CMS Pub. 100-16, ch. 4, § 70

The guidance in this section applies to non-employer MA plans, including SNPs. CMS

may review employer plans for low enrollment in future years.

Pursuant to 42 CFR §422.514, CMS may not enter into or renew an MA contract with an

organization unless the organization has enrollment of at least:

(1) 5,000 individuals (or 1,500 individuals if the organization is a PSO)

are enrolled for the purpose of receiving health benefits from the

organization; or

(2) 1,500 individuals (or 500 individuals if the organization is a PSO) are

enrolled for purposes of receiving health benefits from the organization and

the organization primarily serves individuals residing outside of urbanized

areas as defined in §412.62(f) (or, in the case of a PSO, the PSO meets the

requirements in §422.352(c)).

However, a waiver of this enrollment may be provided at the time of an initial contract or

for the first three years the MA plan is offered. CMS will consider the experience of the

organization, its management personnel and its providers; the administrative and

marketing abilities of the organization; and the financial solvency and resources of the

organization in determining whether the organization is capable of administering and

managing an MA contract and is able to manage the level of risk required under the

contract to grant a waiver.

As provided under 42 CFR §422.506(b)(1)(iv), CMS may non-renew MA plans that have

an insufficient number of enrollees to be considered a viable plan option. Prior to bid

submission, CMS annually provides MAOs with criteria CMS uses to identify low

enrollment plans and contacts those MAOs that offer plans in the current contract year

that are identified as having low enrollment. The MAOs are instructed to either give

notice that they are terminating or consolidating the low enrollment plan(s), or submit,

within acceptable timeframes, a justification for continuing the plan(s). CMS will review

the submitted justifications and make a final decision on the continuation of the plan(s)

for the next contract year.

Determining whether an MA plan has sufficient enrollment to remain or be a viable plan

option each year requires consideration of many factors, including overall enrollment in

the MA program and enrollment in individual plans. CMS will announce in the spring its

interpretation and parameters for applying the regulation. These will take into account,

in addition to enrollment, the following:

• The number of years the plan has been in operation; and

• Whether the plan is a SNP.