Annual Reporting and Recordkeeping Requirements

CENTERS FOR MEDICARE & MEDICAID SERVICES (CMS)
MEDICAL LOSS RATIO (MLR) DATA FORM
FILING INSTRUCTIONS FOR CONTRACT YEAR (CY) 2023
FOR MEDICARE ADVANTAGE ORGANIZATIONS AND
PRESCRIPTION DRUG PLAN SPONSORS
As of January 10, 2022

OMB Approved # 0938-1232
CMS-10476
OMB expiration date:
PRA Disclosure Statement: This information is being collected to assist the Centers for
Medicare & Medicaid Services (CMS) with the ongoing management of Medicare programs
and policies. This required information collection will be used to meet the statutory
requirements at sections 1857(e)(4) and 1860D-12 of the Social Security Act to determine the
medical loss ratio for each contract year and to apply remittances and sanctions. Under the
Privacy Act of 1974 any personally identifying information obtained will be kept private to
the extent of the law.
According to the Paperwork Reduction Act of 1995, no persons are required to respond to a
collection of information unless it displays a valid OMB control number. The valid OMB
control number for this information collection is 0938-1232 (CMS-10476). The time required
to complete this information collection is estimated to average 61 hours per response,
including the time to review instructions, search existing data resources, gather the data
needed, and complete and review the information collection. Send comments regarding this
burden estimate or any other aspect of this collection of information, including suggestions
for reducing this burden, to CMS, 7500 Security Boulevard, Attn: Paperwork Reduction Act
Reports Clearance Officer, Mail Stop C4-26-05, Baltimore, Maryland 21244-1850.

The contents of this document do not have the force and effect of law and are not meant to bind
the public in any way, unless specifically incorporated into a contract. This document is intended
only to provide clarity to the public regarding existing requirements under the law.

TABLE OF CONTENTS
GENERAL INSTRUCTIONS ...................................................................................................................... 4
Introduction .............................................................................................................................................. 4
MLR Regulations Update .......................................................................................................................... 5
Additional Resources ................................................................................................................................ 6
REPORTING CONSIDERATIONS............................................................................................................. 7
Accounting Principles ................................................................................................................................ 7
Allocation of Expenses .............................................................................................................................. 7
Capitated Arrangements ........................................................................................................................... 7
Third Party Vendors .................................................................................................................................. 7
Commercial MLR ..................................................................................................................................... 10
Commercial Reinsurance ........................................................................................................................ 10
EGWPs ..................................................................................................................................................... 10
Low Income Premium and Cost Sharing Subsidies (LIPS and LICS) and Coverage Gap Discount Program
(CGDP) Payments .................................................................................................................................... 11
MA Optional Supplemental Benefits ...................................................................................................... 11
Medication Therapy Management (MTM) Programs ............................................................................. 11
Sequestration .......................................................................................................................................... 11
Territories................................................................................................................................................ 11
Reporting Requirements ......................................................................................................................... 11
MLR Review and Non-Compliance .......................................................................................................... 12
Penalties and Sanctions .......................................................................................................................... 12
CY 2023 MLR REPORT FIELDS.............................................................................................................. 14
WORKSHEET 1 ......................................................................................................................................... 14
Section 1: General Information .......................................................................................................... 14
Section 2: Data Collection ................................................................................................................... 15
WORKSHEET 2 ......................................................................................................................................... 28
Section 1: Medicare MLR and Remittance Calculation ....................................................................... 28
Section 2: MLR Credibility Adjustment Table ..................................................................................... 30
Section 3: MSA Deductible Factors ..................................................................................................... 30
WORKSHEET 3 ......................................................................................................................................... 31
ATTESTATION ......................................................................................................................................... 32

TECHNICAL INSTRUCTIONS ................................................................................................................ 33
Workbook Versions ............................................................................................................................. 33
Workbook Formatting and Protection ................................................................................................ 33
Workbook Macros............................................................................................................................... 33

GENERAL INSTRUCTIONS
Introduction
Medicare Advantage (MA) organizations and Prescription Drug Plan (PDP) sponsors must
submit an MLR Report to the Centers for Medicare & Medicaid Services (CMS) for each
contract offered during the Contract Year (CY) under the Medicare Advantage Program and the
Medicare Prescription Drug Benefit Program (Part D). The instructions and guidance in this
document are based on sections 1857(e) and 1860D-12 of the Act and the regulations at subparts
X in 42 CFR Parts 422 and 423 (42 CFR §§ 422.2400 et. seq. and 423.2400 et. seq.), adopted in
the final rule “Medicare Program; Medical Loss Ratio Requirements for the Medicare Advantage
and the Medicare Prescription Drug Benefit Programs,” which appeared in the Federal Register
on May 23, 2013 (79 FR 31284).
Organizations must submit the information via the CMS Health Plan Management System
(HPMS) in an MLR Report generated by the CMS MLR Reporting Tool workbook.
All contracts that received Medicare revenue during the contract year must submit an MLR
Report, with the following qualifications/clarifications:
•
•

•
•
•

•

PACE: 1 Programs of All-Inclusive Care for the Elderly (PACE) organizations are not
required to complete or submit an MLR Report.
Cost Plans and HCPPs: 2 The MLR Report must be completed for the Part D portion of
the benefits offered under the entity’s contract with CMS for Section 1876 Cost plans,
Section 1833 Cost plans, and employers/unions offering Cost plans or Health Care
Prepayment Plans (HCPPs). Cost plans that do not offer Part D are not required to
complete or submit an MLR Report.
EGWPs: 3 All EGWPs under the contract must be included in the MLR Report. EGWPs
are to include costs and revenue only for the Medicare-funded portion of each contract.
Dual-Special Needs Plans (D-SNPs): All D-SNPs under the contract must be included in
the MLR Report. Note that, for all plans, Medicaid costs and revenues are not included in
the MLR calculation.
State demonstrations to integrate care for dually eligible Medicare and Medicaid
beneficiaries (i.e., Medicare-Medicaid Plans (MMPs)): While MMPs do not complete
this particular MLR Report, they may be required to complete and submit a separate,
MMP-specific MLR report based on the requirements adopted for the demonstration.
Contracts that were terminated, consolidated, or withdrawn are still required to submit an
MLR Report that accounts for revenue, including payment adjustments such as risk
adjustment reconciliation amounts.

