A Guide to Medicare Advantage Bids with Duncan Reece
TL;DR: We sat down with Duncan Reece to discuss best practices and how-tos related to navigating the Medicare Advantage bids process. We covered a range of topics, from understanding the bid cycle to understanding how your customer buys. This discussion was inspired by Duncan’s original three part series: ‘Getting Dibs on (MA) Bids’. You can check out those articles here: Part 1; Part 2 & Part 3.
Below is a summary of our conversation.
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Table of Contents
Selling into Medicare Advantage & the MA Bid Cycle
- Principal 1: Understand your customer’s business
- Principal 2: Understand the bid cycle
- Principal 3: Understand how your customer buys
Q&A
- Q1: How can a startup navigate the bid process and insert themselves into the process? When does a startup need to go through the bid process as a provider versus being added to the network?
- Q2: How can proposals to payers be structured to make them beneficial and address administrative versus care coordination fees?
- Q3: How do plans think about bringing in a provider on a value-based contract and growing membership?
- Q4: Should a startup go through a quality improvement program to sign up payers or focus on the bid process?
- Q5: How can the ROI be visualized when focusing on specific HEDIS metrics?
- Q6: How can the cost of services be justified to payers and what is the pricing process for clinical programs?
- Q7: How effective is going off-cycle and partnering with another company to gain faster access to an MA plan?
- Q8: What are best practices and potential pitfalls in structuring ongoing relationships with payers?
- Q9: What impact will the phased-in changes to risk adjustment have on bidding processes, and have payers provided any real-time input on the impact?
- Q10: What observations can be made from public market company earnings transcripts regarding risk adjustment and its potential impact on premium relationships with providers?
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Selling into Medicare Advantage & the MA Bid Cycle
Medicare Advantage plans are highly complex, often opaque organizations that can take years to map out and understand – making it difficult for digital health startups looking to work with these MA plans to navigate the industry.
At the end of the day, this all relates to selling to a customer – in this case that customer is a Medicare Advantage organization/plan. It is crucial to understand the basics of the MA bid process before you start packaging your solution and having coherent conversations.
Below we dig into three overarching principles folks should understand as they navigate this process:
- Principal 1: Understand your customer’s business
- Principal 2: Understand the bid cycle
- Principal 3: Understand how your customer buys
Let’s get to it!
Principle 1: Understand your customer’s business
The bid cycle all comes down to understanding how MA plans make money and what are the levers to pull to make an impact on that formula:

Once you understand this formula, you can start to break it down further into the levers an MA plan can pull. That allows you to identify where your organization can impact elements of the formula to help an MA plan be successful.
Check out what’s behind some of those levers in the chart below.

Principle 2: Understand the bid cycle
The bid cycle is an underwriting process for MA plans, but the implications of the choices made are all about growth and attracting more members through better pricing. The pricing strategy of your plan greatly influences member attraction. By optimizing the formula and offering a cost-effective pricing structure, more individuals will sign up for the plan.
When it comes to understanding the bid cycle, there are two questions you should be asking yourself:
- What is the timeframe of the bid cycle?
- What are an MA organization's considerations and strategies to deploy?
Familiarize yourself with the business process and understand when it is easiest or hardest to work with the plan.
- Timing is crucial in interactions to avoid unproductive efforts and temporary solutions. As such, gaining a comprehensive understanding of the business process and identifying optimal collaboration periods is important.
- Be aware that the process may take longer than it seems at first glance, especially for organizations with multiple locations and diverse plans. Complexity increases for organizations with multiple types of products (e.g. multiple types of HMOs segmented for different membership preferences), and specialized schemes across different counties and states.
- Meticulous governance is necessary for success in managing this intricate process. Establishing effective communication channels can be challenging, but necessary to keep a pulse on progress throughout.

Identify the considerations and strategies deployed by plans to compete in the market.
- Pricing is a key factor in building a competitive package in the market – it's akin to playing a strategic chess game, making calculated moves.
- Anticipating customer behavior in response to market conditions is essential. Reading analyst reports and insights from experts can help you identify what some of those potential problems and pain points are
- Once you do so, it’s about trying to predict responses from different communities and companies based on the available information.

