V-BID X: A Template for Aligning Cost Sharing With Value of Services

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The University of Michigan Center for Value-Based Insurance Design (V-BID), in collaboration with a group of healthcare stakeholders, has announced the details of V-BID X, a template for reducing cost sharing for certain high-value services and raising cost sharing for certain low-value services while not increasing premiums or deductibles.

The cost-neutral template will serve as a new plan option for the individual health insurance market. VBID principles, which align patient cost sharing with the value of a select service, has gained traction in recent years, with CMS expanding the VBID demonstration in Medicare Advantage to all 50 states. However, several challenges, including a lack of standardization, have created barriers to more widespread implementation of VBID. V-BID X hopes to address and mitigate these challenges.

“While we’ve had some implementation in the private sector, in the Medicare program, and the Tricare program, implementation of VBID has slowed for a number of reasons,” said The American Journal of Managed Care^®’s (AJMC^®’s) co-editor-in-chief A. Mark Fendrick, MD, professor of medicine in the School of Medicine, professor of health management and policy in the School of Public Health, and director of the VBID Center at the University of Michigan, during a webinar introducing the template.

“I think 2 that are most notable are lack of a standard VBID plan, and there’s been a lot of concern regarding the cost impact or the return on investment that comes with the increased utilization of high-value services, particularly those whose cost sharing is lowered in a VBID high-value service type model,” he added.

Collaborating with Covered California, Blue Cross Blue Shield Association, America’s Health Insurance Plans, Massachusetts Health Connector, and CMS, the V-BID Center came up with guiding principles plans to identify high- and low-value services, including:

Favoring services with a stronger evidence base and external validation
Favoring services with a high likelihood of being high or low value independent of clinical context
Focusing on areas with the most need for improvement
Considering equity, adverse selection, impact on special populations, and the risk pool

Following the guiding principles, stakeholders created the first iteration of VBID X, which included 9 high-value services with no cost sharing:

Glucometers
Glucose test strips
Low-density lipoprotein testing
Glycated hemoglobin testing
Cardiac rehabilitation
International normalized ratio testing
Pulmonary rehabilitation
Peak flow meters
Blood pressure monitors

The template also contains high-value generic drugs with no cost sharing, with the first iteration including antiretrovirals for HIV, anti-depressants, antipsychotics, statins, beta blockers, and naloxone, as well as high-value branded drugs with reduced cost sharing, including pre-exposure prophylaxis for HIV, hepatitis C direct-acting agents, and anti-TNF agents.

Specific low-value services include spinal fusions, vertebroplasty and kyphoplasty, vitamin D testing, and proton beam for prostate cancer.

Commonly overused service categories identified by working groups include:

Outpatient specialist services
Outpatient labs
High-cost imaging
X-rays and other diagnostic imaging
Outpatient surgical services
Non-preferred branded drugs

During the webinar, AJMC^® co-editor-in-chief Michael E. Chernew, PhD, Leonard D. Schaeffer Professor of Health Care Policy and director of Healthcare Markets and Regulation Lab at Harvard Medical School, emphasized that the identified services represent just 1 version of what a plan could look like, with payers having significant flexibility in how they can design their version of V-BID X to fit their populations by selecting high- and low-value services and then determining the reduction or increase in cost sharing for those services and determining the actuarial value of the plan.

“Whether or not the numbers balance in your population will depend on the characteristics and the utilization patterns of your population,” he explained.