The Centers for Medicare & Medicaid Services (CMS) unveiled changes to the network adequacy application process for Medicare Advantage (MA) organizations. Whether you’re involved in compliance, market expansion, provider recruitment, or network management, these updates are crucial. Let’s break down these changes to help you understand the new process.
Overview of Network Adequacy Changes for CY 2026 Applications
For the CY 2026 applications, CMS has introduced a few updates:
- New Facility Specialty Type: Outpatient Behavioral Health. Learn more about this specialty type and how it impacts your application.
- Exception Requests: Facility-Based I-SNP Exception Requests. Discover the details of these exceptions here.
- Letters of Intent: New operational instructions for network submissions are provided. Read our comprehensive guide on using Letters of Intent.
CMS CY 2026 Application Key Dates for MA and Part D
CMS Network Adequacy Submission and Review
HSD Table Submission
To apply for an initial contract or service area expansion, you must demonstrate that your proposed provider network meets network adequacy requirements for providers and facilities within the designated time and distance standards. Here’s what you need to know:
- Submit Health Service Delivery (HSD) Tables: Your provider and facility HSD tables must be uploaded to the Network Management Module (NMM) of the Health Plan Management System (HPMS). CMS will review these tables to determine if the provider network meets the requirements.
- Two Separate HSD Tables: Remember, you must upload two separate HSD Tables—one for contracted providers and one for contracted facilities.
- Timelines: The network must be adequate a year before it goes live. As a result, CMS allows two allowances.
P.S. If you prefer video, watch this YouTube Video instead.
MEDICARE ADVANTAGE APPLICATION CHANGES
Scott Westover, SVP of Network and Regulatory Strategy at Quest Analytics, explains what the new network adequacy rules mean for Medicare Advantage Organizations.
Two Application Allowances
Building a compliant network a year ahead of the contract year is no small feat. Recognizing the time and effort required, CMS offers two allowances to help you meet network adequacy requirements during the application process.
Application Allowance 1: 10% Application Credit
Applicants can leverage the 10-percentage Point Credit towards the percentage of beneficiaries residing within the published time and distance standards for new or expanded service area applicants.
It’s important to note that the Application Credit only applies during the application process. Once the contract is live, the credit will no longer apply. You must meet full network adequacy requirements for the entire service area, beginning January 1 of the contract year.
Key Takeaways: Using the Application Credit
- The 10% credit will be automatically applied in HPMS and reflected on the MA organization’s Automated Criteria Check report.
- The 10 percent credit is in addition to other credits such as the Telehealth or Certificate of Need (CON) credits, if applicable.
- Once the contract is live, the credit will no longer apply.
- The MA organization must meet full network adequacy requirements for the entire service area, beginning January 1 of the contract year.
💡 Tip: Use Quest Enterprise Services® Medicare Advantage 10% Credit for Application Counties to quickly assess network adequacy for your proposed counties with the new 10% application credit today.
Application Allowance 2: Letters of Intent to Contract
Applicants can use a Letter of Intent (LOI) to contract in place of a signed provider contract during the application phase to meet network standards. The intention is to give initial applicants and those seeking to expand into a new market the opportunity to reach the threshold for network adequacy while still finalizing contract details.
Important Considerations for MA organizations Using Letters of Intent
When using a Letter of Intent, it’s important to keep two key aspects in mind.
Conversion into Full Contract by January 1
Ensure that Letters of Intent are fully executed contracts before January 1, of the go-live date.
Participation in the Triennial Review
When you use Letters of Intent for the application of a new or expanded service area you must participate in a CMS Triennial Network Adequacy Review the first year the plan is operational in its new service area.
Key Takeaways: Using Letters of Intent
- The Letter of Intent is only for Initial or Service Area Expansion counties.
- You want to have a process and plan to assess your network for compliance regularly and after every mid-year termination.
- Don’t underestimate the effort and time required to convert to a full contract.
3 Steps to Help You Prepare for Your Medicare Advantage Application
Step #1: Review and Validate the Provider Network
Before your network submission, it’s essential to review your data. Pay special attention to the new behavioral health specialties in your HSD tables. Make sure they’re accurately listed and that your network meets the requirements for network adequacy.
Step #2: Ensure HSD Tables and Provider Directories Match
To avoid data discrepancies or compliance issues, ensure that your provider directories and HSD tables match. Take the time to compare and cross-check the data in both sources. This way, you can be confident that your provider directories accurately reflect the information listed in your HSD tables.
Step #3: Limit Provider Locations in HSD Tables
Limit each provider to 5 to 10 locations in listings. This guideline addresses CMS’s scrutiny of providers with too many listings.
Maximize Your Service Area Expansion Goals with Quest Enterprise Services®
Responding to the changes introduced by CMS is essential for the continued success and growth of your Medicare Advantage products. Effectively navigating these regulatory updates enables strategic expansion while maintaining high standards of provider accessibility and patient satisfaction.
Quest Enterprise Services® (QES®) supports your strategic initiatives by providing an innovative platform to streamline your expansion and application processes. With our industry-renowned Network Adequacy template, Network Adequacy Exceptions Package, and Provider Data Accuracy tools, QES is your partner in building and maintaining compliant, sustainable provider networks. Contact us today and discover how our solutions and team can help you achieve your goals.
More Medicare Advantage Resources
Proven Solutions for Your Provider Network Management
Looking to simplify your workload? Let Quest Analytics take on the heavy lifting! Our solutions and dedicated team specialize in provider data accuracy and provider network adequacy for various lines of businesses, including Medicare Advantage, Medicaid and Commercial. Schedule a strategy session today and see how we can help you every step of the way.
