CMS Pub. 100-16, ch. 4, § 100.5

Rewards and/or incentives may not be offered in the form of cash or monetary rebates,

including reduced cost-sharing or premiums. Otherwise, MAOs have considerable

flexibility with regard to what may be offered as a reward or incentive.

Gift cards are a permissible form of reward or incentive as long as they are not

redeemable for cash. MA plans are encouraged to offer enrollees a choice of gift cards

from which to choose in order to account for differences in enrollees’ preferences and

accessibility of retailers.

Discount coupons are also a permissible form of reward or incentive as long as they are

not transferable for cash and follow the valuing guidelines addressed above. However,

we would note that coupons that provide only nominal discounts may not provide

adequate incentive to drive the intended changes in enrollee behavior and thus not align

with CMS valuing guidelines.

An RI Program that is designed so that enrollees earn “points” or “tokens” that can be

used to “purchase” rewards (or some variation of this type of program) is permissible as

long as the “points” and the rewards that may be “purchased” are earned and valued

(according to CMS guidelines as set forth within this guidance and in accordance with

§422.134) and are redeemed during the contract year in which they are earned.

Rewards and/or incentives must be tangible items that align with the purpose of the RI

Program and must directly benefit the enrollee. For example, a plan’s charitable

contribution made on behalf of the enrollee does not satisfy the CMS criteria as a

permissible reward or incentive because the enrollee who earned the reward does not

benefit from such a contribution by the plan. However, the use of points (which are not

themselves tangible), to purchase a reward, does satisfy CMS criteria because the points

are used by each enrollee to obtain a tangible reward that is of value to the enrollee.

Rewards and/or incentives that are to be won based on probability, including programs

in which an enrollee may earn entries into a lottery or drawing in order to receive a

reward or incentive of a significant value, are not permissible because all enrollees who

participate in and complete the services or activities required of them within the RI

Program’s design must receive a tangible reward and incentive. The potentially

negligible chance of winning the reward in such a scheme (depending on the pool of

eligible enrollees) does not qualify as a tangible reward or incentive. Furthermore, RI

Programs structured in this manner are potentially vulnerable to fraud and abuse

implications.