cms centers for medicare and medicaid services logoOn August 10, the Centers for Medicare & Medicaid Services (CMS) announced refinements to the design of the second year of the Medicare Advantage Value-Based Insurance Design (MA V-BID) model.  The MA-V-BID model is an opportunity for Medicare Advantage plans, including MA plans offering Part D benefits, to offer clinically nuanced benefit packages aimed at improving quality of care, while also reducing costs.

In the second year of the model, beginning January 1, 2018, CMS will 1) open the model test to new applicants; 2) conduct the model test in three new states – Alabama, Michigan, and Texas; 3) add rheumatoid arthritis and dementia to the clinical categories for which participants may offer benefits; 4) make adjustments to existing clinical categories; and 5) change the minimum enrollment size for some MA and MA-PD plan participants. 

Value-Based Insurance Design (V-BID) generally refers to health insurers’ efforts to structure enrollee cost-sharing and other health plan design elements to encourage enrollees to use high-value clinical services – those that have the greatest potential to positively impact enrollee health.  V-BID approaches are increasingly used in the commercial market, and evidence suggests that the inclusion of clinically-nuanced V-BID elements in health insurance benefit design may be an effective tool to improve the quality of care while reducing costs for Medicare Advantage enrollees with chronic diseases.  As part of the ‘better care, smarter spending, healthier people’ approach to improving health care delivery, CMS will test V-BID in Medicare Advantage and measure whether structuring patient cost-sharing and other health plan design elements encourages enrollees to use health care services in a way that improves their health and reduces costs.

For more information on V-BID and Medicare/Medicare Advantage, please visit our initiative webpage and view our infographic.