CMS delayed the Medicare Advantage unused benefits notification policy, scheduled for implementation on January 1, 2026, in response to industry concerns and practical challenges. It affects over 33 million Medicare Advantage Plan subscribers and is a significant policy reversal on which healthcare stakeholders must be very clear.
What Was the Medicare Advantage Notification Policy?
CMS Medicare Advantage unused benefits notice policy was finalized in April 2024 in the Contract Year 2025 Medicare Advantage and Part D Final Rule. Prior to this, the policy was mandatory on Medicare Advantage entities to issue personalized "Mid-Year Enrollee Notification of Unused Supplemental Benefits" in a 30-day span from June 30 through July 31 every year for every enrollee.
Such cautions would have comprised:
- Complete record of unused supplementary benefits from 1st January until 30th June
- Comprehensive listing of each benefit available
- Cost-sharing agreements for covered benefits
- Instructions on claiming benefits
- Network provider details
- Customer service contact information
Why CMS Delayed the Policy
CMS on September 8, 2024, extended indefinitely a Medicare Advantage unused benefits notification rule for contract year 2026 and forward. It cited several factors:
1. Industry Feedback:
Medicare Advantage plans expressed concerns about their ability to accurately track supplemental benefit utilization and generate personalized notifications.
2. Implementation Issues:
Plans identified not having systemwide monitoring on who among those enrolled in the first half of a year had received a particular supplemental benefit.
3. Logistical Concerns:
CMS noted that organizations needed further guidance on technical details and implementation procedures.
Both moratoriums offer short-term relief to Medicare Advantage entities while drawing focus on continuing concerns in benefit specificity and tracking of use.
The Financial Scale of Medicare Advantage Supplemental Benefits
Delay in the policy is imperative considering the massive outlay on supplementary benefits. Taxpayers are currently providing an estimated $86 billion in 2024 to Medicare Advantage plans solely for supplementary benefits, 17% of payments to such plans.
| Year | Supplemental Benefits Funding | Growth Rate |
|---|---|---|
| 2018 | $21 billion | Baseline |
| 2024 | $86 billion | +309% |
| Total (2014-2024) | $337 billion | Cumulative |
This rapid growth reflects further focus on supplementary benefits as a differentiator for Medicare Advantage plans.
Widespread Underutilization of Available Benefits
Studies repeatedly demonstrate high levels of underutilization in several benefit areas, the very problem the CMS Medicare Advantage unused benefits notification policy set out to correct:
1. Over-the-Counter Advantage:
Research shows that 70% of over-the-counter benefits are not taken annually, resulting in around $5 billion in benefits not being taken each year.
2. Dental and Vision Benefits:
Despite both being included in over 90% of Medicare Advantage plans, only 54% of beneficiaries are aware they have dental and vision benefits.
3. Transportation and Wellness Programs:
Non-medical supplementary benefits for social determinants of health also possess low uptake rates despite their reasonable impact on health.
For healthcare entities that cater to Medicare Advantage patients, such utilization patterns are wasted opportunities for patient care and maximizing revenues through services such as healthcare revenue cycle management services.
Impact on Healthcare Providers and Revenue Cycle Management
The CMS Medicare Advantage unused benefits notification policy delay poses challenges as well as opportunities for healthcare providers:
1. Patient Education Deficit:
Without standardized notices, organizations must expressly notify patients of available supplemental benefits, particularly those related to preventive care and specialty services.
2. Revenue Optimization:
Healthcare practice can enhance financial performance by educating patients regarding benefits covered, minimizing denials, and enhancing collection rates through exhaustive medical billing services.
3. Administrative Burden:
As the holdback decreases near-term compliance burdens, coverage might need to establish in-house procedures for notification to patients of applicable benefits.
Firms who are specialists in medical account receivable services as well as denial management services understand the complexity of Medicare Advantage benefit designs and are ready to streamline reimbursement while ensuring patients have the highest coverage value.
Implementation Challenges That Led to the Delay
Medicare Advantage plans faced various technical and practice challenges that contributed to the policy lag:
1. Data Integration Needs:
Boards needed sophisticated systems to track benefit utilization in different categories simultaneously, for example, dental, vision, hearing, fitness, over the counter, transportation, and other supplementary benefits.
2. Personalization Complexity:
Each notification required customization based on individual enrollee usage patterns, demanding integration between claims processing systems and member communication platforms.
3. Timing Pressures:
The tight July shipping window overlaid against peak summer schedules and annual enrollment preparations presented operational challenges.
4. Compliance Risks:
Institutions without proper technical infrastructure were subject to penalties for improper notifications or deadlines.
For health organizations who are working with organizations such as Human Medical Billing who provide fully integrated AI medical billing solutions, a consideration of such technical matter sheds light upon the complexity of Medicare Advantage administration and the benefit of seasoned partners in working through requirements.