78 FR 31285.
Id.
3
78 FR 31286.
1
2

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The data included in the MLR Report will be used to calculate the Medicare medical loss ratio
(MLR) and remittance amount, if any, or to determine that the contract is non-credible.
These filing instructions apply to the CY 2023 MLR reporting year.
An attestation must be submitted in HPMS for each MLR Report.
The submitted MLR Reports will be subject to review and audit by CMS or by any person or
organization that CMS designates. As part of the review and audit process, CMS or its
representative may request additional documentation supporting the information contained in
MLR Reports. Organizations must be prepared to provide this information in a timely manner.
See 42 CFR §§ 422.503(d), 422.504(d)–(e), 422.2480, 423.504(d), 423.505(d), and 423.2480.
If a CY 2023 remittance amount is due to CMS, there will be an adjustment to payment, likely
occurring in mid-2024.
MLR reporting for a contract year will typically occur in December following the contract year.
However, for contracts that fail to meet the MLR threshold for 2 or more consecutive years,
MLR reporting for the following year will be required prior to the typical December timeframe.
CMS will notify affected contracts. CMS will specify a month that will allow time to implement
(1) an enrollment sanction for any contract that fails to meet the MLR threshold for 3 or more
consecutive years, or (2) contract termination for any contract that fails to meet the MLR
threshold for 5 consecutive years.
Please review any data flagged with a “red circle” validation in the MLR Report prior to upload
to HPMS. See the Technical Instructions section for more information.
The MLR workbook must be finalized prior to upload to HPMS. If the workbook is not finalized,
the upload will be rejected by HPMS. See the Technical Instructions section for more
information on the finalization of the MLR workbook.
MLR Regulations Update
In the CY 2019 final rule (CMS-4182-F), CMS revised the MLR calculation so that all
expenditures related to fraud reduction activities (including fraud prevention, fraud detection,
and fraud recovery) and Medication Therapy Management (MTM) programs are included in the
MLR numerator as expenditures for activities that improve healthcare quality.
For contract years prior to 2021, incurred claims in the MLR numerator include direct claims
paid to providers as defined in § 422.2 (including under capitation contracts with physicians) for
covered services furnished to all enrollees under an MA contract. In the CY 2021 final rule
(CMS-4190-F) (85 FR 33796), CMS amended § 422.2420 so that beginning with CY 2021 the
incurred claims portion of the MLR numerator includes all amounts that an MA organization
pays (including under capitation contracts) for covered services. This amendment also includes
in the incurred claims portion of the MLR numerator amounts paid for covered services to
individuals or entities that do not meet the definition of “provider” as defined at § 422.2.
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In the CY 2021 final rule, CMS also amended the regulations at §§ 422.2440 and 423.2440 to
codify the MLR credibility adjustment factors that were published in the May 23, 2013 Medicare
MLR final rule (CMS-4173-F) (78 FR 31284). CMS further amended § 422.2440 to add a
deductible factor to the MLR calculation for MA MSA contracts that receive a credibility
adjustment for CY 2021 and later. The deductible factor functions as a multiplier on the
credibility adjustment factor and applies to MLRs calculated for CY 2021 and subsequent years.
Additional Resources
The following resources provide additional information regarding the reporting and calculation
of Part C and Part D MLR data:
•
•
•
•
•
•
•
•
•

Questions regarding this MLR reporting may be addressed to: [email protected].
Further information regarding Medicare MLR may be found at https://www.cms.gov/
Medicare/Medicare-Advantage/Plan-Payment/MedicalLossRatio.html.
The May 2013 Medicare MLR implementing final rule is available at
https://www.gpo.gov/fdsys/pkg/FR-2013-05-23/pdf/2013-12156.pdf.
The CY 2019 Policy and Technical Changes to the Medicare Advantage, Medicare Cost
Plan, Medicare Fee-for-Service, the Medicare Prescription Drug Benefit Programs, and
the PACE Program final rule [CMS-4182-F] may be found at
https://www.govinfo.gov/content/pkg/FR-2018-04-16/pdf/2018-07179.pdf.
Commercial MLR regulations, guidance, filing instructions, and other resources are
available at http://www.cms.gov/CCIIO/Programs-and-Initiatives/Health-InsuranceMarket-Reforms/Medical-Loss-Ratio.html.
The Advance Notice, Rate Announcement, and Call Letter may be found at
https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/
Announcements-and-Documents.html.
Further information regarding Statutory Accounting Principles may be found at
https://content.naic.org/cipr_topics/topic_statutory_accounting_principles.htm
For technical questions about the MLR Reporting Tool workbook, HPMS, or the upload
process, please contact the HPMS Help Desk at 1-800-220-2028 or [email protected].

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REPORTING CONSIDERATIONS
Accounting Principles
MA organizations and Part D sponsors should use Statutory Accounting Principles to explain
how revenue is used to pay for non-claims expenditures. Non-claims and quality improving
expenses should be allocated by contract. If an expense is attributable to a specific activity, MA
organizations and Part D sponsors should allocate the expense to that particular activity.
However, if this is not feasible, then the MA organization or Part D sponsor must apportion the
costs using a generally accepted accounting method that yields the most accurate results.
Allocation of Expenses
Expenses must be allocated in accordance with the regulations at 42 CFR §§ 422.2420(d) and
423.2420(d), which require that each expense be included under only one type of expense, unless
a portion of the expense fits under the definition of or criteria for one type of expense and the
remainder fits into a different type of expense, in which case the expense must be pro-rated
between types of expenses. Expenditures that benefit multiple contracts, or contracts other than
those being reported, must be reported on a pro rata share.
Capitated Arrangements
Under the regulation at § 422.2420(b)(2), incurred claims include direct claims paid to providers,
including under capitation contracts. Where an MA organization or Part D sponsor has arranged
with a clinical provider for capitation payments rather than fee-for-service reimbursement for
covered services to enrollees, and such capitation payments include reimbursement for certain
provider administrative costs, the entire per member per month capitation payment paid to the
provider may be included in incurred claims. The full capitation amount paid to a provider for
covered services described at § 422.2420(a)(2) or § 423.2420(a)(2) could be reported as a benefit
expense, unless the provider contract specifies a distinct fee for administrative services. If the
capitated payment includes payment for activities that improve health care quality, as defined in
§§ 422.2430 and 423.2430, the MA organization or Part D sponsor must ensure that costs for
these activities are only counted once in the numerator.
Third Party Vendors
Payments by MA organizations or Part D sponsors to third party vendors as reimbursement for
providing clinical services or supplies directly to plan enrollees are incurred claims. Payments to
third party vendors to perform services such as network development, administrative fees, claims
processing, and utilization management, are non-claims administrative costs and are excluded
from incurred claims.
However, when a third party vendor, through its own employees, provides clinical services
directly to enrollees, the entire portion of the amount the MA organization or Part D sponsor
pays to the third party vendor that is attributable to the third party vendor’s direct provision of
clinical services should be considered incurred claims, even if such amount includes
reimbursement for administrative costs directly related to the vendor’s direct provision of clinical

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services. The phrase “through its own employees” does not include a third party vendor’s
contracted network of providers because such network providers are not considered employees
of the third party vendor.
•

For example, a Part D sponsor may contract with a pharmacy benefit manager (PBM) to
provide clinical services directly to enrollees through a mail order pharmacy. The
sponsor’s payments to the PBM for mail order pharmacy services provided directly by
the PBM’s employees, including administrative costs related to the PBM’s direct
provision of such mail order pharmacy services, are included in the sponsor’s incurred
claims.

In circumstances where a third party vendor pays a non-employee provider or supplier to provide
covered clinical services or medical supplies to plan enrollees, the MA organization or Part D
sponsor may only include as reimbursement for clinical services (i.e., incurred claims) the
amount that the vendor actually pays the medical provider or supplier for providing covered
clinical services or supplies to enrollees. Where the third party vendor is performing an
administrative function such as eligibility and coverage verification, claims processing,
utilization review, or network development, expenditures and profits on these functions would be
considered a non-claims administrative expense and must not be included by the MA
organization or Part D sponsor in its incurred claims.
•

For example, when a pharmacy benefit manager (PBM) pays a retail pharmacy one
amount for prescription drugs covered by the plan and charges the Part D plan sponsor a
higher amount (the retail spread), the sponsor may only claim the amounts paid by the
PBM to the retail pharmacy as incurred claims. The third party vendor (in this example,
the PBM) must report to the sponsor only the aggregate amount it pays all providers (in
this example, retail pharmacies) for clinical services or medical supplies to enrollees on
behalf of the MA organization or Part D sponsor, by plan or contract number. No claimby-claim or provider-by-provider reporting is required.

An MA organization or Part D sponsor may count a third party vendor’s expenses as activities
that improve health care quality to the extent that the organization or sponsor and the vendor can
show that these expenses were incurred for performing allowable quality improving activities on
behalf of the organization or sponsor.
•

For example, to the extent that a PBM performs functions that are designed primarily to
identify quality concerns, such as potential adverse drug interactions, those costs may be
reported, in aggregate, as expenditures for activities that improve health care quality.