Principle 3: Understand how your customer buys
The third principle emphasizes understanding how you fit into the plan’s bid process, as well as identifying key stakeholders and establishing working relationships with them.
Understand how you fit into the plan's process.
To understand whether you fit into the bid process, there are two primary reasons an MA organization would consider including your solution in the bid process:
- Does your solution fundamentally reduce unnecessary medical expenses? Companies have various ways to address reducing unnecessary medical expenses (see examples in chart below), which are part of the bid process and pricing submitted to CMS. Caveat: different considerations apply to providers, who can sign contracts outside of bid cycles unless they are large enough to warrant special attention.
- Do you offer a new or expanded supplementary benefit? Vendors offering unique and beneficial services that meet regulatory requirements and fit into the budget allocated for supplemental benefits.

Identify who you should be working with and how.
- Finding the right people to work with involves identifying individuals with targets to meet and collaborating with those people on ideas to address specific problems.
- Roles and departments responsible for these decisions vary across organizations, especially in larger organizations. A common place you may find them is under the Chief Medical Officer if she has operating responsibility.

Build trust, navigate the process, and address requirements to help the plan succeed.
- The key is not to be the smartest person in the room, but to be knowledgeable enough to build trust and assist your prospective customers.
- You should understand how decisions are made specifically within Medicare Advantage plans, which often requires relationship building across the org.
- Be prepared to meet the requirements set forth and make the process as easy as possible for the person guiding you through it.
Q&A
Q1: How can a startup navigate the bid process and insert themselves into the process? When does a startup need to go through the bid process as a provider versus being added to the network?
- Being added to a health plan can happen anytime, particularly when at rack rates.
- Understand the people involved in complex payment models and work with those who have experience in such models.
- Look for standard contracts that are provider-friendly to simplify the process.
- The bid process directly impacts risk-bearing Primary Care Organizations, as it determines the price of the plan and can drive new membership. For health plans that are sensitive to the point of view of their large risk bearing partners, one should expect more diligence and/or risk mitigation strategies.
- Plans often seek feedback from risk partners on innovative clinical strategies to improve bidding and pricing.
- A good relationship with the plan involves discussions about improving patient outcomes and access to care.
- Risk-bearing providers should be aware of the implications and understand the process as they grow their business.
Q2: How can proposals to payers be structured to make them beneficial and address administrative versus care coordination fees?
- Understanding the distinction between medical and administrative expenses is crucial.
- Health plans are capped at how much profit they can make, so if a solution is accounted for as medical expenses, it makes the business case stronger.
- Compliance requirements exist for distinguishing between medical and administrative expenses.
- Being a provider offering services is generally considered medical.
- Concrete feedback on specific examples may vary, but the overall point made is important.
Q3: How do health plans think about bringing in a provider on a value-based contract and growing membership?
- Bringing in a provider on a value-based contract can be more challenging if the provider is not already contracted with the plan.
- Plans have a vested interest in supporting providers who improve the quality of the plan.
- Providers who are not actively improving the plan's quality may still be able to get a contract but need a solid action plan to raise their star ratings.
Q4: Should a startup go through a quality improvement program to sign up payers or focus on the bid process?
- Depending on the solution you may not have a choice.
- Being part of a quality improvement program offers significant impact on the business of an MA plan. Star Ratings directly affect premium/revenue.
- Deploying off-cycle as a startup can be advantageous in terms of timing and speed, which can make quality improvement initiatives a bit easier in certain cases.
- Understanding the cycle in which the quality improvement team plans their budget and programs is crucial.
- Typically, the quality improvement timeline aligns with the annual budgeting process and calendar year shifts.
- Uncovering the specific processes and timelines in each organization is necessary.
Q5: How can the ROI be visualized when focusing on specific HEDIS metrics?
- Accessing data on a plan's star ratings and identifying measures where they underperform is powerful for a quality improvement program pitch.
- Plans focus on areas where they can improve relative to their peers or meet tougher CMS measure baselines.
