Better Approaches to Lifestyle and Nutrition for Comprehensive Health (BALANCE)

Analysis updated November 9, 2026

Strategic questions for your team

What is our current patient population's overlap with BALANCE Model coverage criteria — specifically, how many of our Medicaid and Medicare Part D patients aged 18 or older have a documented BMI ≥35, or BMI ≥30 with heart failure with preserved ejection fraction, uncontrolled hypertension (systolic >140 mmHg or diastolic >90 mmHg despite two antihypertensive medications), CKD stage 3a or above, moderate-to-severe OSA (AHI >15), or noncirrhotic MASH with F2-F3 fibrosis, or BMI ≥27 with pre-diabetes, prior MI, prior stroke, or symptomatic peripheral artery disease — and what is our realistic GLP-1 initiation volume under these prior authorization thresholds?
For our Medicare Advantage and Part D plan partners, have they applied to participate in the BALANCE Model by the April 20, 2026 deadline, and have they confirmed they will meet the 80% national enrollment participation threshold required for CMS to move forward with the Medicare Part D launch on January 1, 2027 — and if that threshold is not met, what is our contingency plan for GLP-1 access through alternative channels during 2027?
What is our projected per-member drug expenditure exposure under BALANCE, given the negotiated GLP-1 Discounted Price of $245 per month supply for all model drugs (Mounjaro®, Ozempic®, Rybelsus®, Wegovy®, Zepbound® KwikPen®, and Foundayo™), and how does this compare to our current net drug spend on these same agents across all covered indications including type 2 diabetes and cardiovascular disease, factoring in the 340B adjustment of up to 5% downward on manufacturer rebates for 340B-covered entity claims?
Do our participating Medicare Advantage and Part D plan benefit packages qualify structurally for BALANCE participation — specifically, are any of our plans currently Defined Standard (DS) benefit type that would need to be converted to Basic Alternative or Actuarially Equivalent status before the June 1, 2026 bid deadline, and have we assessed whether our Enhanced Alternative plans can meet the $50 per 28- or 30-day supply cost-sharing maximum and our AE/BA plans the $125 maximum across all model drugs uniformly, including for LIS beneficiaries?
Have we evaluated the optional narrowed first risk corridor under BALANCE — where eligible MA-PD and PDP plans with model drug utilization rates exceeding one standard deviation above their plan-type mean qualify for a ±2.5% first threshold (versus the standard ±5%), with 50% shared risk between ±2.5–10% and 80% CMS / 20% plan risk beyond ±10% — and do our actuarial models support opting in at the April 20, 2026 application deadline given uncertainty in GLP-1 utilization projections?
For Medicaid-participating states in our operating footprint, what is the status of required State Plan Amendments authorizing supplemental rebate agreements, and can participating states execute a State Agreement with CMS and corresponding model SRAs with all participating manufacturers between the May 1, 2026 model launch window and the January 1, 2027 hard deadline — including alignment of both FFS and managed care populations, given that managed care plans must apply identical standardized access policies including no step therapy requirements beyond FDA-approved labeling?
What are our operational and technology capabilities for implementing the BALANCE Model's Auto-Lookback prior authorization requirement — specifically, can our health information systems automatically confirm patient eligibility via ICD-10 code review against coverage criteria (BMI thresholds, comorbidity diagnoses) to minimize provider and enrollee burden, and if not, what is our implementation timeline and cost to build or procure this functionality before January 1, 2027?
How will we operationalize patient connection to the manufacturer-provided lifestyle support programs — which must be provided at no cost to model beneficiaries under the CMS-sponsored model safe harbor at 42 CFR §1001.952(ii), covering diet and nutrition education, physical activity counseling, medication adherence support, and recurrent digital or telephone-based engagement including for patients with limited digital access — and what workflow changes are required across our ambulatory, pharmacy, and care management teams to ensure beneficiaries are consistently enrolled and engaged?
What is our competitive positioning strategy if our primary MA-PD or PDP competitors achieve broad BALANCE Model participation while we do not — given that CMS intends to make model-participating plan benefit packages prominently visible on Medicare Plan Finder during open enrollment — and conversely, what is our risk of adverse selection if we participate and a significant portion of competing plans do not meet the 80% enrollment threshold, causing the Medicare Part D component to be cancelled entirely for 2027?
Given that the BALANCE Model runs through December 31, 2031, with annual renegotiation of GLP-1 Discounted Pricing, coverage criteria, the list of model drugs, and lifestyle support parameters — and that CMS retains the right to modify any model policy or terminate participation for poor performance, program integrity issues, or non-compliance — what governance structure, legal review process, and annual re-evaluation framework do we need to establish to monitor renegotiation outcomes, assess ongoing financial performance against model targets, and execute timely decisions on State Agreement or Contract Addendum renewal or termination each year through 2031?

