CMS Testing New VBID Model in Medicare Advantage

CMS will test whether providing Medicare Advantage organizations with the ability to integrate clinically nuance value-based insurance design (VBID) increases enrollee satisfaction, improves enrollee clinical outcomes, reduces overall plan expenditures, and results in lower plan bids, thus saving money for Medicare and beneficiaries.

VBID recognizes that the value of a given service can vary depending on the enrollee’s underlying health. VBID approaches structure enrollee cost-sharing to encourage the use of high-value services and discourage the use of low-value services.

The model test is limited to a number of chronic conditions: diabetes, chronic obstructive pulmonary disease, congestive heart failure, patient with past stroke, hypertension, coronary artery disease, and mood disorders.

Although Medicare Advantage enrollees with chronic diseases stand to potentially benefit from the use of VBID, which may effectively improve quality of care and reduce the cost, existing regulations have prevented the incorporation of VBID approaches into Medicare Advantage, the brief acknowledges.

“A key barrier to implementation of clinically nuanced VBID approaches is the uniformity requirement, which precludes varying benefit design within a plan based on health status or other enrollee characteristics.”

In order to test the Medicare Advantage Value-Based Insurance Design (MA-VBID) model, CMS will grant a limited waiver of Medicare Advantage uniformity requirements for participating organizations.

CMS will run a test of the model for 5 years, beginning January 1, 2017, in 7 states: Arizona, Indiana, Iowa, Massachusetts, Oregon, Pennsylvania, and Tennessee.

Plans design their own interventions for targeted populations, but must fit into 4 broad categories:

1. Reduced cost sharing for high-value services
2. Reduced cost sharing for high-value providers
3. Reduced cost sharing for enrollees participating in disease management or related programs
4. Clinically targeted additional supplemental benefits

“The Medicare Advantage Value-Based Insurance Design Model fills an immediate need for testing ways to improve care and reduce cost in Medicare Advantage Plans and offers the prospect of lower out-of-pocket costs and premiums along with better benefits for enrollees in Medicare Advantage,” Patrick Conway, MD, MSc, CMS deputy administrator and chief medical officer, said in a statement.

Learn more about VBID from the University of Michigan’s Center for Value-Based Insurance Design. The American Journal of Managed Care’s Co-Editor-in-Chief A. Mark Fendrick, MD, is the center’s director.