The Centers for Medicare & Medicaid Services (CMS) is making extensive revisions to its Medicare Advantage (MA) Value-Based Insurance Design model in order “to contribute to the modernization of Medicare Advantage through increasing choice, lowering cost, and improving the quality of care for Medicare beneficiaries.”

By way of background, the VBID innovation model was launched in 2017 to test how MA plans in seven states can use health plan design elements (e.g., supplemental benefits, disease management, or reduced cost sharing) to encourage enrollees with specified chronic conditions to use high-value clinical services or high-value providers that improve quality of care while reducing costs. CMS subsequently expanded the program to additional states.

CMS recently announced that for CY 2020, the MA VBID model will be expanded to all 50 states, as was mandated by the Bipartisan Budget Act of 2018. CMS also is expanding the model to other types of MA plans, including all types of Special Needs Plans. Furthermore, CMS is allowing plans to test additional benefit modifications, including:

  • Non-uniform benefit design to provide reduced cost-sharing or additional supplemental benefits based on enrollees’ health condition and/or socioeconomic status factors (specifically, low-income subsidy eligibility or dual-eligible status). Plans may also propose supplemental benefits which are “non-primarily health related” for all enrollees by disease state, regardless of socioeconomic status.
  • Greater flexibility to offer “Rewards and Incentives” programs, with higher-value individual rewards more closely reflecting the expected benefit of the service/activity, in order “to better promote improved health, prevent injuries and illness, and promote the efficient use of health care resources.” For example, for MA prescription drug plans, Rewards and Incentives programs could be used to encourage use of disease state management programs, medication therapy management, preventive health services, and consideration of less costly clinically-equivalent medication alternatives.
  • Expanded use of telehealth networks, including allowing telehealth networks to comprise up to one-third of the required in-network providers for a specialty if certain conditions are met.
  • A mandatory requirement that participating organizations provide timely access to Wellness and Health Care Planning, including advance care planning (e.g., advance directives).

The CY 2020 VBID application period runs through March 1, 2019. Looking ahead to 2021, CMS intends to use the VBID model to test the inclusion of the Medicare hospice benefit in Medicare Advantage.