Traps and concerns

80% Part D Participation Threshold Kill Switch
The entire Medicare component of BALANCE does not launch unless Part D plan sponsors representing at least 80% of beneficiaries included in the National Average Monthly Bid Amount (NAMBA) calculation apply to participate by April 20, 2026, with CMS notifying plans by April 30, 2026. This creates a binary cliff: if even a modest bloc of large parent organizations declines to apply, the model collapses for all Medicare participants before a single claim is filed. Plans that have already invested in formulary redesign, bid submissions, staff training, and beneficiary communications would absorb sunk costs with no recourse. Parent organizations must also include 90% of their basic plan (DS/BA/AE) beneficiary enrollment, meaning a single large insurer with substantial Defined Standard plan enrollment that fails to convert those plans to BA or AE status could single-handedly push the threshold below 80%. The compressed timeline — application April 20, threshold notification April 30, bid deadline June 1 — leaves virtually no remediation window.
Facilitated DIR Field Payment Reconciliation Risk
Payment effectuation for Part D relies on a newly created Prescription Drug Event (PDE) field called 'Facilitated DIR' (FAD), which calculates the manufacturer rebate owed as the difference between ingredient cost reported by the plan and the sum of the GLP-1 Discounted Price (set at $245 per month supply per Appendix C) plus the Manufacturer Discount Program (MDP) amount. This is an operationally untested field being deployed on a novel drug class at potential scale across millions of beneficiaries. Errors in FAD field population, plan-level PDE submission logic, or MDP reconciliation will directly distort manufacturer invoices, which are processed quarterly through the existing Manufacturer Payment Portal. Because plans are explicitly not required to report FAD amounts on the DIR Report for Payment Reconciliation, audit trails between plan submissions and CMS annual reconciliation will be fragmented. A systematic miscalculation — even a few dollars per fill — aggregated across tens of thousands of monthly fills could produce multi-million dollar reconciliation disputes with no established dispute resolution timeline in the source documents.
Managed Care Alignment Deadline Compression for States
State Medicaid agencies must ensure that Medicaid managed care plan policies are fully consistent with the negotiated Medicaid Key Terms — including standardized prior authorization criteria and Preferred Drug List placement — for all managed care beneficiaries by January 1, 2027, even if they began model participation on May 1, 2026, with only their fee-for-service populations. Executing managed care contract amendments, memoranda of understanding, or rate cell adjustments to align managed care plans with the standardized access policy requires state procurement authority, actuarial certification, and in many cases, separate CMCS review. States that have historically excluded certain drug classes from managed care carve-in arrangements face the additional burden of either restructuring those carve-outs for GLP-1s or establishing parallel prior authorization coordination processes. The RFA requires states to document this coordination explicitly in their applications. States that cannot demonstrate full FFS and managed care alignment by the January 1, 2027, hard deadline risk termination from the model or being barred from supplemental rebate access, forfeiting the GLP-1 Discounted Price benefit.
State Plan Amendment Timeline Blocks Rebate Access
To participate, states must have an approved State Plan Amendment (SPA) authorizing supplemental rebate agreements (SRAs) for both fee-for-service and managed care drug claims. States that lack existing SPA authority must initiate CMS review — a process with no guaranteed turnaround time — before they can execute an SRA with any participating manufacturer. The RFA explicitly warns that states applying for SPA approval late in the process may experience approval delays that extend beyond January 1, 2027. While CMS reserves discretion to admit late-joining states, this is not guaranteed. States that miss the January 1, 2027, SA execution deadline are excluded from the model 'except at CMS discretion.' A state that invests staff resources in application preparation, managed care alignment negotiations, and legislative groundwork — only to have its SPA approval delayed — could spend 18+ months in limbo with no access to negotiated pricing, no rebate revenue, and no model protections, while still having committed Medicaid coverage to the GLP-1 drug class.
