CMS Expands Value-Based Medicare Advantage Model, Allows Telemedicine for Some Conditions

Aug. 11, 2016
CMS announced updates to the design of the second year of the Medicare Advantage Value-Based Insurance Design model to open the model test to new participants, add three new test states and add two additional conditions.

The Centers for Medicare & Medicaid Services (CMS) Centers for Medicare and Medicaid Innovation (CMMI) announced it had updated the design of the second year of the Medicare Advantage Value-Based Insurance Design to open the model test to new participants, add three new test states and add two additional conditions.

The updates will take effect in the second year of the Medicare Advantage (MA) Value-Based Insurance Design (MA-VBID) model, which is designed to enable Medicare Advantage plans to offer supplemental benefits or reduced cost sharing to enrollees with CMS-specified chronic conditions. The model will test whether this can improve health outcomes and lower expenditures for Medicare Advantage enrollees.

VBID generally refers to health insurers’ efforts to structure enrollee cost-sharing and other health plan design elements to encourage enrollees to consume high-value clinical services—those that have the greatest potential to positively impact on enrollee health.

“VBID approaches have increasingly been used in the commercial market, and the inclusion of clinically nuanced VBID elements in health insurance benefit design may be an effective tool to improve the quality of care and reduce the cost of care for Medicare Advantage enrollees with chronic diseases,” CMS officials stated.

Initial details for the first year of the model were released last September. Slated to begin January 1, 2017, the MA-VBID model will run for five years, and the first year will initially begin in seven states—Arizona, Indiana, Iowa, Massachusetts, Oregon, Pennsylvania, and Tennessee.

In the second year of the model, beginning January 1, 2018, CMS will open the model to new applicants and conduct the model test in three new states—Alabama, Michigan, and Texas.

In addition, for 2018, CMS also will make adjustments to existing clinical categories and change the minimum enrollment size for some MA and MA-PD plan participants. 

Eligible Medicare Advantage plans in these states, upon approval from CMS, can offer varied plan benefit design for enrollees who fall into certain clinical categories identified and defined by CMS. In 2017, those categories are diabetes, congestive heart failure, chronic obstructive pulmonary disease (COPD), past stroke, hypertension, coronary artery disease, mood disorders, and combinations of these categories. Beginning in 2018, CMS will also allow benefits for enrollees with dementia and rheumatoid arthritis.

Under the MA-VBID model, plans will be allowed to use telemedicine, specifically physician consultations via real-time interactive audio and video technologies for diabetics, or tobacco cessation assistance for enrollees with COPD.

According to CMS, the seven initial states and the new states for 2018 were selected in order to be generally representative of the national Medicare Advantage market, including urban and rural areas, areas with both high and low average Medicare expenditures, areas with high and low prevalence of low-income subsidies, and areas with varying levels of penetration of and competition within Medicare Advantage.  

CMMI developed the MA-VBID model to address the existing Medicare Advantage “uniformity” requirement that generally requires that an MA plan’s benefits and cost sharing be the same for all plan enrollees. Because of this, clinically-nuanced VBID approaches have generally not been incorporated into MA or MA-PD plans, CMS stated.

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