Current State of Medicare Advantage Supplemental Benefits
Supplementary benefits in Medicare Advantage plans have grown massively in recent years:
1. Range of Benefits:
More than 99% of the Medicare Advantage plans in 2022 included at least one of the supplemental benefits, and the average plan included 23 different benefits.
2. Most Common Benefits:
Vision (offered by 95% of plans), hearing aids (90%), fitness programs (88%), and dental services (85%) represent the most frequently available supplemental benefits.
3. Specialized Plans:
Special Supplemental Benefits for the Chronically Ill (SSBCI) are no longer asked to demonstrate prospects for health improvement through evidence-based research, echoing CMS's emphasis on benefits not sales aids.
Medical credentialing service providers and medical code service providers must familiarize themselves with the benefit arrangements to enable efficient patient care coordination with accurate billing.
Industry Response and Future Outlook
CMS's deliberate pace in implementing the Medicare Advantage unused benefits notice rule reflects larger Medicare Advantage program administration problems:
1. Plan Adaptation:
Medicare Advantage plans are investing the extra time in building technical infrastructure and tracking capabilities for data.
2. Regulatory Uncertainty:
As no specific deadline was specified for review, plans must plan for future implementation in addition to current operations.
3. Alternative Methods:
Certain organizations are voluntarily adopting benefit use notifications to enhance member utilization and performance.
Transition provides healthcare professionals an opportunity to develop in-house methods for communicating available benefits to Medicare Advantage patients in a manner that may enhance patient satisfaction and clinical performance.
What Healthcare Practices Should Do Now
Healthcare organizations can do the following proactive things until the notification plan is stalled:
1. Patient Education:
Establish in-house protocols for educating Medicare Advantage patients on available supplemental benefits on a regular office visit basis.
2. Revenue Cycle Optimization:
Align with seasoned medical billing services experts who are familiar with Medicare Advantage benefit designs and attain peak reimbursement.
3. Technology Investment:
Invest in patient benefit use tracking systems and in identifying where to invest for enhanced care coordination.
4. Education of staff:
Educate staff on common Medicare Advantage supplemental benefits so they can refer patients to the appropriate services.
5. Staff Training:
Complement your staff with skilled experience in finding your way through Medicare Advantage intricacies while optimizing practice revenues and patient care.
Organizations like Human Medical Billing provide valuable experience in handling Medicare Advantage complexity in a way that sustains superior patient care and practice revenues.
The Broader Medicare Advantage Landscape
This notification policy holdup takes place in a larger Medicare Advantage program expansion and development context:
1. Enrollment Growth:
More than 33 million Medicare Advantage plan beneficiaries are currently enrolled, including more than 54% of eligible Medicare individuals.
2. Payment Issues:
MedPAC reports Medicare pays 122% to Medicare Advantage plans in contrast to fees in traditional Medicare, or $83 billion higher spending in 2024.
3. Regulatory Review:
CMS continues to finalize numerous oversight projects, such as health equity analysis requirements and prior authorization reforms.
Providers must stay current on these fluctuating policies in a way that meets Medicare Advantage patients adequately while remaining operationally productive.
Technology and Data Management Implications
These technical problems through which the policy lag resulted are important aspects for healthcare organizations to note:
1. Data Integration Needs:
Medicare Advantage patient administration needs to accommodate data monitoring of a number of benefit areas and use patterns.
2. Communication Infrastructure:
Notification exchange is aided through technology that can identify opportunity for patient benefit and provide proper notification.
3. Compliance Monitoring:
Organizations must have efficient mechanisms for proper benefit tracking and proper patient guidance.
Such sophisticated revenue cycle and AI medical billing companies are well-acquainted with these technical details and assist healthcare entities through Medicare Advantage intricacies successfully.
Long-term Policy Implications
CMS Medicare Advantage unused benefits notification policy delay could indicate Medicare Advantage oversight expansions in a larger sense:
1. Administrative Burden Balance:
CMS faces a balance of forward-thinking regulatory oversight objectives with practical implementation considerations for Medicare Advantage entities.
2. Development of Technology:
Time is allowed for industry-wide technological advances which might render future notification requirements more practical.
3. Benefit Design Evolution:
Medicare Advantage plans may voluntarily augment benefit communication and use tracking to demonstrate value and stave off subsequent regulations.
All healthcare organizations must monitor these developments and carefully consider how they may impact patient care and practice business.
Conclusion
CMS Medicare Advantage unused benefits notification delay policy decreases near-term compliance burden but denies millions of Medicare Advantage beneficiaries the opportunity to utilize available supplemental benefits. Providers can fill the gap with proactive patient education, superior outcome, and peak revenue optimization. Because $86 billion is on the table, getting these benefits utilized is critical. Consultation with experts such as Human Medical Billing makes Medicare Advantage complexity navigation and patient value optimization possible.
