CMS Announces Expansion of the Medicare Advantage Value-Based Insurance Design Model

The Centers for Medicare & Medicaid Services (CMS) announced plans to expand the Medicare Advantage (MA) Value-Based Insurance Design (VBID) model to more states and more conditions in 2018 without the experience of the first year’s launch, which begins in January 2017. The schedule underlines the Administration’s goal of rapidly expanding the use of innovative payment and delivery models that emphasize quality and good outcomes rather than volume of services. VBID models have been used in the private sector to better manage the costs and care of persons with high healthcare needs and the Medicare population, which has the largest number of persons with chronic care conditions, and offers the potential to see even better results for more people.

Under the demonstration, the requirement that the MA benefit package be uniform for all enrollees will be waived. The uniformity provision was adopted many years ago to ensure health plans did not use benefit design to exclude persons with conditions and disabilities requiring the use of many services and prescription drugs. Fortunately, over time, policymakers and plans have seen the value of programs that better manage the conditions of persons with chronic conditions, such as disease management programs, although participation has been lower than expected. The VBID model will allow MA plans to lower cost sharing, add services, and target providers considered “high value” for the selected chronic condition. MA and Part D plans will still be required to offer uniform benefits under the new model for all plan members with the target condition. As a beneficiary protection, participants in the VBID program can never pay more than other MA enrollees for their services or receive fewer benefits.

For 2018, the new states eligible to participate will include Texas, Michigan, and Alabama. Seven states and seven chronic conditions were selected for the first year of the demonstration.  Participating plans will be announced in September 2016. The additional chronic conditions that will be available for VBID participants include rheumatoid arthritis and dementia. The second year model test program will allow MA organizations with at least one plan or a parent organization with one plan with 2,000 or more enrollees to offer VBID enrollment to other Plan Benefit Packages (PBPs) with at least 500 enrollees, thus expanding the number of participating plans and VBID participants.

CMS will conduct a webinar of the second year changes on August 24, 2016, at 2:00 pm EST.  Participants may register at https://innovation.cms.gov/resources/vbid-2018changes.html.

CMS plans to issue a Request for Applications for the second year VBID model test program in the fall of 2016. Information on how to apply can be found at http://innovation.cms.gov/initiatives/VBID.

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