Payments by MA organizations and Part D sponsors to clinical risk-bearing entities, such as
Independent Practice Associations (IPAs), Physician Hospital Organizations (PHOs), and
Accountable Care Organizations (ACOs) are treated as incurred claims if the following four
factors are met:
(1)

The entity contracts with an MA organization or Part D sponsor to deliver, provide, or
arrange for the delivery and provision of clinical services to the organization’s or
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(2)
(3)

(4)

sponsor’s MA or Part D plan enrollees, but the entity is not the plan sponsor with
respect to those services;
The entity contractually bears financial and utilization risk for the delivery, provision,
or arrangement of specific clinical services to enrollees;
The entity delivers, provides, or arranges for the delivery and provision of clinical
services through a system of integrated care delivery that, as appropriate, provides for
the coordination of care and sharing of clinical information, and which includes
programs such as provider performance reviews, tracking clinical outcomes,
communicating evidence-based guidelines to the entity’s clinical providers, and other,
similar care delivery efforts; and
Functions other than clinical services that are included in the payment (capitated or
fee-for-service) must be reasonably related or incident to the clinical services, and
must be performed on behalf of the entity or the entity’s providers.

If the entity satisfies this four-part test, payments for clinical services for which the entity bears
the financial risk for utilization as provided in prong two above will be considered incurred
claims. By contrast, payments to third party vendors that only take on pricing risk (e.g.,
payments to pharmacy benefit managers (PBMs) for retail pharmacy claims) should not be
included in incurred claims.
Payments to risk-bearing entities that include payments for administrative functions performed
on behalf of the entity’s member providers are incurred claims if all four factors outlined above
are met.
•

For example, a bundled payment to an IPA or similar entity for providing clinical
services to enrollees which includes: the IPA processing claims payments to its member
providers and submitting claims reports to MA organizations or Part D sponsors on
behalf of its providers; performing provider credentialing to determine a provider’s
acceptability into the IPA network; and developing a network for its providers’ benefit,
would be included in incurred claims.

To the extent that administrative functions are performed on behalf of the MA organization or
Part D sponsor, however, that portion of the organization or sponsor’s payment that is
attributable to administrative functions must not be included in incurred claims. This is the case
regardless of whether payment is made according to a separate, fee-for-service payment schedule
or as part of a global, capitated fee payment for all services provided.
•

For example, payment for processing claims in order to issue explanations of benefits
(EOBs) to enrollees and handling any stage of enrollee appeals would not be included in
incurred claims. Payments for non-clinical services for which the contract between the
IPA and the MA organization or Part D sponsor contains a “clawback” provision are not
incurred claims for MLR reporting purposes.

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Commercial MLR
CMS initially modeled Medicare MLR policy after the commercial MLR rules, and only
departed from the commercial MLR rules to the extent necessary and appropriate given the
Medicare context.
Commercial Reinsurance
MA organizations and Part D sponsors may not adjust the MLR for commercial reinsurance.
Commercial reinsurance premiums and recoveries are excluded from the MLR calculation. Both
costs and revenues must be factored into the MLR calculation on a direct basis (i.e., without
taking into account ceded reinsurance) as required under §§ 422.2420(b)(2)(i), 422.2420(c)(1),
423.2420(b)(2)(i), and 423.2420(c)(1).
The only instance in which the premiums (revenue) and claims associated with a 100 percent
indemnity reinsurance treaty are included in the assuming entity’s MLR calculation, instead of
the ceding entity’s MLR calculation, is when the reinsurance treaty was in force prior to the date
of enactment of the Affordable Care Act (i.e., March 23, 2010).
EGWPs
EGWPs must include costs and revenue per §§ 422.2420 and 423.2420 for the Medicare-funded
portion of each contract. Although CMS does not currently collect information on EGWP benefit
packages, CMS has the authority to collect this information if needed.
All Medicare-funded revenue must be included.
To determine the Medicare-funded portion of the contract, organizations may either:
•
•

Use actual cost information to separate the employer-funded versus Medicare-funded
portions of the EGWPs under the contract, or
Allocate the Medicare-funded portion of the EGWP costs under the contract based on the
Medicare portion of revenue for the contract (i.e., allocate Medicare-funded costs as the
total costs multiplied by the ratio of Medicare revenue to total revenue).

Note that plan-specific revenue amounts may be useful when allocating costs to yield the most
accurate result. That is, for the purpose of allocating costs, it may be useful to first summarize
the Medicare-funded revenue for the contract separately for EGWP plans under the contract and
for non-EGWP plans under the contract.
Note that all categories of costs (claims, taxes and fees, quality improvement activities, nonclaims costs) need to be separated/allocated between the employer-funded versus Medicarefunded portions of the contract.
For non-CY EGWPs, MLR calculations and remittances would occur on a calendar year basis,
similar to how payments and most submissions to CMS are on a calendar year basis.
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Low Income Premium and Cost Sharing Subsidies (LIPS and LICS) and Coverage Gap
Discount Program (CGDP) Payments
CMS makes LIPS payments to Part D sponsors so that they can be made whole for the reduced
premiums paid by eligible low-income beneficiaries. LIPS payments are revenue to the plan and
are taken into account in the denominator of the MLR. Because CMS views LICS and coverage
gap discount program payments as pass-through amounts, they are excluded from both the
numerator and denominator of the MLR.
MA Optional Supplemental Benefits
The MA MLR includes all of the MA benefits defined at § 422.100(c): basic benefits, mandatory
supplemental benefits, and optional supplemental benefits. All Medicare costs and revenues
under an MA contract should be included in the MLR, and the optional supplemental benefit
package is defined by law as a type of Medicare benefit under the MA program.
Medication Therapy Management (MTM) Programs
MTM programs that meet the requirements of § 423.153(d) are quality improving activities. §§
422.2430(a)(4)(i) and 423.2430(a)(4)(i).
Sequestration
Generally speaking, the MLR calculation is based on actual incurred costs and revenues, which
would reflect sequestration reductions. For example, if reduced amounts are paid to providers
due to sequestration, then incurred costs would reflect the reduction. The revenue received from
CMS would reflect any sequestration reductions.
Territories
CMS is authorized under §§ 422.2420(a) and 423.2420(a) to make adjustments to the MLR
produced by the standard formula to address exceptional circumstances for areas outside the 50
states and the District of Columbia. At this time, CMS does not believe it has sufficient
information to determine whether and how to make such an adjustment. Therefore, CMS will
collect CY 2023 MLR Reports and subsequently determine if an adjustment to the CY 2023
MLR calculation is warranted for contracts serving territories. If CMS decides that an adjustment
is warranted, it will announce the methodology to the affected contracts.
Reporting Requirements
For each contract year, each MA organization or Part D sponsor must submit an MLR Report to
CMS, in a timeframe and manner specified by CMS. For CY 2018 and subsequent contract
years, MA organizations and Part D sponsors will report the MLR percentage (after any
credibility adjustment) and the amount of any remittance owed to CMS for each contract, or that
the contract is non-credible. §§ 422.2460 and 423.2460.
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In accordance with §§ 422.2460(d) and 423.2460(d), the MLR is reported once, and is not
reopened as a result of any payment reconciliation processes.
MLR Review and Non-Compliance
CMS conducts selected reviews of submitted MLR data under §§ 422.2480 and 423.2480.
MA organizations and Part D sponsors are required to maintain evidence of amounts reported to
CMS and to validate all data necessary to calculate MLRs in accordance with the requirements in
§§ 422.2480 and 423.2480. See also 42 CFR §§ 422.503(d), 422.504(d)–(e), 422.2480,
423.504(d), 423.505(d), and 423.2480.
Documents and records must be maintained for 10 years from the date such information was
reported to CMS with respect to a given MLR reporting year (for MA organizations, per §
422.2480) or contract year (for Part D sponsors, per § 423.2480).
MA organizations and Part D sponsors must require any third party vendor supplying drug or
medical cost contracting and claim adjudication services to the MA organization or Part D
sponsor to provide all underlying data associated with MLR reporting to that MA organization or
Part D sponsor in a timely manner, when requested by the MA organization or Part D sponsor,
regardless of current contractual limitations, in order to validate the accuracy of MLR reporting.
§§ 422.2480(c)(2) and 423.2480(c)(2).
MLR Reports submitted under § 422.2460 or § 423.2460, calculations, or any other required
MLR submissions found to be materially incorrect or fraudulent—
(1)
(2)
(3)

are noted by CMS;
appropriate remittance amounts are recouped by CMS; and
sanctions may be imposed by CMS as provided in §§ 422.752 and 423.752.