340B Rebate Adjustment Creates Undefined Financial Exposure
The model includes a provision that reduces manufacturer rebates payable to Part D plans by 'an amount not to exceed 5%' to account for GLP-1 units purchased by 340B covered entities at already-discounted prices. CMS states it will provide additional information to participating plans on the adjustment methodology. However, the source documents provide no formula, no covered entity identification methodology, and no dispute resolution process for the 340B adjustment calculation. For Part D plans with significant 340B-affiliated pharmacy networks — common in safety-net MA-PD plans and SNPs — the volume of 340B-dispensed model drug claims could be substantial, and a 5% downward rebate adjustment applied broadly could meaningfully erode the net price advantage that makes model participation financially rational. Plans cannot accurately model their net drug costs in bid submissions (due June 1, 2026) without knowing how the 340B adjustment will be calculated, creating actuarial uncertainty that could cause plans to overbid — and face risk corridor exposure — or underbid and sustain losses.
MFP-WAC Spread Inflates Gross Drug Costs Under Negotiation Program
For model drugs that have been selected under the Medicare Drug Price Negotiation Program and assigned a Maximum Fair Price (MFP), CMMI is waiving the requirement that the negotiated price reflect the MFP. Instead, gross drug costs for these drugs will be based on wholesale acquisition cost (WAC). This means the gross drug cost basis — used to calculate plan liability, reinsurance, and the risk corridor — is the higher WAC rather than the lower MFP, even though the manufacturer will provide a rebate to bring the net price to the $245 GLP-1 Discounted Price. Plans will not receive a selected drug subsidy for model drugs. This structural decision inflates gross drug cost accounting, which affects the calculation of beneficiary True Out-Of-Pocket (TrOOP) accumulation, plan liability under the Part D benefit, and CMS reinsurance calculations. Plans operating sophisticated actuarial models must recalibrate their cost projections entirely, as standard Negotiation Program assumptions do not apply. Miscalibration in the bid tool could cause plans to either over- or under-reserve for model drug claims, with risk corridor exposure beginning at ±2.5% (for narrowed corridor plans) or ±5% (for standard corridor plans) of target.
Lifestyle Support Program Compliance and Safe Harbor Conditionality
Manufacturers are required to provide a lifestyle support program at no cost to beneficiaries as a condition of model participation and as the basis for protection under the CMS-sponsored model safe harbor at 42 CFR §1001.952(ii). The safe harbor protection — which eliminates the need for a separate fraud and abuse waiver — applies only if manufacturers meet all program requirements outlined in the RFA, including recurrent digital and offline delivery, diet/nutrition education, physical activity support, medication adherence tools, and accessibility accommodations for beneficiaries with limited digital access. The RFA explicitly states that CMS 'may revisit lifestyle support requirements annually' and 'may consider shifting responsibility to states and MA-PD plans.' If CMS modifies lifestyle program requirements mid-model and a manufacturer's existing platform no longer meets the updated standards, the manufacturer faces a gap in safe harbor protection while it remedediates — a period during which manufacturer-provided beneficiary services could be characterized as prohibited remuneration. States and plans that have built member engagement workflows around manufacturer-provided platforms would simultaneously lose that infrastructure if manufacturers exit or are terminated. There is no contingency program for lifestyle support delivery if manufacturer participation lapses.