid values (such as “#N/A”, “#DIV/0!”, “#REF!”,
“#NAME?”, etc.) in this field.

SECTION IV – STANDARDIZED A/B BENCHMARK – REGIONAL PPO PLANS ONLY
This section calculates the standardized A/B benchmark for regional PPO plans.
Line 1 – Statutory Component for Region

The PMPM amount, defined by region, is pre-populated by CMS. The weighting is also
pre-populated in the BPT by CMS.
Line 2 – Plan Bid Component

The plan bid component of the MA regional PPO benchmark will be announced by CMS after
the bids are submitted. It will likely be announced at the same time that the Part D national
average monthly bid amount is announced (typically in August).
MAOs may input an estimated average regional PPO bid amount in their initial bid submission.
For bids that are submitted prior to the announcement of the regional PPO bid averages, there
are two options for completing this field: (i) leave the cell blank, in which case the plan’s
submitted standardized bid (Section II, line 8) is used as the plan bid component, or (ii) input a
reasonable estimate of the average regional PPO bid for the region. The MA regional PPO
announcement includes the weighted-average MA regional PPO bid for each region. MAOs
will be instructed at the time of the announcement to submit revised regional PPO MA BPTs
with the applicable average regional PPO bid amount entered in line 2. Any changes in rebates
due to the actual plan bid component must be reallocated at the same time. Appendix E
contains additional guidance regarding the rebate reallocation period.
Line 3 – Standardized A/B Benchmark

This line is calculated as the weighted average of lines 1 and 2 (if line 2 has a value entered). If
line 2 does not have a value entered (that is, if the MAO has not entered an estimated value for
a pre-announcement bid submission), the amount from Section II, line 8 is used in the
calculation.

SECTION V – QUALITY RATING
This section captures quality rating information released by CMS. See the “Affordable Care
Act” pricing consideration for more information about QBP star ratings and rebate percentages.
Line 1 – Quality Bonus Rating (per CMS)

Enter the numeric quality bonus rating (that is, QBP “star rating”) released by CMS for the
contract (that is, a numeric value from “1.0” through “5.0”) or leave the cell blank. The value
entered in the BPT will be validated upon upload. (That is, if the BPT value does not match the
value released by CMS in HPMS, the upload will be rejected.)

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Line 2 – New/Low Indicator (per CMS)

Enter the new/low indicator released by CMS for the contract. The four valid options are as
follows:
•
•
•
•

“Low”
“New contract under new parent org”
“New contract under existing parent org”
“Not applicable”

If the new/low indicator is applicable, the text entered in the BPT will be validated upon
upload. (That is, if the BPT text does not match the text released by CMS in HPMS, the upload
will be rejected.)
Line 3 – Rebate Percentage

The BPT computes the rebate percentage that is used in Section III, line 2.

SECTION VI – COUNTY-LEVEL DETAIL AND SERVICE AREA SUMMARY
This section contains detailed data by county and develops bid-specific county-level MA
payment rates. For most bids, the only user inputs are the state-county codes (column b),
projected member months (column e), projected risk factors (column f) by county, and
out-of-area enrollment data. Entries must reflect bid-specific non-ESRD non-hospice
enrollment projections for each county within the service area, including the case in which
member months are projected to be zero. There is no requirement to enter member months
greater than zero in order to generate a county level payment rate.
As with all aspects of the projections for MA-PD plans, the enrollment and risk scores for the
MA bid must be based on a population consistent with the corresponding Part D bid.
Payment rates for regional PPOs may be developed using plan-provided geographic intraservice area rate (ISAR) factors on a case-by-case basis, as explained in the “Pricing
Considerations” section of these Instructions.
The BPT will not finalize if there are any invalid values (such as “#N/A”, “#DIV/0!”, “#REF!”,
“#NAME?”, etc.) in Section VI.
Line 1 – Use of Plan-Provided ISAR Factors

Regional plans that wish to use ISAR factors to develop their county payment rates must enter
“Yes”. (Technical note: Do not enter “Y” in this field; enter the entire word “Yes”.)
Line 2 – Total or Weighted Average for the Service Area

The county-level data are summarized in this line, weighted by projected member months
(including out-of-area in row 38). The projected risk factors are also weighted by
MA Ratebook rates.

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Line 3 – County-Level Detail
✓ Column b – State-County Code

Enter the Social Security Administration (SSA) state-county codes that define the MA
service area, in accordance with the following:
•

•
•
•
•
•

Each state-county code must be entered as a text input (that is, must include a
preceding apostrophe) and must include all leading zeroes (for example, ‘01000).
This field is formatted as the “General” format in Excel, in order to support the
functionality to link spreadsheets. Therefore, county codes must be entered as text
(that is, using a preceding apostrophe) and must include any leading zeroes.
If the service area has more than one county, do not leave any blank rows between
the first and last state-county code entered. Also, do not leave blank rows before the
first county code entered.
Do not enter the same state-county code more than once.
Do not insert any additional rows in the worksheet.
Do not input the out-of-area county, “99999” in rows 39 through 9999. Out-of-area
enrollees must be captured in row 38.
The county codes entered in the BPT must match the service area defined in HPMS
by the MAO. Any service area discrepancies between the BPT and HPMS may
result in delays during bid review and could affect the approval timeline of the bid.

Technical note: In the “finalized” MA BPT file, the county-level section will be sorted
in a descending order, based on the county codes entered in column b. See the BPT
technical instructions for further information.
✓ Column c – State

The BPT will display the applicable state name based on the corresponding code
entered in column b. No user entry is required.
✓ Column d – County Name

The BPT will display the applicable county name based on the corresponding code
entered in column b. No user entry is required.
✓ Column e – Projected Member Months

Enter the projected contract year member months for each county in the service area.
The projected member months must include both aged and disabled members, as well as
DE# and non-DE# members, but exclude ESRD and hospice members. Enter Out-ofarea projected member months in row 38.
See the “Pricing Considerations” section of these Instructions for more information
about projected member months.
Technical note: The data will display as whole values but can be entered with decimal
places.
If member months are entered in a particular row of column e, then a corresponding
county code and a risk score must be entered in columns b and f, respectively.

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WORKSHEET 5
✓ Column f – Projected Risk Factors

Enter the risk factors for the projected non-ESRD non-hospice membership by county.
The risk factors for out-of-area members must be entered in row 38.
If a risk score is entered in a particular row of column f, then a corresponding county
code must be entered in column b.
✓ Column g – Plan-Provided ISAR Factors

If the MAO has support for plan-specific ISAR factors for a regional PPO, then—
•
•

Enter “Yes” in line 1, in response to the question “Use of plan-provided ISAR?”
(Technical note: Do not enter “Y” in this field; enter the entire word “Yes”.)
Enter the plan-provided ISAR factors in column g of the county-level section.
Factors can be in the form of either PMPM values or a relative scale.

✓ Column h – MA Risk Ratebook: Unadjusted

The BPT will display the applicable published ratebook risk rates for the contract
period. If enrollee type is “A/B,” the amounts shown are the total of Part A and Part B.
If enrollee type is “Part B-Only,” the amount shown is the Part B rate.
✓ Column i – MA Risk Ratebook: Risk-Adjusted

The BPT will calculate the risk-adjusted rates based on the rates in column h and the
risk scores entered in column f.
✓ Column j – ISAR Scale

The BPT will calculate the ISAR scale based on either the plan-provided ISAR factors
in column g (if provided) or the ratebook rates in column h.
✓ Column k – ISAR-Adjusted Bid

The BPT will calculate the ISAR-adjusted bid based on the ISAR scale in column j and
the standardized A/B bid in Section II. Note that the payment rates represent coverage
for Medicare Part A and Part B (except for Part B-only plans). The values will then be
separated into Part A and Part B payment rates in columns l and m.
✓ Columns l through m – Risk Payment Rates

These columns are calculated based on the ISAR-adjusted bid in column k and the risk
ratebook proportions for Part A and Part B.

SECTION VII – OTHER MEDICARE INFORMATION
This section contains county-level Medicare information used in the BPT and is populated
based on the county codes input in column b and the projected member months entered in
column e.
The BPT will not finalize if there are any invalid values (such as “#N/A”, “#DIV/0!”, “#REF!”,
“#NAME?”, etc.) in Section VII.

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WORKSHEET 5
Columns n through p – Original Medicare Cost-Sharing Proportional Factors

These columns are populated based on the enrollment projections and are used in column k of
Worksheet 4, Section IIA.
Columns q through s – FFS Costs Used to Weight Original Medicare Cost Sharing

These columns are populated based on the enrollment projections and are used in the weighted
averages (row 36) of columns n through p.
Columns t through u – Metropolitan Statistical Area (MSA)

These columns are populated based on the enrollment projections. The names shown are based
on metropolitan and micropolitan statistical areas as defined by the Office of Management and
Budget. Though this information is not directly used in the BPT calculations, it is used by CMS
during bid reviews.

SECTION VIII – PROJECTED CY MEMBER MONTHS
This section captures and summarizes the various components of the bid’s member months.
Line 1 – Member Months entered by county (from Section VI)

This value is obtained from Section VI.
Line 2 – ESRD Member Months

Enter the projected CY ESRD member months. Do not leave this field blank. If no ESRD
enrollees are expected during the contract period, then enter a zero (0) in this field.
This amount is used on Worksheet 4 Section III.
Line 3 – Hospice Member Months

Enter the projected CY hospice member months. Do not leave this field blank. If no hospice
enrollees are expected during the contract period, then enter a zero (0) in this field.
Line 4 – Out-of-Area (OOA) Member Months

This value is obtained from Section VI.
Line 5 – Total Member Months

Calculated as the sum of lines 1 through 4.
The enrollment for the MA bid must be based on a population consistent with the
corresponding Part D bid.

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WORKSHEET 6

MA WORKSHEET 6 – MA BID SUMMARY
Worksheet 6 summarizes the results of the calculations of the BPT. In addition, some user
inputs are required as described below.

SECTION I – GENERAL INFORMATION
This section displays the information entered on Worksheet 1, Section I.

SECTION II – OTHER INFORMATION
SUBSECTION A – Part B Information

See the “Pricing Considerations” section for further information regarding allocating rebates to
buy down the Part B premium.
Line 1 – Maximum Part B Premium Buydown Amount, per CMS

This value is pre-populated by CMS at the time that the BPT is released.
SUBSECTION B – Rebate Allocation for Part B Premium
Line 1 – PMPM Rebate Allocation for Part B Premium

Enter the PMPM amount of rebates to reduce the Part B premium.
Line 2 – Rounded Part B Rebate Allocation

The PMPM amount entered in line 1 is rounded to one decimal (that is, the nearest dime) to
comply with withhold system requirements.
SUBSECTION C – Rebate Allocations
Line 1 – Reduce A/B Cost Sharing

Enter the PMPM amount of rebates to reduce A/B cost sharing.
Line 2 – Other A/B Mandatory Supplemental Benefits

Enter the PMPM amount of rebates to apply toward other A/B mandatory supplemental
benefits.

SECTION III – PLAN A/B BID SUMMARY
Section III summarizes the BPT information in three subsections.
•
•

Subsection A is an overview of the plan A/B bid and the costs of A/B mandatory
supplemental benefits, and it also displays certain benchmark and risk score information
from Worksheet 5.
Subsection B contains the MA rebate allocation.

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WORKSHEET 6

•

Subsection C develops the MA premium and requires the input of the Part D premium
information. Consistent with previous worksheets, any optional supplemental
benefits/premiums are to be excluded.

SUBSECTION A – Overview

This section summarizes information entered on previous worksheets.
Line 1 – Net Medical Cost

These amounts are obtained from Worksheet 4.
Line 2 – Non-Benefit Expenses

These amounts are obtained from Worksheet 4.
Line 3 – Gain/Loss Margin

These amounts reflect the estimated net gain/loss for the bid, including the amount of risk
margin desired. These amounts are obtained from Worksheet 4.
Line 4 – Total Revenue Requirement

The sum of lines 1 through 3. These amounts are the required revenue at the bid’s risk factor
and are calculated prior to any rebate allocation.
Line 5 – Standardized A/B Benchmark

This amount is obtained from Worksheet 5.
Line 6 – Plan A/B Benchmark (or Regional A/B Benchmark for Regional PPO Plans)

This amount is obtained from Worksheet 5.
Line 7 – Risk Factor

This amount is obtained from Worksheet 5.
Line 8 – Conversion Factor

This amount is obtained from Worksheet 5.
SUBSECTION B – MA Rebate Allocation

MAOs may choose which of the following category, or categories, in which to allocate rebates:
•
•
•
•
•

Reduce A/B cost sharing.
Other A/B mandatory supplemental benefits.
Part B premium buydown.
Part D basic premium buydown.
Part D supplemental premium buydown.

See Appendix E for information regarding the reallocation of rebates (permitted for certain
bids) after the publication of the Part D and MA regional benchmarks.

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WORKSHEET 6
Line 1 – MA Rebate

This amount is obtained from Worksheet 5.
The BPT will not finalize if there are any invalid values (such as “#N/A”, “#DIV/0!”, “#REF!”,
“#NAME?”, etc.) in this field.
Lines 2 through 6 – Rebate Allocations by Category

The fourth column displays the portion of the total MA rebate that is allocated to each of the
rebate options. Note that the rebate allocations are entered in separate sections of this
worksheet, to ensure that the rebate allocations are rounded to comply with withhold system
requirements.
The first three columns distribute the allocated rebate among medical expenses, non-benefit
expenses, and gain/loss margin in the same proportion that was used in Worksheet 4. The fifth
column contains the maximum value that applies to each rebate category. See the “Pricing
Considerations” section of these Instructions for more information on rebate allocation.
The BPT will not finalize if there are any invalid values (such as “#N/A”, “#DIV/0!”, “#REF!”,
“#NAME?”, etc.) in these fields.
Line 7 – Total Rebate Allocated

The sum of lines 2 through 6. This amount must equal the amount in line 1.
If there are any “unallocated” rebates shown, including pennies, these amounts must be
distributed among the categories available. The BPT will not finalize if there are any invalid
values (such as “#N/A”, “#DIV/0!”, “#REF!”, “#NAME?”, etc.) in this field.
SUBSECTION C – Development of Estimated Plan Premium
Line 1 – A/B Mandatory Supplemental Revenue Requirements

This amount is obtained from Section IIIA.
Line 2 – Less Rebate Allocations

These amounts are obtained from Section IIIB, lines 2 and 3.
Line 3 – A/B Mandatory Supplemental Premium

The sum of lines 1 and 2.
Line 4 – Basic MA Premium

This amount is obtained from Worksheet 5.
Line 5 – Total MA Premium (excluding Optional Supplemental)

The sum of lines 3 and 4.
Line 6 – Rounded MA Premium (excluding Optional Supplemental)

The total MA premium from line 5 is rounded to one decimal (that is, the nearest dime) to
comply with withhold system requirements. Value must be greater than or equal to zero.

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WORKSHEET 6

The BPT will not finalize if there are any invalid values (such as “#N/A”, “#DIV/0!”, “#REF!”,
“#NAME?”, etc.) in this field.
Line 7 – Part D Basic Premium
✓ Line 7a – Prior to Rebates

Enter the Part D basic premium prior to rebates after rounding (found on the separate
Part D BPT). This amount must equal the amount on the Part D BPT (that is, the
amount prior to application of any MA rebates). Note: The Part D basic premium prior
to rebates must be entered in the MA BPT, even if no MA rebates are allocated to buy
down the Part D basic premium. This field is not applicable to MA-only plans.
✓ Lines 7b and 7c – A/B Rebates Allocated to the Part D Basic Premium

Enter the rebates that the MAO wishes to allocate to the Part D basic premium. The
Part D rebate allocation must be rounded to one decimal. If this is not done, then the
BPT will round these rebates to one decimal (in line 7c) to comply with withhold
system requirements. This field is not applicable to MA-only plans.
✓ Line 7d – Part D Basic Premium

The estimated Part D basic premium net of rebates is calculated automatically as line 7a
minus line 7c.
The Part D basic premium in the MA BPT is an estimate when the bid is initially
submitted in June. The actual plan premium will be calculated by CMS, outside the
BPT, when the Part D national average monthly bid amount is determined (typically in
August).
Note that the Part D basic premium prior to rebates can be a negative number.
This field is not applicable to MA-only plans (that is, it must be equal to zero).
If the plan intention for the target premium (cell R47) equals “Low Income Premium
Subsidy Amount (LIPSA)” and the user enters Part D basic rebates (cell R36) greater
than zero, then the Part D basic premium after rebates (cell R37) must be greater than
zero.
The bid-level Low Income Premium Subsidy Amount (LIPSA) for an existing bid that
spans multiple Part D regions is the LIS eligible member-weighted average of the
LIPSAs for each region. This calculation uses the actual June enrollment of the prior
year and accounts for enrollment moved into or out of the bid as part of an official
HPMS crosswalk. For new bids without crosswalk enrollment and spanning multiple
service areas, the amount to be used is the straight average of the LIPSAs for each
region covered in the MA service area. This is in accordance with both section
1860D-14 of the Social Security Act and the final rule “Modification to the Weighting
Methodology Used to Calculate the Low-Income Benchmark Amount,” which was
published in the Federal Register (73 FR 18176) on April 3, 2008.

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WORKSHEET 6
Line 8 – Part D Supplemental Premium
✓ Line 8a – Prior to Rebates

Enter the Part D supplemental premium prior to rebates (found on the separate
Part D BPT) after rounding. This amount must equal the amount on the Part D BPT
(that is, the amount prior to application of any MA rebates). Note: The Part D
supplemental premium prior to rebates must be entered in the MA BPT, even if no MA
rebates are allocated to buy down the Part D supplemental premium. This field is not
applicable to MA-only plans.
If the Part D basic premium is negative, then the Part D supplemental premium must
offset the negative amount. That is, the sum of the Part D basic and supplemental
premiums must be greater than or equal to zero.
✓ Lines 8b and 8c – A/B Rebates Allocated to the Part D Supplemental Premium

Enter the rebates that the MAO wishes to allocate to the Part D supplemental premium.
The Part D rebate allocation must be rounded to one decimal. If this is not done, then
the BPT will round these rebates to one decimal (in line 8c), to comply with withhold
system requirements. This field is not applicable to MA-only plans.
✓ Line 8d – Part D Supplemental Premium

Calculates the Part D supplemental premium net of rebates. Line 8d equals line 8a
minus line 8c. The value must be greater than or equal to zero. This field is not
applicable to MA-only plans (that is, it must be equal to zero in these cases).
The BPT will not finalize if there are any invalid values (such as “#N/A”, “#DIV/0!”,
“#REF!”, “#NAME?”, etc.) in this field.
Line 9 – Total Estimated Plan Premium

The sum of the rounded MA, Part D basic, and Part D supplemental premiums after rebates.
This amount excludes any optional supplemental MA premiums, which are calculated on
Worksheet 7. The value must be greater than or equal to zero.
The BPT will not finalize if there are any invalid values (such as “#N/A”, “#DIV/0!”, “#REF!”,
“#NAME?”, etc.) in this field.
Line 10 – Plan Intention for Target Part D Basic Premium

For MA-PD plans, this field contains a drop-down menu with two options: “Premium amount
displayed in line 7d” or “Low Income Premium Subsidy Amount.” MA-PD sponsors must
choose one of these two options for the target Part D basic premium in the initial June bid
submission and cannot change the chosen target in a subsequent resubmission. CMS will
consider only the option chosen in June as the plan’s intention.
For MA-only plans, the target Part D basic premium is not applicable.
See the “Pricing Considerations” section of these Instructions for more information on the
target Part D basic premium.

