Editor's Note: Although we've come a long way in defining the specifics of healthcare transformation since the passage of the Affordable Care Act (ACA), many critical details are just now emerging in upcoming federal regulations and policy guidance. These new rules will require that all healthcare stakeholders rethink how they manage their organizations and structure their business relationships.

To help our clients navigate this volatile healthcare environment, Manatt Health offers a series of analyses, fully explaining new federal healthcare guidance and its implications. Below is a brief excerpt from our latest summary, analyzing the new Centers for Medicare and Medicaid Services (CMS) VBID proposal. To learn more about subscribing to our full series of federal healthcare guidance summaries, please contact Patricia Boozang at pboozang@manatt.com.

CMS unveiled its proposal for a VBID under Medicare Advantage. Under the proposal, plans would be able to offer a different, more favorable benefit design to specific populations with chronic illnesses. Plans have the option of providing beneficiaries in these groups with lower cost sharing when they receive high-value services, get care from providers determined to be "high value," or participate in disease management or similar programs. Plans also may provide these beneficiaries with additional benefits not offered to all of their beneficiaries.

Examples of possible interventions include reduced cost sharing for eye exams for diabetics, reduced cost sharing for heart disease patients who receive care at a cardiac center of excellence, or physician consultations via telehealth for patients with hypertension. Plans must operate in Arizona, Indiana, Iowa, Massachusetts, Oregon, Pennsylvania, or Tennessee to participate in the test, and they must certify that their planned interventions are likely to save money. Applications will likely be due in November.