Penalties and Sanctions
An MA organization or Part D sponsor is required to report an MLR for each contract for each
contract year.
If CMS determines for a contract year that an MA organization or Part D sponsor has an MLR
for a contract that is less than 0.85, the MA organization or Part D sponsor has not met the MLR
requirement and must remit to CMS an amount equal to the product of the following:
(1)
(2)

the total revenue of the MA or Part D contract for the contract year, per §§
422.2420(c) and 423.2420(c) and
the difference between 0.85 and the MLR for the contract year.

If CMS determines that an MA organization or Part D sponsor has an MLR for a contract that is
less than 0.85 for 3 or more consecutive contract years, CMS does not permit the enrollment of
new enrollees under the contract for coverage during the second succeeding contract year.
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If CMS determines that an MA organization or Part D sponsor has an MLR for a contract that is
less than 0.85 for 5 consecutive contract years, CMS terminates the contract in accordance with §
422.510 or § 423.509, effective as of the second succeeding contract year.

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CY 2023 MLR REPORT FIELDS
WORKSHEET 1
Section 1: General Information
The MLR Report captures contract-specific information for the reporting period.
Line 1 – Contract Year
This field is pre-populated with the year to which the contract applies.
Line 2 – Contract Number
Enter the contract number, which begins with a capital letter H, R, S, or E and includes
four Arabic numerals (e.g., H9999). Be sure to include all leading zeroes (e.g., H0001).
Line 3 – Organization Name
Enter the organization’s legal entity name. This information also appears in HPMS.
Line 4 – Date MLR Report finalized
This field is populated with the date when the MLR Report is finalized. See the Technical
Instructions section for more information.
Line 5 – Contact Information
Plan sponsors must identify two contacts that will be readily available and authorized to
discuss the information submitted in the MLR Report.
In this section, enter the name, position, phone number, and e-mail information for both
contacts. Do not leave any part of this section blank.

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Section 2: Data Collection
Enter total dollars; PMPMs are automatically calculated.
Line 1 – Revenue
In accordance with §§ 422.2420(c)(3) and 423.2420(c)(3), the following amounts must not be
included in total revenue:
•
•

•

The amount of unpaid premiums for which the MA organization or Part D sponsor can
demonstrate to CMS that it made a reasonable effort to collect.
The following EHR payments and adjustments:
o EHR incentive payments for meaningful use of certified electronic health record
technology by qualifying MAOs, MA EPs, and MA-affiliated eligible hospitals
that are administered under 42 CFR part 495 subpart C.
o EHR payment adjustments for a failure to meet meaningful use requirements that
are administered under 42 CFR part 495 subpart C.
Coverage Gap Discount Program payments under § 423.2320.

LICS payments are not included as revenue for MLR reporting.
Total revenue (as defined at §§ 422.2420(c) and 423.2420(c)) for policies issued by an MA
organization or Part D sponsor and later assumed by another entity must be reported by the
assuming entity for the entire MLR reporting year during which the policies were assumed and
no revenue for that contract year must be reported by the ceding MA organization or Part D
sponsor. §§ 422.2420(c)(4) and 423.2420(c)(4).
Total revenue (as defined at §§ 422.2420(c) and 423.2420(c)) that is reinsured for a block of
business that was subject to indemnity reinsurance and administrative agreements effective prior
to March 23, 2010, for which the assuming entity is responsible for 100% of the ceding entity’s
financial risk and takes on all of the administration of the block, must be reported by the
assuming issuer and must not be reported by the ceding issuer. §§ 422.2420(c)(5) and
423.2420(c)(5).
CMS provides organizations and sponsors with revenue information via several reports. The
following CMS reports are used in this mapping:
•

•

MMDDF = Monthly Membership Detail Data Files
NOTE for CY 2023 MLR: Payments for contract year 2023, which would include
contract year (CY 2023) payment adjustments generally through the last completed
quarter prior to MLR reporting (generally through September 30, 2024 for CY 2023
MLR) and would include payment adjustments for the contract year (CY 2023) risk
adjustment reconciliations which appear in the MMR under adjustment reason code 25
for Part C and code 37 for Part D.
PRS CTR = Payment Reconciliation System (PRS) Reconciliation Results Report to
Plans, Contract Trailer “CTR” version
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MLR Report template field
CMS revenue report
Sequestration Adjustments: MA and PD
N/A*
Beneficiary Premiums: MA and PD
N/A
MA payment including 3 MA Rebate categories
MMDDF item 65
MA Rebate for Part B
MMDDF items 59+60
MA Rebate for Part D Basic
MMDDF item 71
MSA Enrollee Deposit
N/A
Part D direct subsidy
MMDDF item 73
Part D federal reinsurance
PRS CTR field 20
LIPSA
MMDDF item 35
Part D risk corridor payments
PRS CTR field 33
* Sequestration Adjustments are included on the monthly contract-level Plan Payment Report
(PPR), produced by the Automated Plan Payment System (APPS), on a paid basis. The MLR
Report template contains a default sequestration adjustment calculation as 2% reduction of
certain/applicable revenue lines. The MA organization or Part D sponsor can override this
default calculation with a plan-reported sequestration amount (for example, to reflect when
sequestration is suspended for specific time periods by legislation). Sequestration adjustment
must be a negative amount.
Note that the MMDDF amounts do not reflect the sequestration adjustment. The following
MMDDF amounts are subject to sequestration: MA payment including 3 rebates (MMDDF item
65), Part B Rebate (MMDDF items 59+60), Part D Basic Rebate (MMDDF item 71), and Part D
Direct Subsidy (MMDDF item 73).
Note that Beneficiary premiums, Part D federal reinsurance, Low Income Premium Subsidy
Amount, and Part D risk corridor payments are not subject to sequestration.
Note that sequestration applied to MA Rebates, including MA Rebates for Part D Basic Premium
Reduction, are considered Part C payment adjustments (not Part D payment adjustments).
Note that federal reinsurance includes both prospective payments and reconciliation adjustments.
Plan revenue related to the Part D Enhanced MTM Model is included in the MLR denominator.
NOTE: The MMDDF item numbers referenced above correspond to version 15 of the Plan
Communications User Guide, released March 30, 2021, available at:
https://www.cms.gov/files/document/plan-communications-user-guide-february-22-2021-v150revised-march-30-2021.pdf.
CY 2023 contracts that were terminated, consolidated, or withdrawn are required to submit an
MLR that accounts for revenue, including risk adjustment reconciliation amounts. CMS will post
the Part C and Part D risk adjustment reconciliation amounts for contract year (CY 2023)
contracts that terminated, consolidated, or withdrew at: HPMS Home > Risk Adjustment > Risk
Adjustment Reconciliation Amount. These values are from the MMR with adjustment reason
code (ARC) 25 and 37. These values are prior to application of sequestration (i.e., “gross” of
sequestration). This information may be used in the development of (CY 2023) MLR reporting.
Page 16 of 34