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WORKSHEET 6

SECTION IV – CONTACT INFORMATION AND DATE PREPARED
MAOs must identify three persons as the MA plan bid contact, the MA certifying actuary, and
the MA additional actuarial BPT contact. However, the MAO may designate a centralized
mailbox as the “Email Address” for any of the three contacts.
The MA certifying actuary and the MA additional actuarial BPT contact must be readily
available and authorized to discuss the development of the pricing of the bid.
In this section, enter the name, phone number, and email information for all three contacts;
credentials are a required input for the certifying actuary. For the phone number, enter all
ten digits consecutively without parentheses or dashes. Do not leave any part of this section
blank.
Section IV also contains a field labeled “Date Prepared.” This field is populated with a
date/time stamp during the BPT finalization.

SECTION V – WORKING MODEL TEXT BOX
This section contains multiple cells that may be used by bid preparers to enter internal notes—
for example, to facilitate communication between BPT and PBP preparers or to track internal
version schemes.
Section V will be deleted from the finalized file and therefore will not be uploaded to HPMS.
Bid preparers must not enter information in this section meant to be communicated to CMS or
to CMS reviewers, as CMS will not have access to it. Section V will not be deleted from the
working file or the backup file during finalization.

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WORKSHEET 7

MA WORKSHEET 7 – OPTIONAL SUPPLEMENTAL BENEFITS
Worksheet 7 contains the actuarial pricing elements for any optional supplemental benefit
(OSB) packages to be offered during the contract year, up to a maximum of five.
The PBP packages must be entered in the same order as they are entered in the PBP, and the
package name/description must match the PBP.

SECTION I – GENERAL INFORMATION
This section displays the information entered on Worksheet 1, Section I.

SECTION II – OPTIONAL SUPPLEMENTAL PACKAGES
Column b – Package ID

Displays the identification (ID) number to signify which package of optional supplemental
benefits is being priced. The number “1” is used to identify the first package. Sequential
numbers (that is, 2, 3) identify additional packages of optional supplemental benefits. The
package IDs must correspond to the packages enumerated and described in the PBP.
Column c – Description

For each OSB package, enter a description. This description must match the
description/package name entered in the PBP for each package—for example, “Enhanced
Dental,” “Gold Package,” etc. The description field must not be left blank when there is an
optional supplemental package entered.
Column d – Allowed Medical Expense: PMPM

Enter the projected contract year allowed medical expense PMPM for each package.
Column e – Enrollee Cost Sharing: PMPM

Enter the projected enrollee cost sharing PMPM for each package.
Column f – Net PMPM Value

Column f is calculated automatically as the allowed PMPM (column d) minus the cost sharing
PMPM (column e).
Column g – Non-Benefit Expense

Enter the total projected contract year non-benefit expense PMPM for each OSB package
offered.
Column h – Gain/Loss Margin

Enter the total projected contract year gain/loss margin PMPM for each OSB package offered.

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WORKSHEET 7
Column i – Premium

The sum of columns f (medical expenses), g (non-benefit expenses), and h (gain/loss margin).
The premiums are automatically rounded to one decimal to comply with premium withhold
system requirements. Premium values must be greater than zero if an OSB package is offered
and must be equal to zero if an OSB package is not offered.
The BPT will not finalize if there are any invalid values (such as “#N/A”, “#DIV/0!”, “#REF!”,
“#NAME?”, etc.) in this field.
Column j – Projected Member Months

Enter the total projected contract year member months for each OSB package offered.

SECTION III – BASE PERIOD SUMMARY (ENTERED AT THE CONTRACT LEVEL)
This section contains a summary of the actual contract-level base period revenue and expenses.
Note that Section III must be completed in total dollars (not PMPMs), and it must include all
optional supplemental benefit packages that were provided in the base period.

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APPENDIX A

IV. APPENDICES
APPENDIX A – ACTUARIAL CERTIFICATION
GENERAL
CMS requires an actuarial certification to accompany every bid submitted to HPMS. If a
certification is not submitted via the HPMS certification module, the bid will not be considered
for CMS review and approval. Every MA BPT requires a certification. Likewise, every Part D
BPT requires a certification.
A qualified actuary who is a member of the American Academy of Actuaries (MAAA) must
complete the certification. The objective of obtaining an actuarial certification is to place
greater responsibility on the actuary’s professional judgment and to hold that person
accountable for the reasonableness of the assumptions and projections.
Certification Module

The certification module contains the following features:
•
•
•
•
•
•

Standardized required language.
The ability to append free-form text language to the required standardized language.
A summary of key information from the submitted bids.
Links to additional information regarding the bid package such as the PBP, BPT, and
supporting documentation.
The ability to certify multiple bids/contracts.
The ability to print and save the submitted certification.

An initial actuarial certification must be submitted via the HPMS certification module in June.
The actuary must also certify the final bid (that is pending CMS approval) via the certification
module in August following the CMS publication of the Part D national average monthly bid
amount, the Part D base beneficiary premium, the Part D regional low-income premium
subsidy amounts, and the MA regional benchmarks. Actuaries are not required to certify every
intermittent resubmission throughout the bid review process, but they may do so if they wish.
Note that in the event that the PBP changes after the final bid is certified, the bid that is
uploaded into HPMS with the revised PBP must be recertified whether or not the BPT changes.
Material changes to the certification language (after the initial June certification submission)
are not allowed without prior written permission from the CMS Office of the Actuary.
Multiple actuaries may be assigned to one contract to perform the certifications. For example, a
consulting actuary may certify the Part D portion of a bid, while an internal plan staff actuary
may certify the MA portion of the bid. Also, one actuary may certify plan Hxxxx-001, while a
different actuary may certify plan Hxxxx-002. The instructions contained in this appendix must
be followed by all certifying actuaries.
Additional information regarding the actuarial certification process (including technical
instructions for completing the HPMS certification module) will be included in an initial
actuarial certification deadline memorandum released via HPMS.

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APPENDIX A

Detailed instructions regarding how to apply for access to the certification module are released
via an HPMS memorandum regarding consultant access or electronic signature access to
HPMS.
Required Certification Elements

The certification module contains the following information as part of the standardized
language:
•
•

•
•
•
•
•
•
•

The certifying actuary’s name/user ID and the date, stamped when completed.
Declaration that the actuary submitting the certification is a member of the American
Academy of Actuaries (MAAA). As such, the actuary is familiar with the requirements
for preparing Medicare Advantage and Prescription Drug bid submissions and meets the
Academy’s qualification standards for doing so.
The specific contract number, plan ID, and segment ID of the bid(s) being certified.
The contract year of the bid(s) contained in the certification.
Indication of whether the certification applies to the MA bid(s), the PD (Part D) bid(s),
or both.
Attestation that the bid(s) are in compliance with the applicable laws1, rules2,
CY2024 bid instructions, and current CMS guidance.
Attestation that, in accordance with Federal law, the bid(s) are based on the
“average revenue requirements in the payment area for a Medicare
Advantage/Prescription Drug enrollee with a national average risk profile.”
Attestation that the data and assumptions used in the development of the bid(s) are
reasonable for the plan’s benefit package (PBP).
Attestation that the bid(s) were prepared in compliance with the current standards of
practice, as promulgated by the Actuarial Standards Board of the American Academy of
Actuaries3.

1

Social Security Act sections 1851 through 1859; and Social Security Act sections 1860D-1 through 1860D-42.

2

42 CFR Parts 400, 403, 411, 417, 422, and 423.

3

Emphasis is placed on, but not limited to, the following Actuarial Standards of Practice (ASOPs):
• ASOP No. 5, Incurred Health and Disability Claims
• ASOP No. 8, Regulatory Filings for Health Benefits, Accident and Health Insurance, and Entities
Providing Health Benefits (Revised)
• ASOP No. 23, Data Quality
• ASOP No. 25, Credibility Procedures
• ASOP No. 41, Actuarial Communications
• ASOP No. 45, The Use of Health Status Based Risk Adjustment Methodologies

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APPENDIX B

APPENDIX B – SUPPORTING DOCUMENTATION
GENERAL
In addition to the BPT and actuarial certification, MAOs must provide CMS with supporting
documentation for every bid, as described in these Instructions.
Unless otherwise noted, MAOs must upload to HPMS all required supporting documentation at
the time of the initial June bid submission. Additional supporting documentation must be made
available to CMS auditors and reviewers upon request, and for CMS reviewers, within 48 hours
of the request, as required by these Instructions. MAOs must upload supporting documentation
consistent with the final certified bid.
Additional information not listed by number in this appendix may be requested by CMS
reviewers and auditors at any point during bid desk review or a CMS audit.
Supporting documentation requirements apply regardless of the source of the assumption,
whether it was developed by the actuary, the MAO, or a third party. If the actuary relied upon
others for certain bid data and/or assumptions, those individuals are subject to the same
documentation requirements. The actuary must be prepared to produce all substantiation
pertaining to the bid, even if it was prepared by others or is based on reliance.
In preparing supporting documentation, the actuary must consider ASOP No. 41,
Actuarial Communications. In accordance with Section 3.2, “Actuarial Report,” the materials
provided must be written “with sufficient clarity that another actuary qualified in the same
practice area could make an objective appraisal of the reasonableness of the actuary’s work.”
All data submitted as part of the bid process are subject to review and audit by CMS or by any
person or organization that CMS designates. Certifying actuaries and additional MA BPT
actuarial contacts must be available to respond to inquiries from CMS reviewers regarding the
submitted bids.
Supporting documentation must—
•
•
•
•
•
•
•

•
•

Be clearly labeled and easily understood by CMS reviewers.
Explain the rationale for the assumptions, including quantitative support and details,
rather than just provide narrative descriptions of assumptions.
Describe bid-specific variations in addition to the overall pricing assumption or
methodology.
Match the values entered in the current BPT and tie to the PBP.
Include Excel spreadsheets with working formulas, rather than pdf files, and a narrative
explanation of the inputs and the calculations and their components.
Clearly identify if it is related to MA, Part D, or both.
Clearly identify the bid(s) relating to the support. At a minimum, the contract number
and organization name must appear on the first page. Specific plan-segment IDs must
be included where appropriate, such as on the first page, in a separate chart, or as an
attachment.
Include a hard-coded date.
Include the contract-plan ID (or organization name) and brief description in the
beginning of the file name.

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APPENDIX B

Acceptable forms of supporting documentation include, but are not limited to, the following
items:
•
•
•
•
•

Meeting minutes that include comprehensive documentation of discussions related to
bid development.
A complete description of data sources—for example, a report’s official name/title, file
name, the date obtained, a source file, the precise name of any published tables used,
etc.
Intermediate calculations showing each step taken to develop an assumption.
A summary of contractual terms of administrative services arrangements.
A business plan.

Supporting documentation that is not acceptable or that may result in a request for additional
information includes, but is not limited to, the following items:
•
•
•
•
•
•
•
•

Materials that are accessible only through a secure server link that requires a password.
A reference to the supporting documentation for another bid, such as “the same as for
plan Hxxxx-xxx-xxx,” and not the documentation itself. The supporting documentation
for a bid must be self-contained.
Excel spreadsheets with a vague explanation or no explanation of the bid-specific inputs
and calculations.
PDF files with the “copy” function disabled.
A statement that the source of a pricing assumption is “professional judgment” with no
additional explanation of the data points underlying the assumptions, such as supporting
factors, studies, or public information.
“Living worksheets” that are overwritten with current data. Supporting documentation
must include the version of the worksheet that was used in bid preparation.
Information obtained after the bids are submitted.
A statement that a pricing assumption or methodology is assumed acceptable based on
its inclusion in a bid that was approved by CMS in a prior contract year. Data,
assumptions, methodologies, and projections must be determined to be reasonable and
appropriate for the current bid, independent of bid filings in previous years.

SUBMITTING SUPPORTING DOCUMENTATION
Supporting materials must be in electronic format (for example, Microsoft Excel,
Microsoft Word, or Adobe Acrobat) and must be uploaded to HPMS. CMS will not accept
paper copies of supporting documentation.
Note that multiple substantiation files can be submitted to HPMS at one time by using “zip”
files, which compress multiple files into one (.zip file extension). Also note that although one
file can be uploaded to multiple bids in HPMS, documentation must not be uploaded to bids to
which it does not pertain. Similarly, it is not acceptable to upload to multiple bids materials
specific to a Part D plan, an MA bid, or another contract number.
More requirements about the upload of substantiation files are located in HPMS in the “Notes”
section under HPMS Home > (Plan Bids) Bid Submission > CY2024 > (Upload) Substantiation
> Next.

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Cover Sheet

To expedite the bid review process, MAOs must upload a cover sheet that lists all of the
supporting documentation that is uploaded or provided with the bid form. The filename must
include the phrase “cover sheet.” A cover sheet is required for each upload of substantiation.
The cover sheet must include detailed information for each support item—such as the filename
and the location within the file, if applicable—and must clearly identify the bids for which such
support item applies and whether the substantiation is related to MA, Part D, or both.
Note that some documentation requirements apply to every bid (for example, every bid
contains a risk score assumption), while other documentation requirements apply only to bids
that contain certain assumptions (for example, manual rate documentation applies only if a
bid’s projection is based on manual rates). For documentation categories that apply to a subset
of bids that contain a specified assumption, the cover sheet must not refer to a range of contract
number-plan ID-segment ID (such as “plans 001 – 030” or “all plans under contract Hxxxx”).
For these items, the cover sheet must contain the exact contract number-plan ID-segment IDs to
which the documentation applies.
For subsequent substantiation uploads, the cover sheet must summarize the additional
documents uploaded at that time (that is, the initial cover sheet must not be maintained as a
cumulative list). The subsequent cover sheets must also contain the exact contract numberplan ID-segment IDs rather than a range of contract number-plan ID-segment IDs.
Sample check lists and cover sheets for the initial June bid submission, and for subsequent
substantiation uploads, are provided at the end of this appendix.
Timing

MAOs and certifying actuaries must prepare all supporting documentation at the time of the
initial June bid submission so that it is immediately available to CMS and reviewers at the time
of that submission or readily available upon request as explained below.
•
•
•

The “Initial June Bid Submission” section of Appendix B describes supporting
documentation materials that MAOs must upload to HPMS with that submission.
The “Upon Request by CMS Reviewers” section of Appendix B describes materials that
MAOs and certifying actuaries must provide within 48 hours of request by CMS
reviewers.
When a BPT is resubmitted, the MAO must upload to HPMS a summary of changes,
including the cause and effect of each revision authorized by CMS or CMS reviewers,
or proposed by the MAO for rebate reallocation.
◦ If a BPT is resubmitted for rebate reallocation, CMS expects the upload of the
summary of changes to occur by the end of the rebate reallocation period, but not
later than prior to the final actuarial certification. For all other BPT resubmissions,
such upload must occur when the BPT is resubmitted.
◦ If multiple BPTs are resubmitted at the same time, the summary of changes must
include a mapping of specific bid changes to contract number-plan ID-segment IDs.
◦ Sample BPTs are not to be uploaded to HPMS.

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•

Prior to the final actuarial certification,—
◦ MAOs and certifying actuaries must revise supporting documentation consistent
with the final certified bid. This includes additional information or materials
provided during bid review to support the bid.
◦ CMS expects revised supporting documentation to have the same file name as the
original substantiation file except for a different date or a word such as “revised.”

Initial June Bid Submission

The following documentation requirements apply to all bids (as all bids contain these
assumptions):
1. A cover sheet outlining the documentation files, as described above.
2. A product narrative that offers relevant information about plan design, the product
positioning in the market (such as high/low), enrollment shifts, changes in service area, type
of coverage, contractual arrangements, marketing approach, and any other pertinent
information that would help expedite the bid review. For dual-eligible SNPs, include a
statement indicating how the plan conforms to state and territorial Medicaid regulations for
benefits, cost sharing, care management, and margins.
3. A document titled “Related-Party Declaration” that states whether or not the MAO is in a
related-party arrangement in the base period and/or the projection period.
4. Support for the effect of sequestration on the bid, including a detailed qualitative and
quantitative description of how sequestration is reflected in pricing assumptions.
5. Support for the claims credibility assumptions (Worksheet 2), including—
5.1.

A statement of the credibility methodology used—for example, the CMS guidelines.

5.2.

An actuarial report of the credibility procedure used if it varies from the CMS
guidelines.

6. A detailed description of the process used for adjusting cost sharing due to maximum OOP
limits, including how the PMPM impact of the maximum OOP was determined.
(Worksheet 3).
7. Support for non-benefit expense assumptions (Worksheets 1 and 4). The required elements
include—
7.1.

A reconciliation of the base period non-benefit expenses reported in Worksheet 1 of
the BPT to auditable material such as corporate financials and bid-level operational
data.

7.2.

A description of the expenses included in each non-benefit expense category in the
BPT.
7.2.1. For the “Net Cost of Private Reinsurance” category, disclose whether or not
there is reinsurance. For reinsurance, even if the net cost of private
reinsurance is entered as $0, the required elements include the type of
reinsurance and applicable benefits, attachments points, maximums, ceding
commissions, and other information pertinent to the reinsurance coverage.

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7.3.

Detailed support for the development of projected non-benefit expenses. The
required elements include—
7.3.1. A description of the methodology used to develop non-benefit expenses.
7.3.2. An analysis that demonstrates the development of each line item using
relevant data, assumptions, contracts, financial information, business plans
and other experience.
7.3.3. A description of the relationship between the non-benefit expense line items
entered in the BPT and auditable material such as corporate financials and
plan-level operational data.

8. Justification of the MA gain/loss margin (Worksheet 4). The required elements include—
8.1.

Disclosure of the aggregate MA gain/loss margin at the time of the initial bid
submission.

8.2.

Support for the aggregate MA gain/loss margin if the aggregate MA gain/loss margin
is below 0 percent or above 5.5 percent. The required elements include—
8.2.1. A description of the reasons supporting the aggregate MA gain/loss margin.
8.2.2. An aggregate-margin numeric (non-PDF) business plan showing the current
bid submission and next year’s submission. The required elements include—
a. Projected member months, risk scores, CMS revenue, MA premium,
Medicare-covered benefit and A/B mandatory supplemental benefit
medical expenses, non-benefit expenses, and gain/loss margin.
b. Projected gain/loss margin as a percentage of revenue from the previous
year’s business plan(s), if applicable.

8.3.

A demonstration of consistency between the projected and the actual aggregate MA
gain/loss margins as a percentage of revenue over the long term. Include an
explanation of how that knowledge was incorporated into the current bid submission,
if the gain/loss margins have been inconsistent historically.

8.4.

A detailed justification of the need for flexibility in the gain/loss margin
requirements in order to satisfy other CMS instructions such as TBC.

8.5.

Support for how the aggregate MA gain/loss margin does not jeopardize financial
solvency, if the aggregate MA gain/loss margin is negative. Quantify the projected
aggregate loss and demonstrate numerically that this loss does not jeopardize
financial solvency.

8.6.