- Building a compelling pitch involves demonstrating how your solution addresses areas of priority and quantifying the financial impact.
- Four-star and five-star thresholds are important, with five-star allowing year-round selling.
- Transparency on a plan's specific concerns may not always be clear, but publicly available datasets and data business expertise could help.
- Plans use mathematical formulas to assess their current status, set goals, and make assumptions about programs and provider contributions.
Q6: How can the cost of services be justified to payers and what is the pricing process for clinical programs?
- It can be helpful to know how similar contract structures were employed by other vendors of that plan.
- Understanding how the plan has purchased similar services before can provide insights into the ROI threshold and pricing model.
- Plans may start with lower ROI thresholds for novel programs and gradually increase them over time.
- For those managing risk-bearing PCPs, attention should be paid to the detailed financial reporting from Medicare Advantage plan partners, as there may be programs charged against full capitation or percentage of premium.
- Providers in risk-bearing primary care groups should be aware of the programs being paid for and their value.
- Imbalances may exist at the provider level due to variations in patient populations accessing the plan's programs.
Q7: How effective is going off-cycle and partnering with another company to gain faster access to an MA plan?
- Off-cycle partnerships can be a viable option for getting in with a Medicare Advantage plan, but it is not easy and becoming more complicated
- Working with a partner who already has a contract with the plan can provide an opportunity to package and offer your services.
- It is important to consider data rights and ensure that the partner has the necessary authority to work with you and deploy your solution.
- Partner management and understanding the scope of their authority under their contract with the plan is crucial.
- It is necessary to confirm that the partner can work with you and pitch the plan effectively, as there may be complications if they lack the required authority.
Q8: What are best practices and potential pitfalls in structuring ongoing relationships with payers?
- Payer contracts in the risk-bearing PCP world generally have a framework for working with providers.
- These can include Joint Operating Committees (JOCs), but these can be time-consuming and may not be feasible for the plan to implement with every provider.
- Getting the value story is important, and it is not just about hard dollar impact. It's important to connect MA plan partners to the mission and impact of your work, not just the financial arrangement.
- Help decision-makers at the plan understand what you do and why it's important.
- Emotional connections and storytelling can be powerful tools to convey the uniqueness and impact of your services.
- Be respectful of how the payer operates but ensure they understand your value proposition and what sets you apart.
Q9: What impact will the phased-in changes to risk adjustment have on bidding processes, and have payers provided any real-time input on the impact?
- Phased-in changes to risk adjustment have a significant impact on the bids and put more pressure on plans during the bidding processes.
- Changes create both challenges and opportunities for those selling into these organizations.
- Solutions addressing the headwinds faced by MA plans or providers can be valuable.
- MA plans will need to develop a risk adjustment program strategy to align with the recalibrated weights of various conditions.
- Plans will navigate the operational adjustments, including blended risk scores and multiple rescore models.
- Plans are motivated to figure out the changes with their providers and will adapt their strategies accordingly.
- CMS takes these actions to incentivize plans to focus on specific patient populations and conditions.
Q10: What observations can be made from public market company earnings transcripts regarding risk adjustment and its potential impact on premium relationships with providers?
- CMS expects MA plans to figure out the impact of risk adjustment changes.
- The burden of changes is often pushed down to providers.
- Providers with different membership profiles may be disproportionately affected.
- MA plans will have operational programs to address issues and opportunities.
- Risk adjustment policy helps put focus on areas that CMS wants to prioritize.
- Larger players may adapt faster than localized plans in the competitive market.
- Providers who accurately document conditions and have effective engagement programs are better positioned.
- Providers in capitated models, such as in California, have aligned incentives and have figured out risk adjustment effectively.
Conclusion
That’s all for now, folks! We had a great time chatting with Duncan, and appreciate him taking the time to share their knowledge with our fellow HTNers.
If you made it through this, and are finding that it sparked some additional questions for you, we’ve included Duncan’s contact information in the case you’d like to reach out.
Duncan Reece: duncanreece@gmail.com