More information about the CMS revenue reports may be found at:
•
•

https://www.cms.gov/Research-Statistics-Data-and-Systems/CMS-InformationTechnology/mapdhelpdesk/Plan_Communications_User_Guide.html
http://www.csscoperations.com/internet/cssc3.nsf/docsCat/CSSC~CSSC%20Operations~
Prescription%20Drug%20Event~Report%20Layouts?open&expand=1&navmenu=Prescr
iption^Drug^Event||

In accordance with §§ 422.2460(c) and 423.2460(c), total revenue included as part of the MLR
calculation must be net of all projected reconciliations.
Line 1.0 – Sequestration Adjustment
See the mapping to CMS revenue reports provided above.
The MLR Report contains a default sequestration adjustment calculation as 2% reduction of
Lines 1.2, 1.3, 1.4, and 1.6. The organization may also choose to override this default calculation
with a plan-reported sequestration amount but is still expected to be approximately 2% of the
affected revenue lines. Sequestration adjustment must be entered as a negative amount.
Note that lines 1.1, 1.7, 1.8, and 1.9 are not subject to sequestration.
Note that sequestration applied to MA Rebates, including MA Rebates for Part D Basic Premium
Reduction, are considered Part C payment adjustments (not Part D payment adjustments).
Therefore, sequestration applied to Line 1.4 (MA Rebate for Part D Basic Premium Reduction)
should be reported in Line 1.0a (MA Sequestration Adjustment), not Line 1.0b.
Line 1.0a – MA Sequestration Adjustment
MA portion of Line 1.0
Line 1.0b – Part D Sequestration Adjustment
Part D portion of Line 1.0
Line 1.1 – Beneficiary Premium
Beneficiary premiums include all premiums by or on behalf of enrollees, all unpaid premium
amounts that an organization could have collected from enrollees minus any premium amounts
that remain unpaid after reasonable collection efforts, and all changes in unearned premium
reserves.
Beneficiary premiums are net of MA rebates (i.e., after application of MA rebates to reduce
premium). Beneficiary premiums include MA Basic, MA Mandatory Supplemental, MA
Optional Supplemental, Part D Basic, and Part D Supplemental.
Line 1.1a – MA (Basic + Mandatory Supplemental + Optional Supplemental)
Page 17 of 34

MA portion of Line 1.1
Line 1.1b – Part D (Basic + Supplemental)
Part D portion of Line 1.1
Line 1.2 – MA plan payments (based on A/B bid), using final risk scores including MA
Rebate for Cost Sharing Reduction, MA Rebate for Other Mandatory Supplemental
Benefits, and MA Rebate for Part D Supplemental Benefits
See the mapping to CMS revenue reports provided above.
Line 1.3 – MA Rebate for Part B Premium Reduction
See the mapping to CMS revenue reports provided above.
Line 1.4 – MA Rebate for Part D Basic Premium Reduction
See the mapping to CMS revenue reports provided above.
Line 1.5 – MSA Enrollee Deposit
Applies to MSA plans only
Line 1.6 – Part D direct subsidy, using final risk scores

See the mapping to CMS revenue reports provided above.
Line 1.7 – Part D federal reinsurance subsidy (prospective and reconciliation adjustments)
See the mapping to CMS revenue reports provided above.
Note that federal reinsurance includes both prospective payments and reconciliation adjustments.
Line 1.8 – Part D Low Income Premium Subsidy Amount
See the mapping to CMS revenue reports provided above.
Line 1.9 – Part D risk corridor payments
See the mapping to CMS revenue reports provided above.
Line 1.10 – Total
Calculated as the sum of Lines 1.0 through 1.9.
Line 2 – Claims
Page 18 of 34

Enter the contract’s expenses for the reporting period by the various categories.
Incurred claims for clinical services and prescription drug costs must include the following:
1. Direct claims that the MA organization pays to providers (including under capitation
contracts) for covered services (described at § 422.2420(a)(2)) provided to all
enrollees under the contract.
2. Direct drug costs that are actually paid (as defined in § 423.308) by the Part D
sponsor.
3. For an MA contract that includes MA–PD plans (described at § 422.2420(a)(2)), drug
costs provided to all enrollees under the contract, as defined at § 423.2420(b)(2)(i).
4. Unpaid claims reserves for the current contract year, including claims reported in the
process of adjustment.
5. Percentage withholds from payments made to contracted providers.
6. Incurred but not reported claims based on past experience, and modified to reflect
current conditions such as changes in exposure, claim frequency or severity.
7. Changes in other claims-related reserves.
8. Claims that are recoverable for anticipated coordination of benefits.
9. Claims payments recoveries received as a result of subrogation.
10. Reserves for contingent benefits and the medical or Part D claim portion of lawsuits.
11. The amount of incentive and bonus payments made to providers.
Note: The MLR Report Template used for contract years prior to 2018 included lines for “Total
fraud reduction expense” (Line 2.7a) and “Total fraud recoveries that reduced paid claims in
Line 2.1” (Line 2.7b). For CY 2023and subsequent years, the total amount spent on fraud
reduction activities (including fraud prevention, fraud detection, and fraud recovery) should be
entered at Line 4.8.
Part D federal reinsurance is included in both the MLR numerator and denominator.
LICS and CGDP are excluded from both the MLR numerator and denominator.
MA Rebate amounts used to reduce the Part B premium and MSA Enrollee Deposit amounts are
included in both the MLR numerator and denominator.
Adjustments that must be deducted from incurred claims include overpayment recoveries
received from providers.
The following amounts must not be included in incurred claims:
1. Non-claims costs, as defined in §§ 422.2401 and 423.2401, which include the
following:
a. Amounts paid to third party vendors for secondary network savings.
b. Amounts paid to third party vendors for any of the following:
i. Network development.
ii. Administrative fees.
iii. Claims processing.

Page 19 of 34

iv. Utilization management.
c. Amounts paid, including amounts paid to a provider or pharmacy, for
professional or administrative services that do not represent compensation or
reimbursement for covered services provided to an enrollee, such as the
following:
i. Medical record copying costs.
ii. Attorneys’ fees.
iii. Subrogation vendor fees.
iv. Bona fide service fees.
v. Compensation to any of the following:
1. Paraprofessionals.
2. Janitors.
3. Quality assurance analysts.
4. Administrative supervisors.
5. Secretaries to medical personnel.
6. Medical record clerks.
2. Amounts paid to CMS as a remittance under § 422.2410(b) or § 423.2410(b).
Incurred claims for policies issued by one MA organization or Part D sponsor and later assumed
by another entity must be included in the MLR calculation of the assuming organization for the
entire MLR reporting year during which the policies were assumed and no incurred claims for
that contract year must be included in the MLR calculation by the ceding MA organization or
Part D sponsor.
Reinsured incurred claims for a block of business that was subject to indemnity reinsurance and
administrative agreements effective before March 23, 2010, for which the assuming entity is
responsible for 100 percent of the ceding entity’s financial risk and takes on all of the
administration of the block, must be included in the assuming issuer’s MLR calculation and must
not be included in the ceding issuer’s MLR calculation.
Line 2.1 – Claims incurred only during CY 2023, paid through 9/30/2024
This line is similar to the commercial MLR reporting form Part 2 Line 2.1.
Claim experience should generally be through September 30th following the contract year (e.g.,
for CY 2023 MLR reporting, claims incurred during CY 2023 paid through 9/30/2024; liability
and reserves for claims incurred during CY 2023 calculated as of 9/30/2024).
Line 2.1a – Claims incurred for benefits covered under Parts A & B (incl. supp. benefits
that extend, or reduce cost sharing for, A/B benefits)
This line should only include claims incurred for items and services that are covered under
Medicare Parts A and B. Claims incurred for MA supplemental benefits that extend coverage of,
or reduce cost sharing for, items and services covered under Medicare Parts A and B should be
reported on this Line. Expenditures for additional expenditures for Additional Sessions of
Page 20 of 34