Justification of benefit value in relation to the gain/loss margin, if the gain/loss
margin at the bid level is greater than 11.5 percent of revenue. The required elements
include—
8.6.1. A comparison of premiums for CY2024 and CY2023, if applicable. Include
the rounded MA premium, Part D basic premium after MA rebates, Part D
supplemental premium after MA rebates, total plan premium, and MA rebate
allocation for the Part B premium.

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8.6.2. Support for changes in A/B mandatory supplemental benefits, if applicable.
Provide a comparison in an Excel spreadsheet of (i) data from Worksheet 4,
Section IIC, column R, lines a through u in the BPT, and (ii) the best estimate
of the same items changing only the A/B mandatory supplemental benefits to
be identical to CY2023.
9. Detailed support for the development of projected risk scores (Worksheet 5). The required
elements include—
9.1.

A detailed description, and corresponding numerical demonstration, of the
methodology used to develop projected CY2024 MA risk scores.

9.2.

A description of, and the rationale for choosing, the source data for the development
of the projected CY2024 MA risk scores, including—
9.2.1. Identification of the source of the starting risk score and, if the CMS-provided
risk scores are not used, an explanation of why the alternative source was
appropriate.
9.2.2. For an alternative approach, identification of the years used, the population
incorporated, and any data points used as a basis for developing the CY2024
risk score.

9.3.

A description of the methodology used to derive each projection factor, including—
9.3.1. A summary of the consideration for using or not using the projection factor, a
description of and the rationale for choosing the source data, and the data
points used in the derivation of the projection factor.
9.3.2. For the bid-specific coding trend, a statement about the risk score years
utilized, the number of years used and whether the scores are normalized or
raw.

9.4.

A statement about the consistency between the development of the projected risk
scores for the bid population and the development of projected medical expenses.

9.5.

For an alternate approach, a demonstration that the method used is consistent with
the preferred development approach in these Instructions, including an explanation of
why such approach is more appropriate than the CMS preferred approach.

9.6.

A statement of the credibility approach used—for example, the CMS guidelines.

9.7.

A description of the credibility methodology used if it varies from the CMS
guidelines.

The following documentation requirements apply to all bids that contain these specified
assumptions:
10. Support for the development of the base period data (Worksheet 1).
10.1. Detailed qualitative and quantitative support for the development of the base period
experience. This documentation, which is based on regulatory authority for the
review of materials that pertain to any aspect of services provided, is also required in
cases in which medical services are provided under a capitated arrangement. The
required elements include—

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10.1.1. A description of the allocation of allowed costs by service category when the
allocation method is not based on bid experience data.
10.1.2. Information regarding the base period member months, if more than eight
bids constitute the base period experience.
10.1.3. Justification for the lack of encounter data for services provided under
capitated arrangements including—
a. An explanation for the deficiency.
b. A detailed description of the steps that the MAO has taken or is taking to
obtain encounter data for subsequent year’s bid submissions.
c. A description of the data source for utilization per 1,000 and the basis for
any adjustments.
10.1.4. For Part B Rx, the PMPM value of prescription drug rebates attributable to
Part B Rx benefits.
10.2. Reconciliation of base period experience to the MAO’s auditable material such as
corporate financials and bid-level operational data. The data are to be reported on an
incurred basis, including claims paid, unloaded claim reserves, non-benefit expenses,
and revenues.
10.3. Crosswalk information regarding data aggregation. See the sample format at the end
of Appendix B. The required elements include—
10.3.1. A list of all bids that are involved in approved crosswalks for CY2023 and
proposed crosswalks for CY2024 that are considered for base period data
aggregation.
10.3.2. A statement of the intention to submit a crosswalk exception for CY2024, if
applicable.
10.3.3. The rationale for determining the level of significance. A detailed calculation
of the proportion of members crosswalked to the contract number-plan IDsegment ID from others bid(s) listed on Worksheet 1, Section II, line 5, Plans
in Base, for example, numerical components of the numerator and the
denominator.
11. Detailed qualitative and quantitative support for the development of each projection factor
or adjustment (Worksheet 1). The required elements include—
11.1. A description of the source data, including the data’s relevance to the MA bid.
11.2. A summary of the MAO’s historical trends including—
11.2.1. The percentage trends.
11.2.2. A description of the methodology used to analyze the data.
11.2.3. The numeric calculations.
11.3. Any applicable adjustments to the source data, such as considerations for—
11.3.1. The MAO’s experience.

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11.3.2. Industry and/or internal studies.
11.3.3. Benefit design analysis.
11.3.4. A change in the mix of services, including the rationale for the type of
projection factor used to reflect such change.
11.3.5. A change in the mix of provider arrangements such as capitated and risk
sharing arrangements.
11.3.6. Bid-specific circumstances.
11.4. Justification for combining data for multiple service categories.
12. Detailed support for the data and methodology used in the development of appropriate
manual rates for the expected population (Worksheet 2). The required elements include—
12.1. A description of the source data, including, but not limited to, the data’s relevance to
the MA bid, incurred dates, and the exposure (expressed in member months) that was
used to develop the manual rate.
12.2. An analysis justifying the reasonableness of the MA manual rate, if it is based on
experience of less than 24,000 member months of exposure.
12.3. Techniques and factors used to reflect differences between—
12.3.1. The underlying population and that expected of the MA bid.
12.3.2. The source data and the MA bid in areas including, but not limited to,
benefits and the delivery of health care.
12.4. Data and methodology used to project the data from the incurred period to CY2024.
12.5. All other applicable factors and/or adjustments. Include considerations for the
allocation of projected allowed costs by service category.
13. An MAO in a related-party arrangement must provide the following:
13.1. Declaration of every related-party arrangement in the base period and projection
period.
13.2. Disclosure of all services provided in every related-party arrangement in the base
period and projection period.
13.3. A summary that explains the relationship of the parties involved and common
ownership, control, and investment in the base period and projection period.
13.4. If the ratio of the related-party expenses (Worksheet 4 cell M104 plus Worksheet 4
cell M105) to the total allowed cost plus total non-benefit expenses (Worksheet 2 cell
O38 plus Worksheet 4 cell H106) is greater than 30 percent, provide a summary of
the contractual terms for the five largest related parties declared in the projection
period, including a description of the services provided and money exchanged. The
five largest related party relationships are to be determined by their share in the total
related-party expenses (Worksheet 4 cells M104 and M105).

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13.5. If the ratio of the related-party expenses (Worksheet 4 cell M104 plus Worksheet 4
cell M105) to the total allowed cost plus total non-benefit expenses (Worksheet 2 cell
O38 plus Worksheet 4 cell H106) is greater than 30 percent, provide items 13.5.1 and
13.5.2 for the five largest related parties declared in the projection period. The five
largest related-party relationships are to be determined by their share in the total
related-party expenses (Worksheet 4 cells M104 and M105).
13.5.1. The PMPM cost of services or benefits consistent with the contractual
arrangement and the number of member months eligible for each contract,
and
13.5.2. A comparison for each contractual arrangement to the cost of the services or
benefits in the absence of a related party or to actual cost. Acceptable forms
of comparison are as follows:
a. Market Comparison for Administrative Services
Demonstrate through analysis and contract terms, how the fees
associated with the MAO’s related-party arrangement are comparable to
the fees for providing similar services in an administrative arrangement
between the following entities:
◦ The MAO and an unrelated party, or
◦ The related-party organization and an unrelated party.
To meet this requirement, the MAO must demonstrate at the time of bid
submission that—
◦
◦
◦

The contract with the unrelated party is associated with sufficient
costs of services to be considered a valid contract.
The fees associated with such arrangements are within 5 percent.
For a related-party administrative arrangement between the
related-party organization and an unrelated party, provide a
signed attestation from the related party stating that the actual
contract will be available for review upon request by CMS.

b. Actual Cost Comparison for Administrative Services
Show the actual cost of the non-benefit services provided by the related
party, excluding the gain/loss margin of the related party, compared to
the cost in the bid, and provide a qualitative and quantitative summary of
the development of the related party’s expenses to provide the
administrative services.
c. Alternative Comparison for Administrative Services
If the MAO is not able to meet the requirements of 13.5.2a or 13.5.2b,
the MAO must show a comparison for administrative services as
outlined in 13.5.2a even if the fees associated with the arrangement are
not within 5 percent of the comparison.

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d. Market Comparison for Medical Services
Either demonstrate through analysis and contract terms, that the fee
associated with each service category in the MAO’s related-party
arrangement is comparable to the fee for providing the same service to a
Medicare population in a medical arrangement between the following
entities:
◦ The related-party organization and an unrelated entity with an
arrangement that covers Medicare beneficiaries, or
◦ The MAO and an unrelated party in the bid’s service area.
- Global capitation arrangements that are contracted as a
percentage of revenue may be compared across different
service areas.
To meet this requirement, the MAO must demonstrate at the time of bid
submission that—
◦ The contract with the unrelated party is associated with sufficient
costs of services to be considered a valid comparison.
◦ The service categories included in the unrelated-party
arrangement must be similar to the service categories in the
related-party arrangement.
- Global capitation arrangements are considered to be
sufficiently similar even when there are some minor
differences as long as the MAO is able to demonstrate
through analysis that the fees are comparable.
◦ The fees associated with such arrangements are within 5 percent
or $2 PMPM—whichever is greater.
◦ For a related-party medical arrangement between the relatedparty organization and an unrelated entity, provide a signed
attestation from the related party stating that the actual contract
will be available for review upon request by CMS.
Or demonstrate by pricing the utilization of the related party through the
unrelated-party arrangement that the financial results are comparable for
a Medicare population in a medical arrangement between the following
entities:
◦ The related-party organization and an unrelated entity with an
arrangement that covers Medicare beneficiaries, or
◦ The MAO and an unrelated party in the bid’s service area.
To meet this requirement, the MAO must demonstrate at the time of bid
submission that—
◦
◦

The contract with the unrelated party is associated with sufficient
costs of services to be considered a valid comparison.
The service categories included in the unrelated-party
arrangement must be similar to the service categories in the
related-party arrangement.

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◦
◦
◦

The utilization being priced either is aggregated for all the bids
that utilize the related-party agreement or is compared at the bid
level.
The results of pricing the utilization associated with such
arrangements are within 5 percent or $2 PMPM—whichever is
greater.
For a related-party medical arrangement between the relatedparty organization and an unrelated entity, provide a signed
attestation from the related party stating that the actual contract
will be available for review upon request by CMS.

e. Fee-For-Service Comparison for Medical Services
Either demonstrate at the time of bid submission that the fees associated
with the related-party arrangement are comparable to 100 percent FFS
costs, that is, within 5 percent or $2 PMPM—whichever is greater, or
Demonstrate by pricing the utilization of the related party through the
FFS fee schedules that the financial results are comparable to the FFS
reimbursements, that is, within 5 percent or $2 PMPM—whichever is
greater.
To meet this requirement, the MAO must demonstrate at the time of bid
submission that the utilization being priced either is aggregated for all
the bids that utilize the related-party agreement or is compared at the bid
level.
f. Actual Cost Comparison for Medical Services
Show the actual cost of the related party to provide the medical services,
excluding the gain/loss margin of the related party, compared to the cost
in the bid, and provide a qualitative and quantitative summary of the
development of the related party’s expenses to provide the medical
services.
g. Alternative Comparison for Medical Services
If the MAO is not able to meet the requirements of 13.5.2d through
13.5.2f, the MAO must show a comparison for medical services as
outlined in 13.5.2d or 13.5.2e, even if the fees associated with the
arrangements are not within 5 percent or $2 PMPM of the comparison.
14. The input sheet(s) for the pricing model used in the development of the bid.
15. An explanation of and detailed support for how CY2023 bid audit findings and compliance
issues were corrected in the current bid for the same plan. To the extent that an issue applies
to other bids in the same contract or parent organization, the documentation for the audited
bids must describe how the bids for all plans are treated consistently regarding that issue.
16. Support for reliance on information supplied by others that—
16.1. Identifies the source(s) of the information—for example, name, position, company,
date;

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16.2. Identifies the information relied upon;
16.3. States the extent of the reliance—for example, whether or not checks as to
reasonableness have been applied; and
16.4. Indicates to which bid(s) the reliance information applies.
See the sample format at the end of this appendix.
17. Detailed qualitative and quantitative support for the development of the components of
pricing assumptions pertaining to the MAO’s participation in the Medicare Advantage
Value-Based Insurance Design (MA-VBID-C and/or MA-VBID-H) model(s), including an
explanation for and a demonstration of the VBID pricing by VBID intervention for each
applicable BPT value.
18. Support for the development of DE# and non-DE# bid values. The required elements
include—
18.1. Support for the allocation of enrollment between DE# and non-DE# beneficiaries
including the basis for classifying dual-eligible enrollees as DE# (Worksheets 1
and 5).
18.2. Support for DE# and non-DE# projected allowed costs (Worksheet 2).
18.3. Support for zero projected DE# member months when there are DE# members in the
base period (Worksheet 5).
19. Support for claim costs for hospice enrollees for mandatory supplemental benefits when
these costs are included in the projected allowed cost PMPM.
20. The rationale for entering in the BPT a projected cost of zero (0) for a benefit in the PBP.
The required elements for each benefit include—
20.1. The applicable contract number-plan ID-segment-ID.
20.2. Medicare-covered or non-covered services, as applicable.
20.3. The source data.
20.4. An explicit statement that the projected cost for the contract year equals zero
(or “essentially zero”.)
(Detailed support for the pricing of non-covered services is available upon request.)
21. Support, at the benefit level, for non-covered services (Worksheet 2, lines l through q,
column o), if any, including a breakdown of the PMPM value shown in the BPT. For
example, a $4.00 PMPM in column o of row p, “Suppl. Ben. Chpt 4 (Non-Covered),” is to
be shown in the supporting documentation as $1.50 PMPM for a smoking and tobacco
cessation counseling and $2.50 PMPM for medical nutrition therapy. (Detailed support for
the pricing of non-covered services is available upon request.)
22. Support for the development of projected cost sharing (Worksheet 3). The required
elements include—
22.1. A detailed demonstration of how coinsurance or copayments, for which CMS does
not have an established amount (for example, coinsurance for inpatient hospital
services or copayments for durable medical equipment), satisfy CMS service
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category requirements. The MAO must upload this demonstration under the Upload
section of HPMS using the Cost-Sharing Justification link.
22.2. The determination of the PMPM impact of deductibles.
23. Support for a global capitation arrangement or risk sharing arrangement. The required
elements include—
23.1. A description of the arrangement.
23.2. A demonstration of the methodology used to allocate the impact of the arrangement
to BPT service categories (including the allocation to the MA and Part D BPTs, if the
arrangement applies to Part D services)
24. Support for the “Development of the Projected Contract Year ESRD ‘Subsidy’ ”
(Worksheet 4). This required documentation includes the following:
24.1. Base period (for example, 2022) revenues and medical expenditures for
Medicare-covered benefits provided to enrollees in ESRD status.
24.2. The source for, and the development process of, any manual rates used.
24.3. Relevant base-to-contract year trend factors.
24.4. A statement of the credibility approach used—for example, the CMS guidelines.
24.5. A description of the credibility methodology used if it varies from the CMS
guidelines.
25. Detailed support for the MSP adjustment, including justification for a zero amount.
(Worksheet 5).
26. Support for the development of plan-provided ISAR factors (Worksheet 5), if used. (This
requirement applies to regional PPOs only.) A description of the methodology and data
source(s) used to calculate the ISAR factor(s) must be included. The factors must reflect the
requirements for medical expense, non-benefit expense, and gain/loss margin. Additionally,
the support must illustrate the county-level medical costs (such as unit costs and/or
utilization) and retention (that is, non-benefit expense and gain/loss margin) that were
assumed in the development of the factors.
27. Support for the projected medical expense, projected non-benefit expense, and projected
gain/loss margin for specific optional supplemental benefit packages (Worksheet 7).
28. Support for actuarial swapping/equivalence customization for employer/union groups
enrolled in individual-market plans (Worksheet 1).
29. Detailed support for cost-sharing utilization assumptions (Worksheet 3).
30. – 33. For future use
Upon Request by CMS Reviewers

It is not required that the items below be uploaded with the initial June bid submission, but they
must be prepared at that time in order to be readily available for CMS reviewers upon request.
If substantiation is requested by CMS reviewers, it must be provided by the certifying actuary
or additional MA BPT contact within 48 hours. These materials will be reviewed at audit:

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34. Support for how the pricing of the bid is not anti-competitive, including a comparison of the
bid benefits and premium to the benefits and premiums of competitors.
35. Copies of related-party contracts.
36. A letter supporting any information upon which the certifying actuary relied, if applicable.
This letter must be signed by the person (source) who provided the information.
37. An explanation of how certain findings from the Office of Financial Management (OFM)
audit were addressed in the current bid.
38. Justification of benefit value in relation to the gain/loss margin, if the gain/loss margin at
the bid level is less than or equal to 11.5 percent of revenue. The required elements include
the elements listed in 8.6.
39. For the projected bid values listed below, an analysis of the relationship between bid-level
actual and projected experience for CY2019, CY2020 and CY2022, including an
explanation of how that knowledge was incorporated into the current bid submission.
39.1. Total Non-benefit Expense, Worksheet 4, cell H106
39.2. Total Allowed PMPM, Worksheet 2, cell O38.
39.3. Total Weighted Avg Risk Factor, Worksheet 5, cell E15.
40. For an MA-PD plan, if the MA and Part D enrollment differ after taking into account
hospice and ESRD enrollees, justification that base period and projected enrollment in the
corresponding MA and Part D bids reflect the same underlying population.
(Worksheets 1 and 5)
41. Support for the pricing of non-covered services, including utilization and unit cost
(Worksheet 2, lines l through r, column o). (Support at the benefit level is required in the
initial June bid submission.)
42. Support for the allocation of allowed costs and cost sharing between Medicare-covered and
A/B mandatory supplemental benefits (Worksheet 4).
43. Support for when the formulas provided in the BPT for DE# plan cost sharing
(Worksheet 4, Section IIB, column f) are overwritten at the discretion of the certifying
actuary.
44. Support for the calculation of “Medicaid Cost Sharing” (Worksheet 4, Section IIB,
column k), including cost sharing required by state or territory Medicaid programs in the
bid’s service area based on the eligibility rules for subsidized cost sharing for
DE# beneficiaries.
45. Support that changes in PMPM bid values as a result of rebate reallocation are consistent
with the pricing approach and methodologies used in the initial June bid submission.
46. Justification for changes in DE# plan reimbursement, including the derivation of the revised
plan reimbursement PMPMs in Worksheet 4, column h.
47. For the Low-Income Premium Subsidy Amount (LIPSA) plan intention for the target
Part D basic premium option, support for the LIPSA estimate in Worksheet 6,
Subsection C, line 7d, including historical data.

