Mar 26 2019 | Thought Leadership | By

Thinking of Starting a Medicare Advantage Plan? 2021 Starts Now

Provider-sponsored health plans and Medicare Advantage are gaining traction as a critical strategy for profitable, value-based care. However, many provider organizations underestimate the necessary lead time and effort required to move from consideration to activation. Planning for a 2021 launch needs to begin now starting with a detailed market and organizational feasibility study for standing up a health plan.

In recent years, due to increasing cost pressures and competition among providers, many organizations have expressed their ambitions to develop their own health plans, often referred to as provider-sponsored health plans (PSHPs). Medicare Advantage (MA) is often considered the entry point of choice due to government financial incentives and strong opportunities to drive improvements in both quality and total cost of care for an increasingly aging population. Coupled with surging consumer preference for the program due to attractive benefits, it’s no surprise that many organizations are interested. However, because of competing priorities, many executives struggle to carve out the necessary time to truly evaluate the opportunity. At Lumeris, we believe the time is right to look at MA—in terms of the political landscape and the surprisingly lengthy lead times required to assess and apply. This means for those that consider an MA plan as part of their future strategy, that process should start no later than today.

Let’s take note of current Medicare trends that have continued to build momentum in the market to date:

As Medicare continues to grow and CMS seeks to control costs, providers can expect a doubling down of population health and a need for health systems to capture a larger share of the premium dollar. MA has always been a critical aspect of organizations’ population health strategy, and with demographic shifts and new innovations, we believe that need and opportunity has only strengthened.

Many providers have recognized the opportunity present through MA and thus have been preparing for a migration up the Medicare food chain. There are different ways for organizations to accomplish this and share significantly more of the premium dollar: launch their own MA plan and accept full risk (and reward), or identify and partner with a collaborative payer in the market.

Several of these organizations have been developing the necessary competencies by establishing risk-bearing Accountable Care Organizations (ACOs) through CMS or accepting delegated risk. But many of these provider organizations have been confronted with familiar dilemmas. What are the next steps as these ACO agreements transition in the new Pathways to Success program or wind to a close? If launching an MA plan is a couple years down the road, when is the right time to start the “two years from now” process?

The MA application process differs greatly from the Medicare ACO application process and it requires significantly more lead time. This is a significant undertaking with great opportunity, and large risk. It requires in-depth analysis, planning, and the necessary time to align organizational strategy.

The Notice of Intent to Apply for a 2021 Medicare Advantage contract is due in mid-November 2019. However, the real work should begin much earlier than that. A candid evaluation of whether your organization is ready to run its own health plan takes time and thoughtful consideration. And the question isn’t simply just “Can we?” Of equal importance is “Should we? Will the market support it? How will competitors, both payers and providers, respond? How collaborative are our existing payers? Will we need partners or help? What kind of optionality should we be considering and planning for?”

Organizations legitimately contemplating starting an MA plan must take a deep dive to assess their organizational and network readiness, scope out their competitive landscape, and determine not only the overall opportunity present in the market but the viability of their organization being able to capitalize on it. We at Lumeris call this a PSHP Feasibility Study, and it’s a crucial first step to setting the wheels in motion for a successful and targeted health plan application and development process.

Key deliverables of a PSHP Feasibility Study include:

  • Market Assessment;
  • Prospective Partner List;
  • Network Adequacy Analysis;
  • Go-To Market Product and Network Structure;
  • Target Market Landscape and Competitive Positioning Strategy;
  • Organizational Readiness; and
  • Financial Pro Forma.

Armed with an honest assessment of the critical factors to successfully stand up and operate a health plan, organizations not only better understand their readiness but are also able to act immediately to implement any necessary improvements. Providers should be aware of specific opportunities available, and precisely what it will take for them to operationalize them.

As a result of this PSHP Feasibility Study, the executive team will be better informed for the ultimate decision as to whether they should pursue an MA plan. Should a “go” decision result, progressive organizations should then work to develop an implementation plan in tandem with the application process. While the development of a health plan has never been considered easy, this only underscores just how much preparation many successful organizations undergo.

With so many competing initiatives, it can be easy to overlook or delay the analysis of your organization’s MA opportunity. However, we contend that with the market dynamics, regulatory initiatives, and continued demographic evolution, it has never been more important to assess this opportunity—and that process needs to start soon if organizations want options for 2021.

After all, with the amount of current interest in MA, that opportunity might not be around for your organization forever.

Projected 2021 Launch Schedule*


PSHP Feasibility Study and Readiness Assessment


Notice of Intent to Apply (NOIA) deadline

November 2019

CY 2019 applications posted by CMS

January 2020

CY 2019 plan application deadline

February 2020

Bid submission to CMS

June 2020

Contracts executed

August/September 2020

Annual enrollment period (AEP)

October-December 2020

Plan go-live

January 2021

*Schedule subject to change based on CMS program requirements.

To learn more about conducting a Feasibility Study for your organization, please contact Dan Juberg at

Not sure where to start? Talk to one of our advisors.

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