Smoking and Tobacco Cessation Counseling (PBP 14c) provided as supplemental benefits
should be excluded from this Line and included in Line 2.1b.15.
2.1b – Claims incurred for MA supplemental benefits (excl. supp. benefits that extend or
reduce cost sharing for A/B benefits)
Calculated field that is the sum of the amounts reported in Lines 2.1b.1 through 2.1b.17.
For each line, also indicate whether the reported amounts are for only one plan under the contract
by selecting “Yes” in the drop-down box. Select “No” if the reported amounts are for multiple
plans under the contract offering the benefit.
Expenditures reported in Lines 2.1b.1 through 2.1b.17 are generally expected to relate to the
benefits in the service categories in the CY 2023 PBP. Expenditures reported in Lines 2.1b.1
through 2.1b.17 that are not related to the PBP service category or categories specified in the
instructions below should be identified in the expense allocation methodology (Worksheet 3 Line
1.2).
Line 2.1b.1 Dental
This line should include all expenditures for Dental benefits provided as supplemental benefits.
This includes amounts spent on Preventive Dental (PBP B16a) and Comprehensive Dental (PBP
B16b).
Line 2.1b.2 Vision
This line should include all expenditures for Vision benefits provided as supplemental benefits.
This includes amounts spent on Eye Exams (PBP B17a) and Eye Wear (PBP B17b).
Line 2.1b.3 Hearing
This line should include all expenditures for Hearing benefits provided as supplemental benefits.
This includes Hearing Exams (PBP B18a) and Hearing Aids (B18b).
Line 2.1b.4 Transportation
This line should include all expenditures for Transportation benefits provided as supplemental
benefits. (PBP 10b).
Transportation for non-medical needs offered as SSBCI (PBP B13i) should be excluded from
this line and reported in Line 2.1b.17.
Line 2.1b.5 Fitness Benefit
This line should include all expenditures for Fitness benefits (PBP B14c) provided as
supplemental benefits.
Page 21 of 34

Line 2.1b.6 Worldwide Coverage / Visitor Travel
This line should include all expenditures for Worldwide Emergency/Urgent Coverage (PBP B4c)
provided as a supplemental benefit.

Line 2.1b.7 Over the Counter (OTC) Items
This line should include all expenditures for OTC items (PBP B13b) provided as supplemental
benefits.
Line 2.1b.8 Remote Access Technologies
This line should include all expenditures for Remote Access Technologies (including
Web/Phone based technologies and Nursing Hotline) (PBP B14c) provided as supplemental
benefits.
Line 2.1b.9 Meal Benefit
This line should include all expenditures for Meal Benefits (B13c) provided as supplemental
benefits. Meals (beyond a limited basis) offered as SSBCI (PBP B13i) should be excluded from
this line and reported in Line 2.1b.17.
Line 2.1b.10 Routine Foot Care
This line should include all expenditures for Routine Foot Care services (PBP B7f) provided as
supplemental benefits. Expenditures for Medicare-covered podiatry services should be excluded
from this line and reported in Line 2.1a.
Line 2.1b.11 Acupuncture Treatments
This line should include all expenditures for Acupuncture Treatments (PBP 13a) provided as
supplemental benefits.
Line 2.1b.12 Chiropractic Care
This line should include all expenditures for Chiropractic Care services (PBP 7b) provided as
supplemental benefits.
Expenditures for Medicare-covered Chiropractic Services (which includes only Manual
Manipulation of the Spine to Correct Subluxation) should be excluded from this line and
reported in Line 2.1a.
Line 2.1b.13 Personal Emergency Response System (PERS)
This line should include all expenditures for Personal Emergency Response Systems (PBP B14c)
provided as supplemental benefits.
Line 2.1b.14 Health Education
Page 22 of 34

This line should include all expenditures for Health Education (PBP 14c) provided as a
supplemental benefit.
Line 2.1b.15 Additional Sessions of Smoking and Tobacco Cessation Counseling
This line should include all expenditures for Additional Sessions of Smoking and Tobacco
Cessation Counseling (PBP 14c) provided as supplemental benefits.
Amounts spent on smoking and tobacco cessation counseling sessions up to the number of
sessions covered by original Medicare should be excluded from this Line and included in Line
2.1a.
Line 2.1b.16 All Other Primarily Health Related Supplemental Benefits
This line should include all amounts spent on primarily health related supplemental benefits that
have not already been reported on Lines 2.1b.1 through 2.1b.15.
Line 2.1b.17 Non-Primarily Health Related SSBCI
This line should include all amounts spent on non-primarily health related items and services that
are special supplemental benefits for the chronically ill (SSBCI) (as defined in § 422.102(f))
(PBP B13i).
Line 2.1b.18 Out-of-network Services (informational only; amount already include in Lines
2.1a through 2.1b.17).
Required data entry; do not leave blank.
Report the amount spent on coverage of out-of-network services as a supplemental benefit.
Amounts included in this Line should already be reported in Lines 2.1a or 2.1b.1 through
2.1b.17.
Line 2.1c – Claims incurred for Part D prescription drugs
This line is similar to the commercial MLR reporting form Part 1 Line 2.2.
For plan types that are only reporting Part D experience for MLR (such as PDPs and section
1876 cost plans), Line 2.1c should equal the Total calculated in Line 2.7.
This amount should be net/after the application of DIR.
Line 2.2 – Liability and reserves for claims incurred only during CY 2023, calculated as of
9/30/2024
This line is similar to the commercial MLR reporting form Part 2 Lines 2.2 and 2.4.
Line 2.3 – Incurred medical incentive pool and bonuses
Page 23 of 34

This line is similar to the commercial MLR reporting form Part 2 Line 2.11.
Line 2.3a – Paid medical incentive pools and bonuses MLR Reporting year
This line is similar to the commercial MLR reporting form Part 2 Line 2.11a.
Line 2.3b – Accrued medical incentive pools and bonuses MLR Reporting year
This line is similar to the commercial MLR reporting form Part 2 Line 2.11b.
Line 2.4 – Contingent benefit and lawsuit reserves
This line is similar to the commercial MLR reporting form Part 2 Line 2.13.
Line 2.5 – MA Rebate for Part B Premium Reduction
Calculated field that refers to Line 1.3
Line 2.6 – MSA Enrollee Deposit (MSA plans only)
Calculated field that refers to Line 1.5.
Line 2.7 – Total
Calculated as the sum of Lines 2.1 through 2.6.
Line 2.7a – Low Income Cost Sharing Subsidy Amount (information only; amount must be
excluded from Line 2.1c)
Required data entry; do not leave blank.
Note: This amount must also be excluded from Worksheet 1 Line 1 (Revenue).
Line 2.7b – Direct and Indirect Remuneration (DIR) (informational only; amount must be
excluded from Line 2.1c)
Required data entry; do not leave blank.
This line is similar to the commercial MLR reporting form Part 1 Line 2.3.
The amount reported should include all direct and indirect remuneration (including discounts,
charge backs or rebates, cash discounts, free goods contingent on a purchase agreement, up-front
payments, coupons, goods in kind, free or reduced-price services, grants, or other price
concessions or similar benefits offered to some or all purchasers) from any source (including
manufacturers, pharmacies, enrollees, or any other person) that would serve to decrease the costs
incurred under the Part D plan.
Page 24 of 34