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SAMPLE SUPPORTING DOCUMENTATION
MA Checklists for Required Supporting Documentation
Initial June Bid Submission – Required for All Bids
1 Cover sheet
2 Product narrative
3 Related-party declaration
4 Sequestration
5 Claims credibility assumption
6 Adjustment to cost sharing for maximum OOP limit
7 Non-benefit expenses
8 Gain/loss margin
9 Projected risk scores

Initial June Bid Submission – Required for All Bids with Specified Assumptions
10 Base period data
11 Projection factors
12 Manual rates
13 Related-party arrangements
14 Input sheets for pricing model
15 Bid audit results and compliance issues
16 Reliance information
17 VBID
18 DE# and non-DE#
19 Hospice claims costs for mandatory supplemental benefits
20 Zero projected benefit cost
21 Non-covered services benefit-level summary
22 Cost sharing
23 Global capitation or risk sharing arrangement
24 ESRD “subsidy”
25 MSP adjustment
26 ISAR factors
27 Optional supplemental benefit (OSB)
28 Employer or union groups actuarial swapping/equivalence
29 Cost-sharing utilization
Upon Request by CMS Reviewers
34 Bid not anti-competitive
35 Related-party contracts
36 Reliance letter

CY2024 MA BPT Instructions

Page 102 of 147

APPENDIX B

37 OFM audit results
38 Benefit value/margin
39 Actual to Projected
40 MA-PD enrollment
41 Non-covered services pricing
42 Allocation of allowed costs/cost sharing to Medicare-covered and non-covered services
43 DE# plan cost sharing override
44 State and territory cost sharing requirements
45 Rebate reallocation pricing
46 DE# plan reimbursement
47 LIPSA target

CY2024 MA BPT Instructions

Page 103 of 147

APPENDIX B
SAMPLE MA Cover Sheets
MA Cover Sheet #1 - CY2024 Initial Bid Submission

Organization Name: Health One
Contract(s): Hxxxx and Hyyyy
Date: June 6, 2023
Documentation
Requirement
1 Cover sheet

Specific
Bid(s)
All bids

1-9

All bids

3 Related-Party
declaration
6 Cost sharing
mapping

Hyyyy

7 Non-benefit
expenses

All bids

8 Gain/loss
margins

All bids

9 Risk scores

All bids

12 Manual rates

Hxxxx

12 Manual rates

Hxxxx

13 Related-Party

Hyyyy

24 ESRD
subsidy

Hxxxx-001
Hxxxx-004

All bids

CY2024 MA BPT Instructions

File Name
1 Cover Sheet HealthOne
Hxxxx Hyyyy 6-62023.xlsx
Pricing Memo HealthOne
Hxxxx, Hyyyy 6-6-2023.pdf
3 Related Party Declaration
Hyyyy 6-6-2023.pdf
1 Cover Sheet HealthOne
Hxxxx Hyyyy 6-62023.xlsx
1 Cover Sheet HealthOne
Hxxxx Hyyyy 6-62023.xlsx
1 Cover Sheet HealthOne
Hxxxx Hyyyy 6-62023.xlsx
1 Cover Sheet HealthOne
Hxxxx Hyyyy 6-62023.xlsx
Pricing Memo HealthOne
Hxxxx, Hyyyy 6-6-2023.pdf
1 Cover Sheet HealthOne
Hxxxx Hyyyy 6-62023.xlsx
Pricing Memo HealthOne
Hxxxx, Hyyyy 6-6-2023.pdf
1 Cover Sheet HealthOne
Hxxxx Hyyyy 6-62023.xlsx

Location within
File
1 Cover sheet

MA, PD
or Both
Both

MA #1 - #9
PD #1 - #9
N/A

Both

6.1 WS3 Mapping

MA

7.1 NBE

Both

8.1, 8.2, 8.3 Margin

Both

9.1 MA RS
9.2 PD RS

Both

MA #12
PD #12
12.1 MA Manual
12.2 PD Manual

Both

MA #13
PD #13
24 ESRD

Both

Both

Both

MA

Page 104 of 147

APPENDIX B
MA Cover Sheet #2 - CY2024 Subsequent Bid Submission

Organization Name: Health One
Contract(s): Hxxxx, Hyyyy, and Szzzz
Date: July 13, 2023
Documentation Specific
Requirement
Bid(s)
1 Cover sheet Hxxxx,
Hyyyy
8 Gain/loss
Hxxxx
margins
Hyyyy
12 Manual
Hxxxx-003
rates

File Name
1 Cover Sheet HealthOne Hxxxx
Hyyyy Revised 7-13-2023.xlsx
8 HealthOne AdminProfit Revised
07-13-2023.xlsx
1 Cover Sheet HealthOne Hxxxx
Hyyyy Revised 7-13-2023.xlsx

Location
within File
N/A

MA, PD
or Both
Both

8.1, 8.2, 8.3
Margin
12.1 MA
Manual

Both
MA

SAMPLE Reliance on Information Supplied by Others

MA, PD
Bid
or Both
Hxxxx- Both
002
Hxxxx- Both
002

Source
(Name, Position,
Company)
Joe Smith,
Director of Finance,
ABC Health Plan
Jane Doe,
Medicare Analyst,
ABC Health Plan

CY2024 MA BPT Instructions

Type of
Information
Comments
Administrative
expenses,
gain/loss margin
Claim modeling, I have not performed any independent
risk score
audit or otherwise verified the
accuracy of these data or information.

Page 105 of 147

APPENDIX B
Crosswalk Supporting Documentation

Bid:

Hxxxx-001

Significance Level (for all bids):

30%

Determination of the Level of Significance:
[Describe the determination of the level of significance used as a threshold for reporting
aggregated period experience.]
CY 2023 WK1 Reporting for:

(c)
CY2020
CY2020 Total
Bid
MMs
Hxxxx001
3,000
Hxxxx002
500,000

Hxxxx-001

Member Months (MMs)
(d)
Include
# Cross(e)
(f)
(g)
CY2020 Base
walked from # Removed # Remaining % Remaining Period Data
CY2020 Bid
from
in Reporting in Reporting
CY2023
to Reporting Reporting
Bid
Bid
Reporting Bid
Bid
Bid
(d-e)
(f/c)
(WK1)
—

2,500

N/A

N/A

Yes

10,000

—

10,000

2.0%

No

Hxxxx003

200

150

80

70

35.0%

Yes

Hxxxx004

6,000

3,000

—

3,000

50.0%

Yes

Hxxxx005

6,000

1,000

—

1,000

16.7%

No

CY2024 MA BPT Instructions

Relevant
Crosswalk
N/A
Ongoing bid
Plan 001:
CY2022 SAE
Plan 001:
CY2022 SAE;
Intend to file
CY2023 SAR
Crosswalk
Exception
Request
Plan 001: Intend
to file CY2023
SAE Crosswalk
Exception
Request
Plan 001: Intend
to file CY2023
SAE Crosswalk
Exception
Request

Page 106 of 147

APPENDIX C

APPENDIX C – PART B-ONLY ENROLLEES
This appendix includes bid requirements for plans that cover only enrollees eligible for
Medicare Part B. A regional PPO plan must cover enrollees eligible for both Medicare Part A
and Part B.
Medicare beneficiaries with Medicare coverage only under Part B have not been allowed to
elect an MA plan since December 31, 1998 (unless they were members of employer or union
groups).
However, Medicare beneficiaries (with Part B coverage under Medicare) who were Medicare
enrollees of a Section 1876 contractor on December 31, 1998 were considered to be enrolled
with that organization on January 1, 1999 if the organization had an MA contract for providing
benefits on the latter date. Health benefit coverage that MAOs provide to such remaining
Part B-only enrollees constitutes a separate MA plan (which requires a separate bid
submission).
CMS encourages MAOs to submit as few plans as possible for their pre-1999 Part B-only
members, rather than duplicating each of their A/B plans. In fact, an MAO can submit one plan
for all its pre-1999 Part B-only members under an MA contract if the members are in the same
type of plan. In addition, if the plan is offering the pre-1999 Part B-only members the same
benefits at the same price as the benefits offered to A/B members (that is, those eligible for
both Part A and Part B of Medicare), the MAO is not required to submit a separate bid for the
Part B-only members.
MAOs are to prepare Part B-only bids in much the same way that they prepared for Part A/B
members. For Part B-only plans, MAOs must give special consideration to allocating the
portion of services that are considered to be Medicare-covered (Worksheet 4, Section II,
columns i and j):
•
•

•

The Medicare-covered proportion of inpatient services (line a) must equal zero
(0) percent.
While the majority of Medicare expenditures for skilled nursing facilities (SNFs) are
covered under Part A (Hospital Insurance), in certain circumstances benefits are
covered under Part B (Supplementary Medical Insurance). Guidance on these covered
services can be found in Section 70 of Chapter 8 of the Medicare Benefit Policy Manual
at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Internet-OnlyManuals-IOMs-Items/CMS012673.html. We estimate that about 5 percent of Medicare
expenditures for SNFs will be covered under Part B.
Also, as is stated in Section 60.3 of Chapter 7 of the Medicare Benefit Policy Manual, if
a beneficiary is enrolled only in Part B and is qualified for the Medicare home health
benefit, then all of the home health services are financed under Part B. Thus, for most
Part B-only plans, the Medicare-covered proportion of home health services (line c) will
be 100 percent.

CY2024 MA BPT Instructions

Page 107 of 147

APPENDIX D

APPENDIX D – MEDICARE ADVANTAGE PLANS AVAILABLE TO
EMPLOYER/UNION GROUPS
INDIVIDUAL-MARKET PLANS (“MIXED ENROLLMENT” PLANS)
An MAO may offer its individual-market MA plans to employer/union group health plan
sponsors and modify benefits for specific employer/union groups through two types of
allowable customization: “actuarial swapping” or “actuarial equivalence.”
Actuarial Swapping

If an MAO requests the actuarial swapping category of customization, the MAO must
identify in the supporting documentation both the benefits that might be swapped during
negotiations with employers and/or unions and the MA plan covering those benefits.
Only supplemental benefits not covered under original Medicare are eligible for
actuarial swapping, and only those benefits in your bids that are candidates for swaps
need to be identified. Part D supplemental benefits and supplemental benefit flexibilities
available under the Value-Based Insurance Design (VBID) Model are not eligible for
actuarial swapping. The MAO may make specific swaps in negotiations with employers
or unions in the context of the CMS general approval of the candidates, without
obtaining further approval from CMS for the actual swaps.
Actuarial Equivalence

If an MAO requests the actuarial equivalence category of customization allowable for
employer and union groups, the MAO must provide the following information as
supporting documentation:
•
•
•

The proposed change in cost-sharing amounts and the MA plan containing such cost
sharing.
Any modification to the premium charged.
Any improvement in the benefit related to the changed cost sharing.

Unlike the actuarial swapping flexibility, this customization may apply to both covered
and non-covered Medicare benefits.
An MAO must retain in its files, but not upload to HPMS, a package of documents with
computations supporting the proposed changes under these two types of allowable
customization.
For more information on employer/union group sponsorship of individual MA plans, see
Chapter 9 of the Medicare Managed Care Manual (MMCM) at https://www.cms.gov/
Regulations-and-Guidance/Guidance/Manuals/Internet-Only-Manuals-IOMsItems/CMS019326.

CY2024 MA BPT Instructions

Page 108 of 147

APPENDIX E

APPENDIX E – REBATE REALLOCATION AND PREMIUM ROUNDING
MAOs may resubmit bids during the rebate reallocation period in order to reallocate MA rebate
dollars for certain bids and, in most cases, return to the target Part D basic premium. CMS will
announce the exact dates of the rebate reallocation period when the MA benchmarks and the
Part D benchmarks (that is, the Part D national average monthly bid amount, the Part D base
beneficiary premium, and the Part D regional low-income premium subsidy amounts) are
released. Consequently, rebate reallocation is required for some MA bids, is permitted (but not
required) for others, and is not permitted for certain bids, as indicated in this appendix.
Note that in order to satisfy all CMS rebate reallocation requirements, it may not be possible
for the MAO to return to the total estimated plan premium prior to rebate reallocation. Rebate
reallocation is only an opportunity to return to the target Part D basic premium, subject to these
Instructions, and to reflect the published MA regional benchmarks in the BPT.
Rebate reallocation may involve minimal benefit changes as discussed in the section III in
Changes Allowed to Funding of the A/B Mandatory Supplemental Benefits in order to fully
reallocate rebates. In such case, revisions to MA pricing assumptions for the incremental
change in benefits and the associated impact on other pricing assumptions, as described in this
appendix, are permitted only for the bids involved in rebate reallocation. Note that this step,
which may include a minor change in gain/loss margin to satisfy TBC evaluations, is separate
from, and must be completed prior to, any change in gain/loss margin permitted under the
premium rounding rules.
Also note that the Part D bid must be unchanged (aside from a rare exception to address a
negative Part D basic premium). However, when resubmitting bids during or after the rebate
reallocation period, plans must update the national average monthly bid amount and base
beneficiary premium in the Part D BPT.

I. REBATE REALLOCATION PERMISSIBILITY BY PLAN TYPE
MA-PD sponsors may resubmit bids to reallocate rebates in order to return to the target Part D
basic premium. Some MA-PD plans are required to reallocate rebates.
The target premium is communicated to CMS in the MA BPT in the initial June bid
submission. The target may not be changed after initial submission.
MA-PD sponsors have two options for the target premium. They can set it equal to—
•
•

The basic Part D premium net of rebates (that is, the amount displayed in line 7d of
Worksheet 6, Section IIIC), or
The low income premium subsidy amount.

This choice is designated on line 10 of Worksheet 6 Section IIIC; it is called the “Plan Intention
for target Part D basic premium.”
The target Part D basic premium concept does not apply to MA-only plans, since these plans do
not submit a Part D BPT.
All regional PPO plans must resubmit during the rebate reallocation period, to reflect the
published MA regional PPO benchmarks within their bids.

CY2024 MA BPT Instructions

Page 109 of 147

APPENDIX E

The tables below summarize rebate reallocation permissibility during the rebate reallocation
period for various plan types and rebate scenarios and show where examples can be found in
this appendix. Additionally, the tables indicate if premium rounding is permitted during rebate
reallocation.
MA-PD Plans with MA Rebate Dollars in the Initial June Bid Submission

Type of Plan
Local
Local
Local

Rebate Scenario*
Premium decreases
below $0
Premium decreases
but is greater than $0
Premium increases

RPPO

Rebate Reallocation

Premium
Rounding

Example

Required

Permitted

1

Permitted
Permitted
Required, to reflect the
published MA regional
benchmarks

Permitted
Permitted

2
3

Permitted

4

* Impact on the Part D basic premium net of rebates (line 7d of Worksheet 6, Section IIIC) of reflecting
the CMS published benchmarks.
MA-PD Plans with No MA Rebate Dollars in the Initial June Bid Submission

Type of Plan
Local
RPPO

Rebate Reallocation
Not permitted
Required, to reflect the published
MA regional benchmarks

Premium Rounding
Permitted

Rebate Reallocation
Not permitted; these plans are not
affected by the Part D and MA
regional benchmarks
Required, to reflect the published
MA regional benchmarks

Premium Rounding
Not permitted; premiums must
reflect desired rounding in the
initial June bid submission

Permitted

MA-Only Plans

Type of Plan

Local
RPPO

Permitted

II. REBATE REALLOCATION RULES AND EXAMPLES
A. Return to the Target Premium

When rebates are reallocated, the Part D basic premium net of rebate must be returned to the
target Part D basic premium indicated in the initial June bid submission; there is no option to
target and reallocate rebates to return to the Total Plan Premium.
CMS will not accept a partial return to the target premium, except in the following situations:
•
•

The entire rebate has been reallocated to reduce the Part D basic premium, but the
resulting premium is still greater than the target premium.
The entire rebate has been reallocated to reduce other beneficiary premiums (A/B
mandatory supplemental, Part B, and/or Part D supplemental), but the resulting
premium is still less than the target premium.

CY2024 MA BPT Instructions

Page 110 of 147

APPENDIX E

See examples 2a and 2b in Section II.C.
B. Negative Part D Basic Premium Net of Rebate after Part D Benchmark Announcement

If, after reflecting announced Part D benchmarks, the Part D basic premium net of rebate is less
than zero, rebate reallocation is required.
The amount of rebate allocated to buy down the Part D basic premium cannot exceed the
amount of the pre-rebate premium. Therefore, if the premium resulting from application of the
national average monthly bid amount and the base beneficiary premium is negative, then the
excess rebate allocated to buy down the Part D basic premium must be reallocated to buy down
the other premiums (the A/B mandatory supplemental premium, the Part D supplemental
premium, and/or the Part B premium) or to add A/B mandatory supplemental benefits subject
to Section III.
Example 1

MA BPT Worksheet 6,
Section IIIC, Line—
7a. (Part D basic premium)
Prior to rebates (rounded
value from Part D BPT)
7c. A/B rebates for Part D
Basic Premium (rounded)
7d. Part D Basic Premium
10. Plan intention for target
PD basic premium

Initial June Bid
Submission

After Release
of Benchmark

Rebate
Reallocation
Resubmission

$36

$34

$34

$36
$0

$36
−$2
Premium
amount
displayed in line
7d

$34
$0
Premium
amount
displayed in
line 7d

Premium amount
displayed in line
7d

The required change is the shift from a $36 to a $34 rebate allocation to the Part D basic
premium in order to return to the target premium of $0. The excess $2 is allocated to
buy down other premiums or to add A/B mandatory supplemental benefits subject to
Section III.
C. Part D Basic Premium Net of Rebate after Part D Benchmark Announcement Is Less than
Target Part D Basic Premium, but Not Less than Zero

Rebate reallocation to reduce the other premiums (A/B mandatory supplemental, Part B, and/or
Part D supplemental) or to add A/B mandatory supplemental benefits subject to Section III is
optional if the Part D basic premium net of rebate is lower than the target Part D basic
premium, but not less than zero. The MAO has the following two options for rebate allocation:
•
•

Leave the final Part D basic premium net of rebate unchanged (that is, at the level
resulting from application of the national average monthly bid amount and the base
beneficiary premium), or
Reallocate the rebate in order to return to the target Part D basic premium. The rebate
may be reallocated to reduce other beneficiary premiums (A/B mandatory
supplemental, Part B, and/or Part D supplemental) or to add A/B mandatory
supplemental benefits subject to Section III. However, if it is not possible to return to
the target Part D basic premium, a partial return to the target premium is acceptable

CY2024 MA BPT Instructions

Page 111 of 147

APPENDIX E

only if the MAO reallocates the entire rebate to reduce other beneficiary premiums or
add A/B mandatory supplemental benefits subject to Section III.
Note: If the MAO elects to allocate the excess rebate dollars to the other premiums or benefits,
then the final Part D basic premium must equal the target premium, unless the MAO reallocates
the entire rebate to reduce other beneficiary premiums and the Part D basic premium is still less
than the target premium.
Example 2a

MA BPT Worksheet 6,
Section IIIC, Line—
7a. (Part D basic premium)
Prior to rebates (rounded
value from Part D BPT)
7c. A/B rebates for Part D
Basic Premium (rounded)

Initial June Bid
Submission

After
Release of
Benchmark

Rebate
Reallocation
Option 1

Rebate
Reallocation
Option 2

$35

$30

$30

$30

$15

$15

$15

$10

7d. Part D Basic Premium

$20

10. Plan intention for target
PD Basic Premium

Premium amount
displayed in line
7d

$15
Premium
amount
displayed in
line 7d

$15
Premium
amount
displayed in
line 7d

$20
Premium
amount
displayed in
line 7d

The MAO has one of the following two options for rebate allocation:
•
•

No rebate reallocation—leave the Part D basic premium at the post-Part D benchmark
announcement basic premium of $15. Resubmission is not necessary.
Reallocate $5 of rebates to other premiums or A/B mandatory supplemental benefits
subject to Section III in order to return to the target Part D basic premium of $20.