Total net DIR should not be reported as negative unless total net DIR increases the sponsor’s
drug costs.
Line 3 –Federal and State Taxes and Licensing or Regulatory Fees
Required data entries; do not leave blank.
The categories under Line 3 are similar to the categories under Part 1 Line 3 of the commercial
MLR reporting form.
Federal and State taxes and assessments and licensing or regulatory fees must be in accordance
with the provisions in §§ 422.2420(c)(2) and 423.2420(c)(2).
Total net taxes/fees should not be negative unless total net taxes/fees increase the sponsor’s
revenue.
The regulations at §§ 422.2420(c)(2)(iv)(B) and 423.2420(c)(2)(iv)(B) provide that a federal
income tax-exempt MA organization or Part D sponsor may exclude from the MLR denominator
amounts used for community benefit expenditures, up to a limit of either 3 percent of total
revenue or the highest premium tax rate in the state for which the MA organization or Part D
sponsor is licensed, multiplied by the revenue for the contract.
Line 4 – Health Care Quality Improvement (QI) Expenses Incurred
The categories under Lines 4.1 through 4.5 are similar to the categories under Part 1 Line 4 of
the commercial MLR reporting form.
The regulations at §§ 422.2430(a) and 423.2430(a) define the expenditures and activities that
improve health care quality and can therefore be reported for MLR purposes. Sections
422.2430(b) and 423.2430(b) identify the excluded expenditures and activities that must not be
reported.
In accordance with the provisions in §§ 422.2430 and 423.2430, expenditures that must not be
included in quality improving activities include ICD–10 implementation costs in excess of 0.3
percent of total revenue.
Line 5 – Non-Claims Costs
Non-claims costs, as defined in §§ 422.2401 and 423.2401, are those expenses for administrative
services that are not—
1. Incurred claims (as provided in §§ 422.2420(b)(2) through (4) and 423.2420(b)(2)
through (b)(4));
2. Expenditures on quality improving activities (as provided in §§ 422.2430 and
423.2430);
3. Licensing and regulatory fees (as provided in §§ 422.2420(c)(2)(i) and
423.2420(c)(2)(i));
Page 25 of 34

4. State and Federal taxes and assessments (as provided in §§ 422.2420(c)(2)(ii) and
(iii), and 423.2420(c)(2)(ii) and (iii)).
Line 6 – Methodology for determining the Medicare-funded portion of the contract for
EGWP plans
Additional information can be found in the Reporting Considerations section of these
instructions, under the heading “EGWPs”.
Line 6.1 – Option 1 “Actual EGWP costs”, or Option 2 “Allocated based on revenue”
Enter the option used to determine the Medicare-funded portion of the contract for EGWP plans.
If there are no EGWP plans under the contract, then leave this field blank.
Line 6.2 – Enter percentage used to allocate EGWP costs (i.e., Medicare % of total
revenue)
If Option 2 “Allocated based on revenue” is entered in Line 6.1, then enter the percentage used
to allocate EGWP costs as Medicare-funded under the contract. Otherwise, leave this field blank.
The percentage entered is the ratio of Medicare revenue to total revenue (that is, the percentage
that is used to allocate costs as Medicare-funded). Additional information on calculating the
Medicare-funded portion of EGWP costs can be found in the Reporting Considerations section
of these instructions, under the heading “EGWPs”.
Line 7 – Member Months
Member months should be on a consistent basis with the claims and revenue information (e.g.,
for CY 2023 MLR reporting, include adjustments generally through September 30, 2024).
Member months for a contract year equal the sum across the 12 months of a year of the total
number of enrollees for each month. This includes enrollees who are in ESRD and hospice status
for a month.
Line 8 – Plan-Specific Data
Column (b) Plans offered under the contract in CY 2023

Enter the list of plans offered under the contract in CY 2023, in the format of contract-plansegment (Hxxxx-xxx-xx, Rxxxx-xxx-xx, Sxxxx-xxx-xx, or Exxxx-xxx-xx). There are rows
available to enter up to 150 plans. Do not leave blank rows between plans.
Column (c) CY 2023 Member Months
Enter the member months associated with each plan entered.
Member months entered should be on a consistent basis with the claims information entered in
Line 2 (e.g., generally through September 2024).
Page 26 of 34

Member months for a contract year equal the sum across the 12 months of a year of the total
number of enrollees for each month. This includes enrollees who are in ESRD and hospice status
for a month.
Column (d) MSA Plan Deductible
Enter the amount of the deductible if the plan is an MSA plan.

Page 27 of 34

WORKSHEET 2
The purpose of Worksheet 2 is to compute the Medicare medical loss ratio (MLR) and
remittance amount, if any.
Section 1: Medicare MLR and Remittance Calculation
The MLR and remittance must be calculated in accordance with the provisions in §§ 422.2420(a)
through (c), and 423.2420(a) through (c).
Line 1 – Medical Loss Ratio Numerator
Line 1.1 – Claims
Calculated field that refers to Worksheet 1 Line 2.7.
Line 1.2 – Improving health care quality expenses
Calculated field that refers to Worksheet 1 Line 4.7.
Line 1.3 – MLR numerator
Calculated field: Worksheet 2 Line 1.1 + Line 1.2.
Line 2 – Medical Loss Ratio Denominator
Line 2.1 – Revenue
Calculated field that refers to Worksheet 1 Line 1.10.
Line 2.2 – Federal and State taxes and licensing or regulatory fees
Calculated field that refers to Worksheet 1 Line 3.4.
Line 2.3 – MLR denominator
Calculated field: Worksheet 2 Line 2.1 minus Line 2.2.
Line 3 – Credibility Adjustment
Line 3.1 – Member months to determine credibility
Calculated field that refers to Worksheet 1 Line 7.Line 3.2 – MLR credibility adjustments
table
Refers to either the MA or PD credibility adjustment table in Worksheet 2 Section 2.

Page 28 of 34

The PD adjustment factors are utilized for S contracts, contracts where total claims (Worksheet 1
Line 2.7) equal Part D claims (Line 2.1c), and contacts where total revenue (Line 1.10) equals
Part D revenue. Otherwise MA adjustment factors are utilized.
Line 3.3 – Base Credibility Adjustment Factor
Linear interpolation calculated based on member months (Worksheet 2 Line 3.1) and the MA or
PD credibility table (Worksheet 2 Line 3.2 and Section 2).
Line 3.4 – MSA Deductible Factor
Linear interpolation calculated based on MSA Plan Deductible (Worksheet 1 Line 8 column (o)).
For MA MSA contracts that do not have the same deductible for all plans under the contract, the
MSA Deductible Factor is weighted by enrollment in each plan based on member months
(Worksheet 1 Line 8 column (c)).
Line 4 – Medical Loss Ratio (MLR) Calculation
Line 4.1 – Unadjusted MLR
Calculated field: Worksheet 2 Line 1.3 divided by Worksheet 2 Line 2.3.
Line 4.2 – Credibility adjustment
Calculated field: Worksheet 2 Line 3.3 (multiplied by Line 3.4, if applicable)).
Line 4.3 – Adjusted MLR
Calculated field: Worksheet 2 Line 4.1 + Line 4.2, then rounded.
Line 5 – Remittance Calculation
Line 5.1 – Is contract either partially-credible or fully-credible?
“Yes”/“No” populated based on member months (Worksheet 2 Line 3.1) and the MA or PD
credibility table (Worksheet 2 Line 3.2 and Section 2).
Line 5.2 – MLR standard
Pre-populated with 85.0%
Line 5.3 – Adjusted MLR
Calculated field that refers to Worksheet 2 Line 4.3.
Line 5.4 – MLR denominator
Calculated field that refers to Worksheet 2 Line 2.3.
Page 29 of 34

Line 5.5 – Remittance amount due to CMS for CY 2023 experience
Calculated field: Worksheet 2 (Lines 5.2 – 5.3) x Line 5.4 when Adjusted MLR (Worksheet 2
Line 5.3) is less than MLR standard (Worksheet 2 Line 5.2)
Line 5.5a – Remittance amount allocated to Parts A&B (For CMS system purposes only)
Calculated field to allocate Line 5.5 based on Worksheet 1 Line 1 Revenue data entries
Line 5.5b – Remittance amount allocated to Part D (For CMS system purposes only)
Calculated field to allocate Line 5.5 based on Worksheet 1 Line 1 Revenue data entries
Section 2: MLR Credibility Adjustment Table
MA and PD credibility adjustments, based on member months.
An MA organization or Part D sponsor may add a credibility adjustment to a contract’s MLR if
the contract’s experience is partially credible, as determined by CMS § 422.2440(d)(1) or §
423.2440(d)(1), respectively.
An MA organization or Part D sponsor may not add a credibility adjustment to a contract’s MLR
if the contract’s experience is fully credible, as defined at § 422.2440(d)(2) or § 423.2440(d)(2),
respectively.
For those contract years for which an MA or Part D contract has non-credible experience, as
defined at § 422.2440(d)(3) or § 423.2440(d)(3), respectively, sanctions under § 422.2410(b)
through (d) or § 423.2410(b) through (d) will not apply.
Section 3: MSA Deductible Factors
MSA deductible factors, based on the deductible that applies to MSA plan members under a
contract.
For MA MSA contracts only, the deductible factor serves as a multiplier on the Base Credibility
Adjustment in Worksheet 2 Line 3.3. If an MSA contract has multiple MSA plans that have
different deductibles, the deductible factor for the contract is calculated as the weighted average
of the proportion of enrollees in each MSA plan under the contract.

Page 30 of 34

WORKSHEET 3
Section 1 – Description of Expense Allocation Methods
Worksheet 3 is used by the organization to describe the methods used to allocate expenses, as
reported on the MLR Report, including incurred claims, quality improvement expenses, federal
and state taxes and licensing or regulatory fees, and other non-claims costs. The fields on
Worksheet 3 are similar to the fields on Part 6 of the commercial MLR reporting form.
The fields on Worksheet 3 refer to the data entry lines of Worksheet 1.
A detailed description of each expense element should be provided, including how each specific
expense meets the criteria for the type of expense in which it is categorized.
Note that the fields on Worksheet 3 are limited to 4,000 characters each.
See the “Allocation of Expenses” Reporting Consideration in the General Instructions section of
this document for more information.

Page 31 of 34

ATTESTATION
An attestation must be submitted in the HPMS attestation module to accompany each MLR
Report uploaded to HPMS. The attesting officer must be designated as a CEO, CFO, or COO in
the HPMS Basic Contract Management Module.
The language below is used in the electronic attestation module in HPMS:
CY 2023 MLR Attestation
The officer of this reporting issuer being duly sworn, attests that he/she is the described
officer of the reporting issuer, and that this MLR Report is a full and true statement of all
the elements related to the health insurance coverage issued for the MLR reporting year
stated above, and that the MLR Report has been completed in accordance with the
Department of Health and Human Services reporting instructions and regulations,
according to the best of his/her information, knowledge and belief. Furthermore, the
scope of this attestation by the described officer includes any related electronic filings
and postings for the MLR reporting year stated above, that are required by Department of
Health and Human Services under implementing regulations.
CEO/CFO/CO

Page 32 of 34

TECHNICAL INSTRUCTIONS
The MLR Report is an Excel workbook that contains macro code and validation logic. The
workbook provides the visual interface for the user to enter MLR data for a contract.
Workbook Versions
The MLR Report employs three versions of the workbook that serve different purposes:
•

Working file – a read-write enabled file that allows users to enter data in specified input
fields. Users may edit, save, name, and re-name working versions of the MLR workbook.

•

Finalized file – a read-only file created by a process called finalization, which modifies
the format of the working file to prepare it for submission to CMS. Finalization saves the
file using a standard naming convention and populates a “timestamp” within the finalized
MLR Report. Note that finalized files remove the macro functionality.

•

Backup file – also a read-only file created by the finalization process. The backup file
uses the same file name as the finalized file with the word “backup” and a timestamp
appended to it. The data in the backup file is the same as that in the working file. Users
can remove the text “backup” from the filename to enable editing of the backup file. As
such, backup files enable users to convert backup files back into working files—if
needed—for further modification.

Workbook Formatting and Protection
Data entry cells are formatted in yellow. Keyboard users may use the ‘Tab’ key on the keyboard
to cycle through the input cells.
All other cells prevent the user from keying in data. A dialog box alerts the user if the user has
selected a protected cell. Cutting and pasting are not recommended, to prevent structural changes
to the workbook. Users may copy and paste data into the workbook, and link the workbook to
external files.
The MLR Report is password protected. The user may not modify the structure of the workbook.
Each data item must be located in its pre-defined cell location for successful processing in the
HPMS.
Tampering with the file’s protection, including but not limited to un-protecting and re-protecting
any parts of a workbook, will permanently compromise the file and prevent successful
finalization of the workbook. If a workbook is compromised in this way, you must discard the
compromised file, download and complete a new MLR Report.
Workbook Macros
The workbook includes macros that assist the user with data entry, data validation, and
workbook finalization.
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Finalize MLR
The finalization macro prepares the workbook for submission to CMS. The workbook must be
finalized before uploading to HPMS. When the finalization macro is triggered, the following
actions are performed:
•
•
•
•
•

Checks any required fields (e.g., Contract Number, Organization Name, and Contact
information) that must be entered for finalization to be successful.
Checks any critical validations of data fields.
Saves the working file.
Creates a backup file – this is a read-only file that contains the same data as the working
file; it can be used to restore data in a working file.
Creates a finalized file with a date stamp within the worksheet.

Finalized MLR workbooks are saved using the following naming convention: Contract
Number+MLR-CY+yyyy.xlsx. Use of this convention is a requirement for a successful upload to
the HPMS.
Example: H1111MLR-CY2023.xlsx
Finalized files are saved in the same directory where the working file is located.
Backup files use the same naming convention as finalized files with a timestamp appended to the
end of the name: finalized filename +“_Backup_”+YYYY-MM-DD-HHmmss.xlsm.
Example: H1111MLR-CY2023_Backup_2024-12-15-100000.xlsm
Back up files are saved in the same directory where the working file is located.
If additional changes are needed prior to submission (i.e., prior to upload to HPMS), modify the
contents of the working file and finalize the file again. The previous finalized file will be
overwritten and a new backup file will be created (backup files will not be overwritten as they
are time-stamped).
In the instance that the working copy has become corrupted, the backup file may be renamed and
used as the working copy. Removing the word ‘backup’ from the filename of the backup file will
convert the file into a working copy that is read-write enabled.
The workbook contains a button that can be used to launch the Finalize macro.
Circle Invalid
This macro function displays red circles around cells that have failed validation. The validations
are updated each time the file is saved, and when the “Circle Invalid” macro is run.
For example, the MLR Report workbook cannot be finalized if it contains invalid characters. The
invalid characters are < > & { } ;
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