Note: If the MAO does not want to leave the post-Part D benchmark announcement premium at
$15, only a return to $20 is acceptable, not a partial return of, for example, $18.
Example 2b

MA BPT Worksheet 6,
Section IIIC, Line—
7a. (Part D basic premium)
Prior to rebates (rounded
value from Part D BPT)
7c. A/B rebates for Part D
Basic Premium (rounded)

Initial June Bid
Submission

After
Release of
Benchmark

$35

$30

$30

$30

$3

$3

$3

$0

7d. Part D Basic Premium

$32

10. Plan intention for target
PD basic premium

Premium amount
displayed in line
7d

$27
Premium
amount
displayed in
line 7d

$27
Premium
amount
displayed in
line 7d

$30
Premium
amount
displayed in
line 7d

CY2024 MA BPT Instructions

Rebate
Reallocation
Option 1

Rebate
Reallocation
Option 2

Page 112 of 147

APPENDIX E

The MAO has one of the following two options for rebate allocation:
•
•

No rebate reallocation; leave the Part D basic premium at the post-Part D benchmark
announcement basic premium of $27. Resubmission is not necessary.
Reallocate the entire $3 of rebates to other premiums or A/B mandatory supplemental
benefits subject to section III such that the final Part D basic premium net of rebate is
the same as the post-Part D benchmark announcement basic premium before rebate
reallocation of $30.

Note: If the MAO does not want to leave the post-Part D benchmark announcement premium at
$27, only a return to $30 is acceptable, not a partial return of, for example, $29.
D. Part D Basic Premium Net of Rebate after Part D Benchmark Announcement Is Greater
than Target Part D Basic Premium

Rebate reallocation from other premiums (A/B mandatory supplemental, Part B, and/or Part D
supplemental) or A/B mandatory supplemental benefits subject to section III to the Part D basic
premium in order to meet the target Part D basic premium is optional if the Part D basic
beneficiary premium net of rebate is higher than the target premium (that is, the plan has
insufficient rebates). The MAO has the following two options for rebate allocation:
•
•

Leave the final Part D basic premium net of rebate unchanged (that is, at the level
resulting from application of the national average monthly bid amount and the base
beneficiary premium), or
Reallocate rebate that had been applied to the reduction of other premiums
(A/B mandatory supplemental, Part B, and/or Part D supplemental) or to A/B
mandatory supplemental benefits subject to section III toward the Part D basic
premium, in order to return to the target Part D basic premium. If the MAO does elect
to reallocate additional rebate dollars from other benefits, the final Part D basic
premium must be the target premium except in the following situation: the MAO
intends to return to the target premium, and the entire rebate has been reallocated to
reduce the Part D basic premium, but the resulting premium is still greater than the
target premium.
Example 3

MA BPT Worksheet 6,
Section IIIC, Line —
7a. (Part D basic premium)
Prior to rebates (rounded
value from Part D BPT)
7c. A/B rebates for Part D
Basic Premium (rounded)
7d. Part D Basic Premium

Initial June Bid
Submission

After
Release of
Benchmark

$35

$40

$40

$40

$15
$20

10. Plan intention for target
PD basic premium

Premium amount
displayed in line 7d

$15
$25
Premium
amount
displayed in
line 7d

$15
$25
Premium
amount
displayed in
line 7d

$20
$20
Premium
amount
displayed in
line 7d

CY2024 MA BPT Instructions

Rebate
Reallocation
Option 1

Rebate
Reallocation
Option 2

Page 113 of 147

APPENDIX E

The MAO has one of the following two options for rebate allocation:
•
•

No rebate reallocation; leave the Part D basic premium at the post-Part D benchmark
announcement Part D basic premium of $25. Resubmission is not necessary.
Reallocate $5 of rebates from other premiums or A/B mandatory supplemental benefits
subject to section III in order to return to the target Part D basic premium of $20.

Note: If the MAO does not want to leave the post-Part D benchmark announcement premium at
$25, only a return to $20 is acceptable, not a partial return of, for example, $23, unless $23 is
the result of allocating all rebates to the Part D basic premium.
E. Increase or Decrease in RPPO Total Rebate Dollars

Once CMS announces the MA regional benchmarks, there may be an increase or decrease in
the total rebate dollars in a regional plan’s bid. The allocation of rebate dollars must be revised
to reflect the new total rebate dollars as well as the effects of the Part D benchmark
announcement.
Example 4

MA BPT Worksheet 6
MA Rebate (IIIB, line 1)
MA rebate for premium
buydown other than Part D
basic premium* (IIB, line
2 and IIIC, lines 2a, 2b
and 8c)
Part D Premium Buydown
Basic (IIIB, line 5)
Total (MA Rebates) (IIIB,
line 7)
Unallocated rebates
A/B Mand Suppl revenue
requirements (IIIC, line 1)
A/B Mand Suppl premium
(net of rebates) (IIIC, line
3)
(Part D basic premium)
Prior to rebates (IIIC, line
7a)
Part D Basic Premium (net
of rebates) (IIIC, line 7d)
Total estimated plan
premium (MA and PD)
(IIIC, line 9)
Plan intention for target
PD basic premium (IIIC,
line 10)

CY2024 MA BPT Instructions

Initial June
After
Rebate
Rebate
Rebate
Bid
Release of Reallocation Reallocation Reallocation
Submission Benchmark
Option 1
Option 2
Option 3
$55
$53
$53
$53
$53

$40

$40

$38

$43

$38

$15

$15

$15

$10

$15

$55
$0

$55
−$2

$53
$0

$53
$0

$53
$0

$50

$50

$50

$50

$48

$10

$10

$12

$7

$10

$35

$30

$30

$30

$30

$20

$15

$15

$20

$15

$30
Premium
amount
displayed
in line 7d

$25
Premium
amount
displayed
in line 7d

$27
Premium
amount
displayed in
line 7d

$27
Premium
amount
displayed in
line 7d

$25
Premium
amount
displayed in
line 7d

Page 114 of 147

APPENDIX E
* Part B Rebate Allocation, Reduce A/B Cost Sharing, Other A/B Mand Suppl. Benefits, and A/B Rebates
for Part D Suppl Premium.

The MAO has one of the following three options for rebate allocation:
•
•

•

Leave the basic Part D premium net of rebate at the post-Part D benchmark
announcement premium of $15. Subtract $2 of rebates that were allocated to other
premiums such that the total rebates allocated equal the total rebates available.
Reduce the rebate allocation for the basic Part D premium by $5 in order to return to the
target Part D basic premium of $20. Reallocate $3 of rebates to other premiums or A/B
mandatory supplemental benefits subject to section III such that the total rebates
allocated equal the total rebates available.
Make a change to A/B supplemental benefits subject to section III. Reduce the rebate
allocation to benefits other than the Part D basic premium by $2 such that the total
rebates allocated equal the total rebates available. Leave the basic Part D premium net
of rebate at the post-Part D benchmark announcement premium of $15.
Example 5a
Initial June
Bid
Submission
$55

After
Release of
Benchmark
$53

Rebate
Reallocation
Option 1
$53

Rebate
Reallocation
Option 2
$53

Rebate
Reallocation
Option 3
$53

MA rebate for premium
buydown other than Part D
basic premium* (IIB, line 2
and IIIC, lines 2a, 2b and
8c)

$40

$40

$38

$33

$38

Part D Premium Buydown
Basic (IIIB, line 5)

$15

$15

$15

$20

$15

Total (MA Rebates) (IIIB,
line 7)

$55

$55

$53

$53

$53

$0

−$2

$0

$0

$0

A/B Mand Suppl revenue
requirements (IIIC, line 1)

$50

$50

$50

$50

$48

A/B Mand Suppl premium
(net of rebates) (IIIC, line
3)

$10

$10

$12

$17

$10

(Part D basic premium)
Prior to rebates (IIIC, line
7a)

$35

$40

$40

$40

$40

Part D Basic Premium (net
of rebates) (IIIC, line 7d)

$20

$25

$25

$20

$25

Total estimated plan
premium (MA and PD)
(IIIC, line 9)

$30

$35

$37

$37

$35

MA BPT Worksheet 6
MA Rebate (IIIB, line 1)

Unallocated rebates

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MA BPT Worksheet 6
Plan intention for target PD
basic premium (IIIC, line
10)

Initial June
After
Rebate
Bid
Release of Reallocation
Submission Benchmark
Option 1
Premium
Premium
Premium
amount
amount
amount
displayed in displayed in displayed in
line 7d
line 7d
line 7d

Rebate
Reallocation
Option 2
Premium
amount
displayed in
line 7d

Rebate
Reallocation
Option 3
Premium
amount
displayed in
line 7d

* Part B Rebate Allocation, Reduce A/B Cost Sharing, Other A/B Mand Suppl. Benefits, and A/B Rebates
for Part D Suppl Premium.

The MAO has one of the following three options for rebate allocation:
•
•

•

Leave the basic Part D premium net of rebate at the post-Part D benchmark
announcement premium of $25. Subtract $2 of rebates that were allocated to other
premiums such that the total rebates allocated equal the total rebates available.
Increase the rebate allocation for the basic Part D premium by $5 in order to return
to the target Part D basic premium of $20. Subtract $7 of rebates that were allocated
to other premiums such that the total rebates allocated equal the total rebates
available.
Make a change to A/B supplemental benefits as discussed in section III. Reduce the
rebate allocation to benefits other than the Part D basic premium by $2 such that the
total rebates allocated equal the total rebates available. Leave the basic Part D
premium net of rebate at the post-Part D benchmark announcement premium of $25.

Example 5b
Initial June
After
Rebate
Rebate
Rebate
Rebate
Bid
Release of Reallocation Reallocation Reallocation Reallocation
MA BPT Worksheet 6 Submission Benchmark Option 1
Option 2
Option 3
Option 4
MA Rebate (IIIB, line 1)
$55
$57
$57
$57
$57
$57
MA rebate for premium
buydown other than
Part D basic premium*
(IIB, line 2 and IIIC,
lines 2a, 2b and 8c)

$40

$40

$42

$47

$42

$47

Part D Premium
Buydown Basic (IIIB,
line 5)

$15

$15

$15

$10

$15

$10

Total (MA Rebates)
(IIIB, line 7)

$55

$55

$57

$57

$57

$57

Unallocated rebates

$0

$2

$0

$0

$0

$0

A/B Mand Suppl
revenue requirements
(IIIC, line 1)

$50

$50

$50

$50

$52

$57

A/B Mand Suppl
premium (net of rebates)
(IIIC, line 3)

$10

$10

$8

$3

$10

$10

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MA BPT Worksheet 6
(Part D basic premium)
Prior to rebates (IIIC,
line 7a)

Initial June
After
Rebate
Rebate
Rebate
Rebate
Bid
Release of Reallocation Reallocation Reallocation Reallocation
Submission Benchmark Option 1
Option 2
Option 3
Option 4

$35

$30

$30

$30

$30

$30

Part D Basic Premium
(net of rebates) (IIIC,
line 7d)

$20

$15

$15

$20

$15

$20

Total estimated plan
premium (MA and PD)
(IIIC, line 9)

$30

$25

$23

$23

$25

$30

Premium
amount
displayed
in line 7d

Premium
amount
displayed
in line 7d

Premium
amount
displayed in
line 7d

Premium
amount
displayed in
line 7d

Premium
amount
displayed in
line 7d

Premium
amount
displayed in
line 7d

Plan intention for target
PD basic premium (IIIC,
line 10)

* Part B Rebate Allocation, Reduce A/B Cost Sharing, Other A/B Mand Suppl. Benefits, and A/B Rebates
for Part D Suppl Premium.

The MAO has one of the following four options for rebate allocation:
•
•
•

•

Leave the basic Part D premium net of rebate at the post-Part D benchmark
announcement premium of $15. Reallocate $2 of rebates to other premiums such
that the total rebates allocated equal the total rebates available.
Reduce the rebate allocation for the basic Part D premium by $5 in order to return to
the target Part D basic premium of $20. Reallocate $7 of rebates to other premiums
such that the total rebates allocated equal the total rebates available.
Make a change to A/B supplemental benefits subject to section III. Increase the
rebate allocation to benefits other than the Part D basic premium by $2 such that the
total rebates allocated equal the total rebates available. Leave the basic Part D
premium net of rebate at the post-Part D benchmark announcement premium of $15.
Reduce the rebate allocation for the basic Part D premium by $5 in order to return to
the target Part D basic premium of $20. Reallocate $7 of rebates to other premiums
such that the total rebates allocated equal the total rebates available. Make a change
to A/B supplemental benefits subject to section III to return to the original A/B
Mand Suppl premium net of rebates.

F. Every Plan Bid Must Allocate the Exact Amount of the Plan’s Total Rebate

The exact amount of the plan’s total rebate must be allocated among the various options
described above. MAOs must account for all rebate dollars in a plan’s bid. Moreover, the
amount of rebate allocated to each benefit (A/B mandatory supplemental, Part B, Part D) must
not exceed the value of that benefit. For example, if the Part D supplemental premium is $50,
an MAO may not allocate more than $50 to buy down that premium. Rebate allocations to the
Part B premium cannot exceed the amount provided by CMS that is pre-populated in the BPT.

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G. Examples in which Target Part D Basic Premium Is the Low-Income Premium Subsidy
Amount (LIPSA) and the Plan Desires to Reach the LIPSA (Including De Minimis)
Part D Basic Premium Net of Rebate after Part D Benchmark Announcement Is Less
than LIPSA

If the Part D basic premium net of rebate post-benchmark is lower than the LIPSA, and
LIPSA is designated as the target Part D basic premium, then the MAO may increase
the Part D basic premium in order to reach the LIPSA by either (i) reallocating rebates
to reduce other beneficiary premiums (A/B mandatory supplemental, Part B, and/or
Part D supplemental), or (ii) adding A/B mandatory supplemental benefits, in
accordance with this appendix, and reallocating rebates to reduce the premium for the
newly added benefits.
Example 6a

MA BPT Worksheet 6,
Section IIIC, Line—
7a. (Part D basic premium)
Prior to rebates (rounded
value from Part D BPT)
7c. A/B rebates for Part D
basic premium (rounded)
7d. Part D Basic Premium
10. Plan intention for target
PD basic premium
LIPSA estimate/LIPSA

Initial June Bid
Submission

After Release
of Benchmark

Rebate
Reallocation

$35

$30

$30

$15
$20

$15
$15

$12
$18

LIPSA
$18

LIPSA
$18

LIPSA estimate
$20

The LIPSA is less than expected, and the Part D basic premium net of rebate
post-benchmark is less than the LIPSA. To reach the LIPSA, the only option that the
MAO has is to reallocate $3 of rebates to other benefits/premiums (adding mandatory
supplemental benefits as needed).
Part D Basic Premium Prior to Rebate (line 7a) after Part D Benchmark
Announcement Is Less than LIPSA

If the post-benchmark Part D basic premium prior to rebate (line 7a) is lower than the
LIPSA, and LIPSA is designated as the target Part D basic premium, then the postrebate reallocation Part D basic premium net of rebate will necessarily be lower than the
LIPSA and the MAO is not allowed to achieve the LIPSA. To be as close to the LIPSA
as possible, the MAO may increase the final Part D basic premium by reallocating the
entire rebate that was applied to Part D basic premium to other beneficiary premiums
(A/B mandatory supplemental, Part B, and/or Part D supplemental) or A/B
supplemental benefits subject to section III.

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Example 6b

MA BPT Worksheet 6,
Section IIIC, Line—
7a. (Part D basic premium)
Prior to rebates (rounded
value from Part D BPT)
7c. A/B rebates for Part D
Basic Premium (rounded)
7d. Part D Basic Premium
10. Plan intention for target
PD basic premium
LIPSA estimate/LIPSA

Initial June Bid
Submission

After Release
of Benchmark

Rebate
Reallocation
Option

$33

$32

$32

$3
$30

$3
$29

$0
$32

LIPSA
$34

LIPSA
$34

LIPSA estimate
$30

The LIPSA is greater than expected, and the post-benchmark Part D basic premium net
of rebate is less than the LIPSA. To try to reach the LIPSA, the only option the MAO
has is to reallocate $3 to other premiums or benefits.
Part D Basic Premium Net of Rebate after Part D Benchmark Announcement Is
Greater than LIPSA

If the Part D basic premium net of rebate post-benchmark is greater than the LIPSA,
and LIPSA is designated as the target Part D basic premium, then the MAO may lower
the Part D basic premium to the LIPSA by reallocating the rebate to the Part D basic
premium that was applied to buy down other premiums (A/B mandatory supplemental,
Part B, and/or Part D supplemental) or A/B supplemental benefits subject to section III.
If the MAO chooses to reallocate additional rebate dollars from other premiums or
benefits, the final Part D basic premium must equal the LIPSA except in the following
situation: the MAO intends to return to the LIPSA premium, and the entire rebate has
been reallocated to reduce the Part D basic premium, but the resulting premium is still
greater than the LIPSA.
Example 6c (Similar to Example 3)

MA BPT Worksheet 6,
Section IIIC, Line—
7a. (Part D basic premium)
Prior to rebates (rounded
value from Part D BPT)
7c. A/B rebates for Part D
Basic Premium (rounded)
7d. Part D Basic Premium
10. Plan intention for target
PD basic premium
LIPSA estimate/LIPSA

Initial June Bid
Submission

After Release
of Benchmark

Rebate
Reallocation

$35

$40

$40

$15
$20

$15
$25

$25
$15

LIPSA estimate
$20

LIPSA
$15

LIPSA
$15

The LIPSA is less than expected, and the Part D basic premium post-benchmark is
greater than the LIPSA. To return to the target LIPSA, the only option the MAO has is
to reallocate rebates from other benefits/premiums to the Part D basic premium.

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APPENDIX E
Part D Basic Premium Net of Rebate after Part D Benchmark Announcement Is
Greater than LIPSA - De Minimis Election

The Part D basic premium post-benchmark is greater than the LIPSA and LIPSA is
designated as the target Part D basic premium. If (i) the MAO has no rebates or has
allocated all of the MA rebates to the Part D basic premium, and (ii) the difference
between the Part D basic premium post-benchmark and the LIPSA is between $0 and
the de minimis amount published by CMS, the MAO may volunteer to waive the
portion of the Part D basic premium equal to this difference.
Conversely, if the difference between the Part D basic premium post-benchmark and the
LIPSA is greater than the de minimis amount published by CMS, the MAO cannot
volunteer to waive the de minimis amount.
Example 6d (MA rebates allocated to Part D basic premium equal total MA rebates)

Total MA rebates post-benchmarks are $23.
MA BPT Worksheet 6,
Section IIIC, Line—
7a. (Part D basic premium)
Prior to rebates (rounded
value from Part D BPT)
7c. A/B rebates for Part D
Basic Premium (rounded)
7d. Part D Basic Premium
10. Plan intention for target
PD basic premium
LIPSA estimate/LIPSA

Initial June Bid
Submission

After Release
of Benchmark

Rebate
Reallocation

$35

$40

$40

$15
$20

$15
$25

$23
$17

LIPSA
$15

LIPSA
$15

LIPSA estimate
$20

The difference between the $17 Part D basic premium post-benchmark and the $15
LIPSA is $2. The MAO may volunteer to waive $2 of the $17 Part D basic premium to
reach the target LIPSA only if CMS publishes a de minimis amount greater than or
equal to $2. If CMS publishes a de minimis amount less than $2, the MAO may not
participate in the de minimis program or waive any portion of the $17 Part D basic
premium.
Note that the de minimis amounts in this example are hypothetical and do not reflect
CMS’ de minimis policy for CY2023. Also note that information regarding CMS’
de minimis policy for CY2022 released via an HPMS memorandum dated July 29, 2020
states that “In the instances when an MA-PD allocates all of its MA rebates to buy
down the Part D basic premium, and the plan’s intended target for its Part D basic
premium is the low-income subsidy amount, the MA-PD may volunteer to use the
de minimis premium policy.”
H. First-Time Allocation of Rebate Dollars to Part D Basic Premium during the Rebate
Reallocation Period.

In the June bid submission, an MA-PD plan with MA rebate dollars may have opted not to
allocate any of the rebate to buying down the Part D basic premium. For these bids, if the
Part D basic premium after application of the Part D national average monthly bid amount and
the base beneficiary premium were to be—

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APPENDIX E

•
•

Higher than the target premium, CMS would allow a return to the plan’s target
premium. As shown in the example below.
Lower than the target premium, the MAO would not have the option to return to the
plan’s target premium. There would be no rebates allocated to the Part D basic premium
that could be reallocated to buydown the other premiums (the A/B mandatory
supplemental premium, the Part D supplemental premium, and/or the Part B premium)
and allow a return to the target Part D basic premium.
Example 7

MA BPT Worksheet 6,
Section IIIC, Line —
7a. (Part D basic
premium) Prior to
rebates (rounded from
Part D BPT)
7c. A/B rebates for
Part D Basic Premium
(rounded)
7d. Part D Basic
Premium

10. Plan intention for
target PD basic premium

Initial June
Bid
Submission

Rebate
After Release Reallocation
of Benchmark Option 1

Rebate
Reallocation
Option 2

$10

$15

$15

$15

$0

$0

$0

$5

$10
Premium
amount
displayed in
line 7d

$15
Premium
amount
displayed in
line 7d

$15
Premium
amount
displayed in
line 7d

$10
Premium
amount
displayed in
line 7d

III. ADDITIONAL REBATE REALLOCATION GUIDANCE
Changes Allowed to Funding of the A/B Mandatory Supplemental Benefits

CMS will not allow MAOs to substantially redesign A/B mandatory supplemental benefits
during the rebate reallocation period. CMS expects only marginal adjustments during this
period and will evaluate material differences.
For non-RPPO plans, the value of the added, eliminated, or changed A/B mandatory
supplemental benefit is required to match the amount of rebate that must be shifted to return to
the Part D target premium. For RPPO plans the value of added, eliminated, or changed benefits
is required to match one of the following amounts:
•
•

The net shift in (i) total MA rebate dollars due to an increase or decrease in those
dollars after application of the PPO regional benchmark, and (ii) a shift in rebates
dollars allocated to Part D basic premium to return to the Part D target premium.
The shift in total MA rebate dollars due to an increase or decrease in those dollars after
application of the MA regional PPO benchmark.

CMS will not allow the MAO to eliminate or significantly reduce one benefit and then add or
significantly enhance another benefit.
When the Part D basic premium net of rebate is lower than the target Part D basic premium
after the Part D benchmark announcement, the MAO could—

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APPENDIX E

•
•
•

Further buy down the initial A/B mandatory supplemental premium;
Reduce plan cost sharing and then buy down the new A/B mandatory supplemental
premium to the initial level; or
Add new non-drug benefits (for example, vision) to the A/B mandatory supplemental
benefit package and then buy down the new A/B mandatory supplemental premium to
the initial level.
Example 8

After application of the national average monthly bid amount and the base beneficiary
premium, an MA-PD organization’s Part D basic premium net of rebates shifts from $0
to −$3. The MAO is required to reallocate $3 of rebates and may decide to buy down
the cost of a benefit in the A/B mandatory supplemental package.
However, CMS will not allow the MAO to accomplish rebate reallocation by changing
the value of benefits by more than $3, for example, by moving $15 out of A/B
cost-sharing reductions and moving $18 into an additional benefit. We would consider
this to be a substantial redesign of the A/B mandatory supplemental benefit.
When the Part D basic premium net of rebate is greater than the target Part D basic premium
after the Part D benchmark announcement, the MAO could—
•
•

Buy down less of the A/B mandatory supplemental premium; or
Eliminate or reduce an A/B mandatory supplemental benefit (for example, provide an
eye exam less frequently), and then buy down the new A/B mandatory supplemental
premium to the initial level.

Similarly, to return a regional plan with a decrease in the total amount of rebate to the original
premium, the MAO could, for example, eliminate from the A/B mandatory supplemental
benefit package the coverage of a non-Medicare covered item or service.
Changes Allowed to the Part B Premium Reduction

One use of rebate dollars allowed under 42 CFR §422.266 is reduction of the Part B premium.
During the rebate reallocation period, rebate dollars allocated for this purpose may be increased
or decreased. However, the maximum amount of rebate that can be allocated to reduce the
Part B premium is equal to the amount pre-populated by CMS in the BPT.
Changes Allowed to Funding of the Part D Basic and Supplemental Benefits

During the rebate reallocation period, rebate dollars that are not used to reach the target
premium for basic Part D coverage may be used to buy down the Part D supplemental
premium. However, no modifications are allowed to the benefit design or pricing of the Part D
basic benefit or the supplemental benefit offered under the “enhanced alternative” design. That
is, this prohibition includes that no changes are permitted to the allowed costs, administrative
costs, or gain/loss margin in the Part D basic and supplemental benefits. (Note that in the rare
case, in which the basic Part D premium is negative after the release of the national average and
base beneficiary premium, limited changes may be allowed to enhance the Part D benefits in
order to create a Part D supplemental premium that offsets the Part D basic premium.)

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APPENDIX E
MA Pricing

This section describes changes in MA pricing assumptions allowed or required by CMS as a
result of benefit changes made due to rebate reallocation. Note that, aside from small changes
to bid values solely from automatic calculations in the BPT, the modifications to pricing
assumptions discussed in this section are separate from, and exclude, any adjustment to the
gain/loss margin pertaining to premium rounding as permitted in Section IV, Rule 3
(the “50 cents rounding rule”) of this appendix.
Incremental Benefit Changes

The BPT must reflect the value of A/B mandatory supplemental benefits added or
eliminated as a result of rebate reallocation including the impact of such changes on
other pricing assumptions, consistent with the pricing approach and methodologies
utilized in the initial June bid submission. (That is, incremental changes in the cost of
benefits and the MA regional PPO benchmark must “flow-through” the original pricing
structure supporting the initial June bid submission.) Examples include, but are not
limited to changes in—
•

Projected allowed costs due to induced utilization related to changes in cost sharing.

The BPT will automatically reflect (that is, calculate by formula) the following small
changes to bid values:
•
•

A small change due to the automatic (that is, calculated by formula) proportional
allocation of non-benefit expenses and the gain/loss margin in the BPT formulas.
A small change in the ESRD subsidy due to the automatic impact of changes in
mandatory supplemental benefits, non-benefit expenses and gain/loss margin.

Total Beneficiary Cost

If the MAO chooses to modify the PBP as a result of rebate reallocation, CMS will
allow a minor change in gain/loss margin in order to satisfy CMS TBC evaluations as
explained below. Note that this modification to gain/loss margin is separate from, and
excludes, any adjustment to the gain/loss margin pertaining to premium rounding as
permitted in Section IV, Rule 3 of this appendix. That is, a change in gain/loss margin
under the “50 cents rounding rule” applies after an adjustment to gain/loss margin to
satisfy CMS TBC evaluations.
The adjustment for TBC is based on the CMS published Part D and MA regional
benchmarks and the related post-benchmark, pre-rebate reallocation premiums.
However, it does not take into account benefit changes resulting from rebate
reallocation.
•
•
•

First recalculate the plan’s TBC taking into account the premium changes associated
with the CMS published Part D and MA regional benchmarks prior to any changes
to benefits.
Then, calculate the (minimum) amount of premium change needed to satisfy TBC
evaluations.
Gain/loss margin may change by the amount necessary to produce such premium
change.

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APPENDIX E

Note that the MAO may not further adjust gain/loss margin in order to account for any
change in TBC generated by benefit changes made during rebate reallocation.

IV. RULES FOR ROUNDING PREMIUMS
This section describes system requirements for rounded premiums and the circumstances in
which the MAO may round premiums in order to reach plan premium goals. If the plan is
permitted to participate in rebate reallocation, then the MAO may participate in premium
rounding regardless of whether or not they actually participated in rebate reallocation.
Rule 1 – System Requirements Regarding Premiums and Rebates

To comply with premium withhold system requirements, the BPTs round the following
premiums to the nearest one decimal: MA (the sum of basic plus mandatory supplemental),
Part D basic, and Part D supplemental. No pennies are allowed.
Rebate dollars allocated to reduce the Part B and Part D premiums are rounded to one decimal.
Rebate dollars allocated to reduce the A/B mandatory supplemental premium are rounded to
two decimal places.
Rule 2 – Local MA-Only Plans

For local MA-only plan bids, the plan premium submitted in the initial June bid submission is
considered the final premium, as these bids are not affected by the Part D national average
calculation or the MA regional plan benchmark calculations. Local MA-only plans will not be
given an opportunity to round the premiums after the initial June bid submission. If a local
MA-only MAO wishes to offer a “whole-dollar” premium, the initial June bid submission must
reflect a total premium that is rounded to the nearest dollar. The bid assumptions (such as
gain/loss margin) must support the desired plan premium and the desired level of premium
rounding.
Rule 3 – Local MA-PD and Regional PPO Plans

Rounding Rule 3 applies to local MA-PD plans and regional PPO plans that are allowed to or
are required to participate in the rebate reallocation process. Note that it applies separately
from, and after, all other bid adjustments. During rebate reallocation, MAOs may round the
total plan premium to the nearest dollar (up or down) by slightly increasing or reducing the
gain/loss margin in the MA bid, as long as the change in gain/loss margin results in a total plan
premium change of no more than $0.50. (The total plan premium is defined at 42 CFR
§422.262(b) as the consolidated monthly premium consisting of the combination of the MA
basic and mandatory supplemental premiums and the Part D basic and supplemental
premiums.)
Further, if the plan has rebate dollars, then the MAO may round total premium by making a
small change only to gain/loss margin that results in an increase or decrease in rebate dollars of
no more than $0.50. This is defined as participating in premium rounding rather than
participating in rebate reallocation. Plans that do not reallocate rebates may still round their
premium.

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APPENDIX E
Examples of Rounding
Example a: An MA-PD plan has no premium for Medicare-covered or A/B mandatory

supplemental benefits, and an initial basic Part D premium (target premium) of $30.
(This situation could occur if (i) the bid equals the benchmark, and no A/B mandatory
supplemental benefits are offered, or (ii) the bid is less than the benchmark, and the plan
has A/B mandatory supplemental benefits and applies rebates to reduce the A/B
mandatory supplemental premium to zero.) If the post-Part D benchmark announcement
total plan premium is $30.42, the MAO could round the plan premium to $30.00 by
generating $0.42 of additional rebates to allocate to the basic Part D premium by
slightly reducing the gain/loss margin for MA benefits. (The gain/loss margin for Part D
benefits must not change.)
Example b1: An MA-PD plan has no premium for Medicare-covered or A/B mandatory

supplemental benefits, and an initial basic Part D premium (target premium) of $30.
(This situation could occur if (i) the bid equals the benchmark, and no
A/B supplemental benefits are offered, or (ii) the plan applies rebates to reduce the A/B
mandatory supplemental premium to zero.) If the post-Part D benchmark announcement
bid results in a total plan premium of $32.42, the MAO could opt to generate $0.42 of
additional rebates to allocate to the basic Part D premium by making a slight reduction
in the gain/loss margin for MA benefits that would result in a premium of $32.00.
The MAO could not use the rounding rules to adjust the premium to anything lower
than $32. For example, the organization could not round to a combined premium of $30
by reducing the gain/loss margin to result in a premium change of $2.42. To return to
the premium of $30, the MAO would have to engage in rebate reallocation. See earlier
sections of this appendix for guidance on rebate reallocation.
Example b2: An MA-PD plan has A/B mandatory supplemental benefits, an initial

basic Part D premium (target premium) of $30, and a total plan premium of $70.00. If
the post-Part D benchmark announcement bid results in a basic Part D premium of
$28.55 and a total plan premium of $68.55, the MAO could opt to make a slight change
in the gain/loss margin for MA benefits in order to achieve a $0.45 increase in premium
for A/B mandatory supplemental benefits, resulting in a total plan premium of $69.00.
The MAO could not use the rounding rules to adjust the premium to anything higher
than $69. For example, the organization could not round to a combined premium of $70
by increasing the gain/loss margin to result in a premium change of $1.45. To return to
the target premium of $30, the MAO would have to engage in rebate reallocation. See
earlier sections of this appendix for guidance on rebate reallocation.
Example c: An MA-PD plan has no rebates and an initial total plan premium of $25.

The post-Part D benchmark announcement total plan premium is $26.52. The MAO
could round the plan premium to the nearest dollar (that is, $27.00) by increasing the
gain/loss margin to generate a $0.48 MA premium.
Example d: The target Part D basic premium is the low-income premium subsidy

amount. After the Part D national average monthly bid amount is calculated, the Part D

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APPENDIX E

basic premium is $32.00, and the low-income premium subsidy amount is $31.60. The
plan has the following three options:
Option 1: The plan can maintain its Part D basic premium of $32.00. The plan’s

beneficiaries eligible for the full subsidy will pay a Part D basic premium of $0.40.
Option 2: The MA-PD plan can reallocate $0.40 of the rebates that were allocated to

the A/B mandatory supplemental premium to its Part D basic premium, thus
reducing the premium to the low-income premium subsidy amount of $31.60. To
account for the reduction in rebates applied to the A/B mandatory supplemental
premium, the MA-PD plan may either increase its A/B mandatory supplemental
premium by $0.40 or reduce its gain/loss margin appropriately to eliminate the
premium increase. Enrollees not eligible for the low-income subsidy would pay a
Part D basic premium of $31.60.
Option 3: In order to be able to offer a rounded Part D basic premium to enrollees

not eligible for the low-income subsidy, MA-PD plans are permitted in this situation
to reallocate A/B mandatory supplemental rebates to reduce their Part D basic
premium to the nearest whole-dollar amount below the regional low-income
premium subsidy amount. Therefore, the MA-PD plan can reallocate $1.00 of its
A/B mandatory supplemental rebates to its Part D basic premium, reducing the
Part D basic premium to $31.00, which is the nearest whole-dollar amount below
the regional low-income premium subsidy of $31.60. To account for the reduction
in A/B mandatory supplemental rebates applied to MA, the MA-PD plan must
increase its A/B mandatory supplemental premium by $1.00 and cannot offset the
reduction by a change in the gain/loss margin. Please note that in this option, the
MA-PD plan forgoes $0.60 in potential low-income premium subsidy dollars per
each beneficiary eligible for the full subsidy.
Example e: The target Part D basic premium is the LIPSA. After the Part D national

average monthly bid amount is calculated, the low-income premium subsidy amount is
$31.75, which CMS will round to $31.80. Since Part D premiums must be rounded to
one decimal, it is acceptable for the plan to round the Part D basic premium to $31.70 or
to $31.80, as follows:
Option 1: If the plan were to round the Part D basic premium to $31.70, then it

would receive $31.70 as the low-income premium subsidy. The plan’s beneficiaries
eligible for the full subsidy would not pay a Part D basic premium, since such
premium is lower than the LIPSA.
Option 2: If the plan were to round the Part D basic premium to $31.80, then it

would receive $31.80 as the low-income premium subsidy as if the LIPSA were
$31.80. In this case, the plan’s beneficiaries eligible for the full subsidy would not
pay a Part D basic premium, since the Part D basic premium equals the LIPSA when
such premiums are rounded to one decimal.
Example f: An MA-PD plan has three segments, with MA premiums of $51, $76, and

$110. The Part D basic premium after the benchmark announcement is $37.90. To
ultimately achieve whole-dollar total plan premiums, the MAO could increase the MA
gain/loss margin requirements to increase each MA premium by $0.10. When added to

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APPENDIX E

the $37.90 Part D premium, the total plan premium for each segment becomes a wholedollar amount: $89, $114, and $148.
Example g: The initial June bid submission for a local MA-only plan includes a

$0 basic MA premium and a $61.30 mandatory supplemental MA premium. The MAO
would like to offer a whole-dollar premium to the plan’s enrollees. Before submitting
the initial BPT to CMS (via HPMS upload), the actuary would slightly revise the
gain/loss margin to accomplish the rounded premium. For example, the actuary could
reduce the gain/loss margin by $0.30 to achieve the $61.00 rounded premium. This
adjustment must be completed before the BPT is submitted to CMS in early June. Note
that MAOs are not allowed to make significant changes to the BPT in order to round
premiums. Local MA-only plans do not participate in rebate reallocation.

V. SUMMARY OF CONSIDERATIONS FOR REBATE REALLOCATION RESUBMISSIONS
When preparing resubmissions during the rebate reallocation period, plans are to review the
following considerations:
•
•
•
•
•

All regional PPO plans must resubmit during the rebate reallocation period, in order to
reflect the published regional MA benchmarks.
If the Part D national average monthly bid amount and base beneficiary premium result
in a Part D basic premium that is lower than the rebates allocated to Part D basic, then
the bid must be resubmitted.
When resubmitting bids during the rebate reallocation period, plans must update the
national average monthly bid amount and base beneficiary premium in the Part D BPT.
The Part D bid must be unchanged except as authorized by CMS.
The Part D basic premium net of rebates must equal the target.
If the LIPSA is targeted, the resubmitted Part D basic premium net of rebates must be
equal to the plan’s LIPSA (rounded to the nearest dime or rounded down to the nearest
dollar). Note that the LIPSA for a plan that spans multiple Part D regions must be the
LIS eligible member weighted average of the LIPSA for each service region.

•
•
•

The “plan’s intention for the target premium” in the MA BPT must be unchanged.
Changes to MA pricing assumptions (benefit/non-benefit /gain/loss margin) must be
consistent with these Instructions.
Re-submitted bids must continue to satisfy CMS TBC evaluations and CMS
requirements for service-category cost sharing.

CY2024 MA BPT Instructions

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APPENDIX F

APPENDIX F – SUGGESTED MAPPING OF MA PBP CATEGORIES TO
BPT CATEGORIES
The Medicare Advantage (MA) Bid Pricing Tool (BPT) contains benefit categories that do not
correlate line-by-line with the MA Plan Benefit Package (PBP). The BPT was developed to
include a reasonable number of benefit categories for pricing purposes and to provide benefit
groupings that are consistent with organizations’ accounting and claims systems.
The chart below provides a suggested mapping of the PBP and BPT benefit categories. This
mapping is not intended to represent the only method of reporting benefits in the BPT; rather, it
contains one suggested method that may be used. Other reasonable mappings may also be used
at the actuary’s discretion. The cost sharing reported on Worksheet 3 must clearly identify
where PBP benefit service categories are priced within the BPT service categories (see
Worksheet 3 instructions for more details).
HPMS contains a “Medicare Benefit Description Report” with further information regarding
the PBP service categories and a list of PBP/SB software changes. In addition, the Medicare
Managed Care Manual may be a helpful resource regarding benefit design.
PBP
line # PBP Category
Section B
1a
Inpatient Hospital – Acute
1b
Inpatient Hospital Psychiatric
2
Skilled Nursing Facility (SNF)
3
Cardiac and Pulmonary Rehabilitation
Services
4a
Emergency/Post-Stabilization Services
4b
Urgently Needed Services
4c
Worldwide Emergency/Urgent Coverage
5
Partial Hospitalization
6
7a
7b

Home Health Services
Primary Care Physician Services
Chiropractic Services

7c
7d

7f

Occupational Therapy Services
Physician Specialist Services Excluding
Psychiatric Services (exclude Radiology)
Physician Specialist Services Excluding
Psychiatric (Radiology only)
Mental Health Specialty Services (NonPhysician)
Podiatry Services

7g

Other Health Care Professional Services

7h

Psychiatric Services

7d
7e

CY2024 MA BPT Instructions

BPT
line #

Corresponding BPT Category:
Description/Note (Worksheet 3)

a1
a2
b
h5

Inpatient Facility: Acute
Inpatient Facility: Mental Health
Skilled Nursing Facility
Outpatient Facility – Other: Other

f
f
f
h3
h5
c
i1
i2
i6
i4
i2
i6
i5

Outpatient Facility – Emergency
Outpatient Facility – Emergency
Outpatient Facility – Emergency
OP Facility – Other: Mental Health; or
OP Facility – Other: Other
Home Health
Professional: PCP
Professional: Specialist excl. MH; or
Professional: Other
Professional: Therapy (PT/OT/ST)
Professional: Specialist excl. MH; or
Professional: Other
Professional: Radiology

i3

Professional: Mental Health

i2
i6
i2
i6
i3

Professional: Specialist excl. MH;
or Professional: Other
Professional: Specialist excl. MH; or
Professional: Other
Professional: Mental Health

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APPENDIX F

PBP
line # PBP Category
Section B
7i
Physical Therapy and Speech-Language
Pathology Services
7j
Additional Telehealth Services
7k
Opioid Treatment Program Services
8a
Outpatient Diagnostic Procedures/Tests/Lab
Services
8b
Outpatient Diagnostic/Therapeutic
Radiological Services
9a
Outpatient Hospital Services

BPT
line #

Corresponding BPT Category:
Description/Note (Worksheet 3)

i4

Professional: Therapy (PT/OT/ST)

i1
i2
h1

Professional: PCP
Professional: Specialist excl. MH
OP Facility – Other: Lab

h2

OP Facility – Other: Radiology
OP Facility – Surgery; or
OP Facility – Other (all sub-categories)
OP Facility – Surgery
OP Facility – Other: Other
OP Facility – Other: Other or Other
Medicare Part B
Ambulance
Transportation (Non-Covered)
DME/Prosthetics/Diabetes: DME
DME/Prosthetics/Diabetes: Prosthetics/
Diabetes
DME/Prosthetics/ Diabetes: Prosthetics/
Diabetes
OP Facility – Other: Renal Dialysis
Other Non-Covered
Other Non-Covered
Other Non-Covered
Other Non-Covered
Other Non-Covered
Other Non-Covered
Other Non-Covered

9b
9c
9d

Ambulatory Surgical Center (ASC) Services
Outpatient Substance Abuse Services
Outpatient Blood Services

10a
10b
11a
11b

Ambulance Services
Transportation Services
Durable Medical Equipment (DME)
Prosthetics/Medical Supplies

h5 or
g
g
h5
h5 or
k
d
l
e1
e2

11c

Diabetic Supplies and Services

e2

12
13a
13b
13c
13d
13e
13f
13g

Dialysis Services
Acupuncture (non-Medicare covered)
OTC Items
Meal Benefit
Other 1
Other 2
Other 3
Dual Eligible SNPs with Highly Integrated
Services
Additional Services
Medicare-covered Zero Dollar Preventive
Services

h4
q
q
q
q
q
q
q

13h
14a

q
k, i1,
i2 or
i6
i1, i2
or i6

14b

Annual Physical Exam

14c
14d

Other Defined Supplemental Benefits
Kidney Disease Education Services

p
i1, i2
or i6

14e

Other Medicare-covered Preventive Services

i1, i2
or i6

CY2024 MA BPT Instructions

Other Non-Covered
Other Medicare Part B; Professional:
PCP; Professional: Specialist excluding
MH; or Professional: Other
Professional: PCP; Professional:
Specialist excluding MH; or
Professional: Other
Health & Education (Non-Covered)
Professional: PCP;
Professional: Specialist excluding MH;
or Professional: Other
Professional: PCP;
Professional: Specialist excluding MH;
or Professional: Other

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APPENDIX F

PBP
line # PBP Category
Section B
15
Medicare Part B Rx Drugs (includes Part D
home infusion drugs included in bundled
services)
16a
Preventive Dental
16b
Comprehensive Dental
17a
Eye Exams
17b
Eye Wear
18a
Hearing Exams
18b
Hearing Aids
19a
Reduced Cost Sharing for VBID/MA
Uniformity/Special Supplemental Benefits
for the Chronically Ill ( SSBCI)
19b
Additional Benefits for
VBID/Uniformity/SSBCI
19c
VBID Hospice
Section C
V/T
Visitor/Travel
Section D
Com. Combined Benefits
Ben.
RICS Reductions in Cost Sharing

1

BPT
line #

Corresponding BPT Category:
Description/Note (Worksheet 3)

j

Part B Rx

m
m
n1
n2
o1
o2

Dental (Non-Covered)
Dental (Non-Covered)
Vision (Non-Covered): Professional
Vision (Non-Covered): Hardware
Hearing (Non-Covered): Professional
Hearing (Non-Covered): Hardware
Actuary’s discretion

1

1

Actuary’s discretion

1

Actuary’s discretion

1

Actuary’s discretion

1

Actuary’s discretion

1

Actuary’s discretion

CMS does not suggest any particular BPT category.

CY2024 MA BPT Instructions

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APPENDIX G

APPENDIX G – DE# SUMMARY
MEDICAID ELIGIBILITY DATA
The Medicaid status codes in the beneficiary-level file provided by CMS indicate the Medicaid
eligibility status of the beneficiary as reported by the respective state Medicaid agency. These
codes are shown in the table below. For descriptions of the dual-eligible Medicaid programs,
and of the types of Medicaid benefits to which these beneficiaries are entitled, see
https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/
MLNProducts/Downloads/Medicare_Beneficiaries_Dual_Eligibles_At_a_Glance.pdf. For
plans operating in the territories and not eligible for the Medicaid programs, determine
eligibility based on the definitions in the Pricing Considerations section of these instructions.
Table 1
Medicaid
Status Code
01
02
03
04
05
06
08
09

Medicaid State-Reported Code (Dual-Eligible Medicaid Program)
QMB (Qualified Medicare Beneficiary) only
QMB Plus full Medicaid benefits
SLMB (Special Low-Income Medicare Beneficiary) only
SLMB Plus full Medicaid benefits
QDWI (Qualified Disabled and Working Individual)
QI (Qualified Individual)
Full-benefit dual-eligible beneficiaries who do not have QMB or SLMB
status
Other dual-eligible beneficiaries without full Medicaid benefits—for
example, those in Pharmacy Plus and 1115 drug-only demonstrations

Other full dual (on Puerto Rico monthly file)
Unknown, including Medicaid-eligible beneficiaries reported by plans
and territories
Non-Medicaid

10
99
Blank

Classifying Dual-Eligible Data

The HPMS plan-level data also include a Medicaid pricing indicator as shown in the table
below. This table illustrates how the data for dual-eligible beneficiaries are classified as DE# or
non-DE#. The certifying actuary must consider the Medicaid cost-sharing policy for the states
or territories in the plan’s service area when determining which beneficiaries associated with
Medicaid pricing indicator “B” are in the DE# population.
Table 2
Medicaid
Pricing
Indicator
A

Dual
Eligible
Dual

CY2024 MA BPT Instructions

Category of
Dual Eligible
Medicaid
Program
QMB and QMB
Plus

Medicaid
Status Code
01, 02

Medicare CostSharing Liability
None

DE#
Status
DE#

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APPENDIX G

Medicaid
Pricing
Indicator

Dual
Eligible

Category of
Dual Eligible
Medicaid
Program

B

Dual

Other Medicaid

B
C

Dual
Non-Dual

Other Medicaid
Non-Medicaid

Medicaid
Status Code
03, 04, 05,
06, 08, 09,
10, 99
03, 04, 05,
06, 08, 09,
10, 99
Blank

Medicare CostSharing Liability
Reduced (as determined
by the certifying
actuary)

DE#
Status

DE#

Full (as determined by
the certifying actuary)
Full

Non-DE#
Non-DE#

The table below outlines the requirements for classifying dual-eligible beneficiaries that are not
QMB or QMB Plus (that is, Medicaid Pricing Indicator B: Other Medicaid) as DE# or
non-DE#. The percentages in the table below represent the number of total dual-eligible
beneficiaries relative to total members per the HPMS plan-level data.
Table 3
Medicaid Pricing Indicator /
Medicaid Status Code
A: 01, 02
B: 03, 04, 05, 06, 08, 09, 10, 99
B: 03, 04, 05, 06, 08, 09, 10, 99
C: Blank

Condition
None
<10% total dual-eligible
beneficiaries
10% to 100% total dualeligible beneficiaries
None

DE# Determination
for Base Period Data
DE#
May consider as non-DE# or
determine actual classification
Must determine actual classification
Non-DE#

BPT Values

The table below outlines the determination of certain BPT values when the certifying actuary
chooses to set the projected DE#, non-DE#, and total allowed costs all equal on Worksheet 2.
Table 4
BPT Area
WS3
WS4 IIB
WS5 II

1

Input Item
Utilization and PMPM
values
State Medicaid required
beneficiary cost sharing
(column k)
Non-DE# risk factor

10% to
90% DE#

<10% DE#
Enter non-DE# or
total values

>90% DE#
Enter non-DE# or
total values

Enter zero or
appropriate values1

Enter appropriate
values1

N/A

Enter total values

Enter total values

N/A

N/A

Plus plan cost sharing for non-covered, non-Medicaid benefits.

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APPENDIX G

The next table summarizes the determination of certain BPT values when (i) the value for the
DE# projected member months is less than 10 percent, or greater than 90 percent, of the total
projected member months and the certifying actuary chooses to separately calculate DE# and
non-DE# projected allowed costs; or (ii) the value for the DE# projected member months is
between 10 percent and 90 percent inclusive of the total projected member months.
Table 5
BPT Area
WS3
WS4 IIB
WS5 II

Input Item

Determination of BPT Values

Utilization and PMPM values

Enter non-DE# values

State Medicaid required beneficiary
cost sharing (column k)

Determine appropriate values
(including zero)2
Determine distinct non-DE#
and DE# values

Non-DE# risk factor

The table below outlines the determination of BPT values in which the requirements are the
same for all bids regardless of the percentage of DE# members.
Table 6
BPT Area
WS3
WS4 IIB
WS5 II

Input Item

Determination of BPT Values

Cost-sharing values and description

Reflect PBP package

Plan cost sharing (column f)
Non-DE# member months

CY2024 MA BPT Instructions

Default to non-DE# ratio of plan
cost sharing or override formulas
Determine distinct non-DE# and
DE# values

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APPENDIX H

APPENDIX H – MEDICAL SAVINGS ACCOUNT BPT
This appendix provides guidance for completing the Medical Savings Account Bid Pricing
Tool for Medical Savings Account (MSA) plans offered to Medicare beneficiaries. This
appendix highlights only the differences between the MSA BPT and the MA BPT.
The MSA BPT is organized as outlined below:
•
•
•
•
•

Worksheet 1 – MSA Base Period Experience and Projection Assumptions
Worksheet 2 – MSA Total Projected Allowed Costs PMPM
Worksheet 3 – MSA Benchmark PMPM
Worksheet 4 – MSA Enrollee Deposit and Plan Payment PMPM
Worksheet 5 – MSA Optional Supplemental Benefits

WORKSHEET 1 – MSA BASE PERIOD EXPERIENCE AND PROJECTION ASSUMPTIONS
(CORRESPONDING TO MA WORKSHEET 1)
SECTION I – GENERAL INFORMATION
Line 7 – Plan Type

MSA is the only valid plan type.
Line 8 – Deductible Amount

Enter the deductible amount that each beneficiary will pay for Medicare-covered benefits. The
maximum deductible for CY2024 for MSA plans can be found in the Announcement of
Calendar Year 2024 Medicare Advantage Capitation Rates and Medicare Advantage and Part D
Payment Policies.
Line 9 – Enrollee Type

This cell is pre-populated with “A/B.”

SECTIONS II, III AND IV
Base period data in Sections II, III and IV must include only Medicare-covered medical
expenses.

WORKSHEET 2 – MSA TOTAL PROJECTED ALLOWED COSTS PMPM
(CORRESPONDING TO MA WORKSHEET 2)
SECTION II – PROJECTED ALLOWED COSTS
Data in Section II must include only Medicare-covered medical expenses.

CY2024 MA BPT Instructions

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APPENDIX H

WORKSHEET 3 – MSA BENCHMARK PMPM (CORRESPONDING TO MA
WORKSHEET 5)
Follow the instructions for MA Worksheets 5 and 6 for the appropriate inputs.

WORKSHEET 4 – MSA ENROLLEE DEPOSIT AND PLAN PAYMENT (NO
CORRESPONDING MA WORKSHEET)
This worksheet calculates the MSA monthly plan revenue requirement and enrollee deposit.
Consistent with other MSA worksheets, information provided on Worksheet 4 must exclude
ESRD enrollees.

SECTION II – DEVELOPMENT OF CLAIM INFORMATION INTERVALS (PLAN’S RISK
FACTOR AND EXCLUDE SERVICES COVERED WITHIN THE DEDUCTIBLE)
Column c – Annual Projected Claim Interval

The column is pre-populated with annual projected claim intervals.
Column d – Annual Average Claim Amount

Enter the annual average claim amount paid in each claim interval.
Column e – Percentage of Member Months (Use Only the Highest Claim Interval)

Allocate total projected member months to the highest claim interval expected by members and
enter the allocation as a percentage.
For example, if projected member months for members expected to incur annual claims of
$11,500 represent 20 percent of total projected member months, and projected member months
for members expected to incur annual claims of $4,400 represent 10 percent of total projected
member months, then enter 20 percent only in the interval containing $11,500 and 10 percent
only in the interval containing $4,400. The sum of column e must equal 100 percent.
Column f – Gross Claims (PMPM)

This column calculates total allowed Medicare-covered claims on a PMPM basis for each claim
interval. No entry is required. The sum of column f must equal the total Medicare-covered
medical expenses shown in column o of Worksheet 2.
Column g – Gross Claims over Deductible (PMPM)

Enter the total allowed Medicare-covered claims on a PMPM basis over the deductible for each
claim interval expected to be paid by the MSA plan. Enter zero (0) for claim intervals below
the deductible.

SECTION III – DEVELOPMENT OF SUMMARY INFORMATION (PLAN’S RISK FACTOR)
Line a – Medicare-Covered Plan Medical Expenses PMPM

This cell displays the sum of column g of Section II.

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APPENDIX H
Line b – Non-Benefit Expenses

Enter the non-benefit expense information.
Do not leave a field blank to indicate a zero amount. If zero is the intended value, enter zero (0)
in the cell.
Line c – Gain/Loss Margin

Input the projected PMPM for the gain/loss margin for Medicare-covered services provided.
See the “Gain/Loss Margin” pricing consideration for more information regarding gain/loss
margin.
Do not leave a field blank to indicate a zero amount. If zero is the intended value, enter zero (0)
in the cell.
Line d – Total Plan Revenue Requirement

This cell is calculated automatically as the sum of projected Medicare-covered medical
expense, non-benefit expense, and gain/loss margin.
Line e – Projected Plan Benchmark

This cell displays the value from Section III, column h, line 1 of Worksheet 3—the weighted
average for the service area of the risk-adjusted ratebook values.
Line f – Projected Monthly Enrollee Deposit

This cell calculates the monthly enrollee deposit by subtracting the total plan revenue
requirement from the projected plan benchmark.
Line g – Percent of Plan Revenue Ratios

These cells calculate the ratio of medical expense, non-benefit expense, and gain/loss margin as
a percentage of revenue.
Line h – Standardized Plan Benchmark

This cell displays the value from Section III, column g, line 1 of Worksheet 3—the weighted
average for the service area of the unadjusted ratebook values.

WORKSHEET 5 – MSA OPTIONAL SUPPLEMENTAL BENEFITS (CORRESPONDING TO
MA WORKSHEET 7)
Follow the instructions for MA Worksheet 7 for the appropriate inputs.

CY2024 MA BPT Instructions

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APPENDIX I

APPENDIX I – END–STAGE RENAL DISEASE–ONLY SPECIAL NEEDS
PLANS BPT
This appendix provides guidance for completing the ESRD-SNP BPT for ESRD-SNP plans
offered to Medicare beneficiaries. This appendix highlights only the differences between the
ESRD-SNP BPT and the MA BPT.
The ESRD-SNP BPT is organized as outlined below:
•
•
•
•

Worksheet 1 – Enrollment and PMPM Revenue Projection
Worksheet 2 – Projection of benefit cost, non-benefit expenses, and gain/loss margin
PMPM
Worksheet 3 – Program Experience for Calendar Year 2022
Worksheet 4 – Optional Supplemental Benefits

WORKSHEET 1 – ENROLLMENT AND PMPM REVENUE PROJECTION
SECTION I – GENERAL INFORMATION
Follow the instructions for MA BPT Worksheet 1 for the appropriate inputs.
Line 2 – Contract-Plan-Segment

This field concatenates the contract number, plan ID, and segment ID.
Line 4 – Service Area

Enter a brief description of the service area.
Line 5 – Plan Type

“ESRD SNP” is pre-populated.

SECTION II – SERVICE AREA SUMMARY
Follow the instructions for MA BPT Worksheet 5 for the appropriate inputs.
✓ Column a – State/County Code

Similar to MA BPT Worksheet 5, enter the county codes associated with the plan’s
service area.
Technical note regarding the ESRD-SNP BPT: the rates populated in column (g) are
“state-wide” rates for dialysis and transplant statuses. Therefore, plans may enter one
county code (example: entering 05430 for California) and report the dialysis member
months and risk scores for the state in that row. Similarly, one county code may be
entered for the state-wide transplant information. In other words, the dialysis and
transplant member months and risk scores do not need to be reported at the county level.
Functioning graft rates are “county-specific,” and therefore member months and risk
scores must be reported at the county level for functioning graft status.

CY2024 MA BPT Instructions

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APPENDIX I
✓ Column d – ESRD Status (D / T / F)

Enter the ESRD status: “D” for dialysis, “T” for transplant, or “F” for functioning graft
(that is, post-graft status).
✓ Column f – Projected Risk Score

Projected risk scores must—
•
•
•
•

Be based on the data sources and their respective weights, as specified in the “Risk
Adjustment Information Sources” subsection of the “Risk Score Development for
CY2024” pricing consideration.
Reflect appropriate projection factors.
For dialysis, dialysis new enrollee, and transplant risk scores, be adjusted for
normalization using the appropriate CY2024 normalization factor.
For post-graft community, post-graft institutional, and post-graft new enrollee risk
scores, be adjusted for normalization using the appropriate CY2024 normalization
factor and reflect the appropriate CY2024 MA coding adjustment factor.

✓ Column h – Percentage of MSP Member Months

Enter the percentage of Medicare Secondary Payer (MSP) member months applicable for
the ESRD status and county/state indicated.
✓ Column i – Projected CMS Monthly Capitation

This field is calculated automatically.

SECTION III – ESRD MSP ADJUSTMENT FACTORS FOR CY (FROM APRIL
ANNOUNCEMENT)
This section contains the MSP adjustment factors released by CMS in the Announcement of
Calendar Year (CY) 2024 Medicare Advantage Capitation Rates and Medicare Advantage and
Part D Payment Policies. Line 1 contains the MSP factor for functioning graft, and line 2
contains the MSP factor for dialysis/transplant.

SECTION IV – SUMMARY DATA
Line 1 – Part C Mandatory Monthly Enrollee Premium

This amount is calculated automatically as the “Rounded MA Premium (excl. Opt. Suppl.)”
from Worksheet 2, Section III.
Line 2 – Part C Monthly Plan Revenue

This field is calculated automatically as the “Projected CMS Monthly Capitation” in section II
plus the Part C Mandatory Monthly Enrollee Premium” in line 3.
Line 3 – Part D Premium (Basic plus Supplemental) Net of Reductions

This information is obtained from Worksheet 2.
Line 4 – Plan Intention for Target Part D Basic Premium

This information is obtained from Worksheet 2.
CY2024 MA BPT Instructions

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APPENDIX I
Line 5 – Quality Bonus Rating (per CMS)

Follow the instructions for MA BPT Worksheet 5.
Line 6 – New/low indicator (per CMS)

Follow the instructions for MA BPT Worksheet 5.

WORKSHEET 2 – PROJECTION OF BENEFIT COST, NON-BENEFIT EXPENSES, AND
GAIN/LOSS MARGIN PMPM
SECTION II – PROJECTION OF REVENUE REQUIREMENT PMPM
✓ Total Benefit Cost

The benefit projection is to be consistent with the population reflected in the revenue
projections on Worksheet 1. The benefit projection may be based on a blend of trended
plan experience and other data sources.
“Total benefit cost” is developed in rows 16 through 40, columns a through d.
•
•
•

The benefit cost of Medicare-covered services includes cost-sharing enhancements.
The “Net PMPMs” for Parts B and D premium reductions are calculated
automatically as the rounded premium reductions in Section III.
“Additional services” include mandatory supplemental benefits for additional items
and services not covered by original Medicare.

The “Total benefit cost - mand. supplemental” benefits is developed in rows 16 through
40, columns e through g. The benefit cost of—
•
•

Cost-sharing enhancements are calculated automatically.
Part B, Part D basic, and Part D supplemental premium reductions and additional
services are calculated automatically as the corresponding “Net PMPM” in column d.

✓ Total Revenue Requirement

See the “Pricing Considerations” section and the “MA Worksheet 4” subsection of the
“Data Entry and Formulas” section of these Instructions for information about
non-benefit expenses (NBE) and gain/loss margin (GLM).
A sub-total of NBE plus GLM is calculated automatically in cell D50.
✓ Percentage of Revenue

The net medical cost, non-benefit expense, gain/loss margin, and NBE plus GLM, as a
percentage of revenue, are calculated automatically.
✓ CMS Capitation and Part C Mandatory Enrollee Premium

The “CMS capitation” is calculated automatically as the “Projected CMS Monthly
Capitation” from Worksheet 1, Section II.
The “Part C mandatory enrollee premium” is calculated automatically as the “Total
Revenue Requirement” minus the “CMS capitation.”

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APPENDIX I
✓

Summary of Total Revenue Requirement

In the “Summary of Total Revenue Requirement” section,—
•
•
•

•

The “Benefit Cost” of Medicare-covered benefits is calculated as the “Sub-total:
Medicare-covered services Allowed Cost” minus the “Sub-total Medicare AE cost
sharing value” in row 32.
The benefit cost of cost-sharing enhancements, additional services, and Part B
and Part D premium reductions are obtained from the “Mandatory Supplemental
Benefits” section, column g.
In the “NBE+GLM” column, “Total NBE plus GLM” (cell D50) is distributed
proportionately between Medicare-covered benefits, cost-sharing enhancements, and
additional services based on the relative proportions of the benefit expense
component of such amounts.
The “Total” revenue requirement for the Medicare-covered benefit and each type of
mandatory supplemental benefit is calculated automatically as the sum of the
corresponding “Benefit Cost” and “NBE + GLM”, if any.

For guidance on related parties, see the “Pricing Considerations” section of these Instructions.

SECTION III – DEVELOPMENT OF ESTIMATED PLAN PREMIUM
This section develops “Total estimated plan premium” and Part B and Part D premium
reductions.
Follow the instructions for MA BPT Worksheet 6 except as explained otherwise in this
appendix.
In this appendix, the term “excess funds” refers to the difference between: (i) the CMS
capitation payment (Section II, row 52), and (ii) the revenue requirement for Medicare-covered
benefits (Section II, row 55). Excess funds are calculated automatically in row 70.
To the extent “excess funds” are not needed to fund cost-sharing enhancements and additional
benefits, the MAO may allocate excess funds to Part B and Part D premium reductions. The
portion of excess funds that the MAO may allocate to Part B and Part D premium reductions is
calculated automatically in row 71 as: (i) “excess funds,” minus (ii) the revenue requirement for
cost-sharing enhancements and additional services (Section II, rows 56 and 57).
During the rebate reallocation period, the MAO may return to the target Part D basic premium
by reallocating excess funds to Part B, and Part D basic, and Part D supplemental premium
reductions in lines 1, 5b, and 6b, respectively. If necessary, the MAO may adjust the amount of
“excess funds” by adding, eliminating, or modifying cost sharing enhancements and/or
additional benefits.
Generally, the rules in effect for other MA-PD plans for changes to the funding of benefits
during the rebate reallocation period apply to reallocation of excess funds. For more information
on rebate reallocation, see Appendix E.

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APPENDIX I

WORKSHEET 3 – PROGRAM EXPERIENCE FOR CALENDAR YEAR 2022
SECTION II – CONTACT INFORMATION
Follow the instructions for MA BPT Worksheet 6.

SECTION III – REVENUES
Enter member months, CMS payments (on a PMPM basis), and enrollee premium (on a PMPM
basis) for CY2022. All revenues are to be reported on an earned basis, including retroactive
adjustments. Revenues for 2022 are to include an estimate of the final risk adjustment settlement
to be received in 2023.

SECTION IV – COMPONENTS OF REVENUE (PMPM)
Enter the paid through date for claims incurred and claims incurred in CY2022. CMS generally
expects at least 30 days of paid claims run-out; 2 - 3 months of paid claim run-out is preferable.
Medical benefits are to be reported net of enrollee cost sharing.
Enter the paid through date for and claim reserves for 2022. Organizations may allocate claim
reserves to appropriate categories in situations where reserves are developed at a consolidated
level.
For guidance on reporting non-benefit expenses and gain/loss margin, see the “Pricing
Considerations” section of these Instructions.

WORKSHEET 4 – OPTIONAL SUPPLEMENTAL BENEFITS
Follow the instructions for MA BPT Worksheet 7 for the appropriate inputs.

SUPPORTING DOCUMENTATION FOR ESRD-SNP BPTS
See Appendix B for supporting documentation requirements.
Note that item 39.2 applies to net medical expenses, that is the sum of cells D32 and D37 on
Worksheet 2.

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APPENDIX J

APPENDIX J – TRENDING RISK SCORES
This appendix includes the following considerations for developing trends for coding and
population change trends to project CY2024 risk scores:
•
•
•
•
•
•

•

•

•

•

Include the most recent annual consecutive calendar risk scores that are available.
Use raw risk scores that do not include frailty (if applicable), are not normalized, and are
not adjusted for MA coding patterns.
Reflect the same amount of run-out for diagnosis data for each year’s risk scores.
Use final risk scores from each year or apply a completion factor to the last set of scores
to approximate a final score.
Use the same cohort for each year (for example, the July cohort).
Use the same model to estimate all payment year scores. If possible, use the risk
adjustment model for the upcoming payment year or apply a conversion factor to each
payment year’s risk scores to convert to a single risk model.
◦ The model conversion factor should be bid-specific. It can be generated from the risk
scores that CMS sends to MAOs to support bidding; however, MAOs should also
consider whether other years in their trends have a different conversion factor
(for example, when the population mix differs).
◦ The conversion factor can be derived by calculating risk scores from a year under two
different models. The factor can be a ratio of the scores under each model.
MAOs should note that when converting risk scores from one model to another, a
conversion between denominator years is, more than likely, occurring also. The risk
scores in the conversion factor should be raw if the factor will be applied to an old model
raw risk score, which is then projected to the payment year.
Note: If MAOs compare scores within a single cohort, and the risk adjustment models do
not have the same denominator year, the raw risk scores should be normalized to the same
year. Otherwise, some portion of the ratio between the model risk scores will be attributed
to the more recent denominator, rather than a difference in predicted risk.
Divide cohorts into meaningful subgroups using the same considerations used to
determine allowed costs and project enrollment in each subgroup to the payment year.
◦ Weight subgroup risk scores by enrollment in each subgroup per year to determine
annual risk scores for trending.
Compare year over year risk scores to obtain a trend factor. Unless the MAO is
anticipating changes in coding efforts or population characteristics, more than two years
of risk scores will help minimize the effect of random changes in coding patterns and
enrolled population. If deviations from previous trend are expected in the payment year,
provide justification for such changes in the supporting documentation.
◦ If starting with base year risk scores that are blended, MAOs are to assess whether
there are bid-specific risk score trends unique to each model and adjust their overall
trend accordingly.
◦ Use this trend factor to project from base period risk scores to payment (contract) year
raw risk scores.

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APPENDIX K

APPENDIX K – DATA AGGREGATION EXAMPLES
This appendix includes examples for aggregating base period experience on Worksheet 1 of the
MA Bid Pricing Tool (BPT).
Example 1: Formal Crosswalk

An MAO offers non-segmented plans 001, 002 and 003 in CY2022 and CY2023 and offers
non-segmented plans 002 and 003 in CY2024. Plan 001 is consolidated and the membership is
formally crosswalked into plan 003 for CY2024 in accord with the limited exceptions described
in CMS annual renewal and non-renewal guidance. Base period experience must be reported on
Worksheet 1 of the CY2024 BPTs as follows:
•
•

For plan 002, report aggregate base period experience for plan 002 (Rule 1 and Rule 3).
For plan 003, report base period experience for plans 001and 003 (Rule 1 and Rule 3).

Example 2: Formal Crosswalk and Enrollment Shift

An MAO offers non-segmented plans 001, 002, and 003 in CY2022 and CY2023 and offers
non-segmented plan 003 and new non-segmented plan 004 in CY2024. Plan 001 is consolidated
and the membership is formally crosswalked to plan 003 for CY2024 as submitted in HPMS.
Plan 002 is terminated for CY2024 and the certifying actuary expects the membership in
plan 002 to enroll evenly between plan 003 and plan 004; however, there is no formal crosswalk
or approved crosswalk exception in place. Base period experience must be reported on
Worksheet 1 of the CY2024 BPTs as follows:
•
•

For plan 003, report base period experience for plans 001and 003 (Rule 1 and Rule 3).
For plan 004, do not report base period experience (Rule 2). Data aggregation is not
allowed.

Example 3: PFFS Non-Network/Net-work County Reclassification

An MAO offers PFFS non-network plan Hxxxx-001 and PFFS full network plan Hyyyy-001 in
both CY2022, CY2023 and CY2024. However for CY2023, county A in Hxxxx-001 is
reclassified from non-network to full network and is moved from the service area of Hxxxx-001
to the service area of Hyyyy-001. The proportion of Hxxxx-001 members in county A that are
moved to Hyyyy-001 via MARx enrollment transactions under an approved crosswalk exception
is greater than the MA level of significance determined by the certifying actuary.
Also, for CY2024, county B in Hyyyy-001 is reclassified from full network to non-network and
is moved from the service area of Hxxxx-001 to the service area of Hxxxx-001. In this case, the
proportion of Hyyyy-001 members in county B that are moved to Hxxxx-001 via MARx
enrollment transactions under an approved crosswalk exception is less than the MA level of
significance. Base period experience must be reported on Worksheet 1 of the CY2024 BPTs as
follows:
•
•

For Hxxxx-001, report base period experience for Hxxxx-001 (Rule 2 and Rule 3). Data
aggregation is not allowed.
For Hyyyy-001, report aggregate base period experience for plans Hxxxx-001 and
Hyyyy-001 (Rule 1 and Rule 3).

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APPENDIX K
Example 4: Crosswalks in Successive Years

In CY2022, an MAO offers non-segmented plan 001 with 100 members and non-segmented plan
002. For CY2023, 50 members stayed in plan 001 and 50 members were crosswalked to plan 002
via MARx enrollment transactions. For CY2024, 25 members stay in plan 001, and 25 members
are crosswalked to plan 002 via MARx enrollment transactions. The certifying actuary sets the
MA level of significance at 60 percent.
Members in plan 001 are crosswalked as shown in the table below.

CY2022

CY2023

CY2024

Plan 001 Members
Remaining in Plan 002

County A

25 in plan 001

25 in plan 001

25 in plan 001

N/A

County B

25 in plan 001

25 in plan 001

25 →plan 002

25

County C

50 in plan 001

50 →plan 002

50 in plan 002

50

Total

100

75

The proportion of plan 001 members in plan 002 for CY2024, resulting from both the CY2023
and CY2024 crosswalks is 75/100 or 75 percent. Since such percentage is above the 60-percent
threshold established by the certifying actuary, base period experience must be reported on
Worksheet 1 of the CY2024 BPTs as follows:
•
•

For plan 001, report base period experience for plan 001. (Rule 3)
For plan 002, report base period experience for plan 001 and plan 002. (Rule 1, Rule 3,
and Rule 4)

Example 5: Service Area Reduction

An MAO offers non-segmented plans 001 and 002 in CY2022 and plan 002 in CY2024. Plan 001
is consolidated and the membership is formally crosswalked to plan 002 for CY2023. For
CY2024, the service area for plan 002 is reduced to remove most of the counties that plan 001
formerly covered, and an insignificant proportion of the members who were formerly in plan 001
remain. The certifying actuary sets the MA level of significance at 40 percent.
Members in plan 001 are crosswalked as shown in the table below.
CY2022

CY2023

CY2024

Counties A…C

200 in plan 001

200 →plan 002

→0 in plan 002

County D

100 in plan 001

100 →plan 002

100 in plan 002

Total

300

CY2024 MA BPT Instructions

100

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APPENDIX K

The proportion of plan 001 members remaining in plan 002 after taking into account the CY2023
crosswalks from plan 001 to plan 002 and the CY2024 service area reduction for plan 002 is
100/300 or 33 percent. Since such percentage is below the 40-percent threshold established by
the certifying actuary, base period experience must be reported on Worksheet 1 of the CY2024
BPTs as follows:
•

For plan 002, report base period experience for plan 002 (Rule 2 and Rule 4). Data
aggregation is not allowed.

Example 6: Service Area Expansion and Service Area Reduction

Plan 001 covers counties A through Y in CY2022 and undergoes an exception-based crosswalk
in CY2023 via MARx enrollment transactions, whereby counties B through Y are crosswalked to
plan 002 and county A is not.
Plan 002 undergoes a service area reduction in CY2024 whereby counties B through X are
terminated. Plan 002 also undergoes a service area expansion with new county Z—an expansion
that does not involve an exception based crosswalk because the MAO does not currently offer a
plan in county Z. Therefore, only counties Y and Z are in the service area of plan 002 for
CY2024.
The certifying actuary sets the significance threshold at 25 percent.
Members in plan 001 and plan 002 are crosswalked as shown in the table below.

CY2022

CY2023

CY2024

CY2024 Plan 001
Members Remaining
in Plan 002

County A

200 in plan 001

200 in plan 001

200 in plan 001

N/A

Counties B...X

500 in plan 001

500 →plan 002

→0 in plan 002

0

County Y

300 in plan 001

300 →plan 002

300 in plan 002

300

Total

1000

300

The proportion of plan 001 members in the plan 002 bid for CY2023, resulting from the CY2023
and CY2024 crosswalks and the CY2024 service area reduction for plan 002 is 300/1,000 or 30
percent. Since such percentage is above the 25-percent threshold established by the certifying
actuary, base period experience must be reported on Worksheet 1 of the CY2024 BPTs as
follows:
•
•

For plan 001, report base period experience for plan 001 (Rule 3). Data aggregation is not
allowed.
For plan 002, report base period experience for plan 001 and plan 002 (Rule 3 and
Rule 4).

Example 7: Plan Segmentation

An MAO offers non-segmented plan Hxxxx-001 in both CY2022 and CY2023. For CY2024, the
MAO creates plan Hxxxx-003 (via a crosswalk exception to map plan Hxxxx-001 to Hxxxx-003)
and Hxxxx-003 is segmented into bids Hxxxx-003-001 and Hxxxx-003-002. Further, county A in

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APPENDIX K

Hxxxx-001 is moved to the service area of Hxxxx-003-001 and county B is moved to the service
area of Hxxxx-003-002. The certifying actuary sets the MA level of significance at 35 percent.
Members in Hxxxx-001 are crosswalked at the plan level via HPMS and are moved to
Hxxxx-003-001 and Hxxxx-003-002 via MARx enrollment transactions, as shown in the table
below.
CY2022

CY2023

CY2024

County A

60 in Hxxxx-001

60 in Hxxxx-001

60 →Hxxxx-003-001

County B

40 in Hxxxx-001

40 in Hxxxx-001

40 →Hxxxx-003-002

Total

100

The proportion of plan Hxxxx-001 members in the Hxxxx-003-001 bid for CY2024 resulting
from the CY2024 crosswalk is 60/100 or 60 percent, and the proportion of plan Hxxxx-001
members in the Hxxxx-003-002 bid for CY2024 resulting from the CY2024 crosswalk is 40/100
or 40 percent. Since both percentages are above the 35-percent threshold established by the
certifying actuary, base period experience must be reported on Worksheet 1 of the CY2024 BPTs
as follows:
•
•

For Hxxxx-003-001, report base period experience for Hxxxx-001. (Rule 1 and Rule 3).
For Hxxxx-003-002, report base period experience for Hxxxx-001. (Rule 1 and Rule 3).

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According to the Paperwork Reduction Act of 1995, no persons are required to respond
to a collection of information unless it displays a valid OMB control number. The valid
OMB control number for this information collection is 0938-0944. The time required to
complete this information collection is estimated to average 30 hours per response,
including the time to review instructions, search existing data resources, gather the data
needed, and complete and review the information collection. If you have comments
concerning the accuracy of the time estimate(s) or suggestions for improving this form,
please write to: CMS, 7500 Security Boulevard, Attn: PRA Reports Clearance Officer,
Mail Stop C4-26-05, Baltimore, Maryland 21244-1850.

CY2024 MA BPT Instructions

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