On January 1st, 2017, the Center for Medicare and Medicaid Services (CMS) launched the Medicare Advantage Value-Based Insurance Design (MA V-BID) Model Test to assess the utility of structuring consumer cost-sharing and plan elements to encourage the use of high-value clinical services and providers.  Nine MA plans in three of the seven eligible states (i.e. Massachusetts, Indiana, and Pennsylvania) were selected to enroll beneficiaries with specified chronic conditions in 2017.  In 2018, the model test will expand to three additional states and will include two additional clinical conditions.


Due to V-BID’s success in the private sector, the TRICARE V-BID pilot, and early enthusiasm for the MA demonstration, the U.S. Senate Finance Committee introduced  S.870, Creating High-Quality Results and Outcomes Necessary to Improve Chronic Care Act (CHRONIC) of 2017, a bipartisan bill that specifically calls for the expansion of the V-BID MA demonstration to all 50 states. Recently, Representative Diane Black (R-TN), along with cosponsors Earl Blumenauer (D-OR), Cathy McMorris Rodgers (R-WA), and Debbie Dingell (D-MI), introduced the V-BID for Better Care Act of 2017 (H.R. 1995), which seeks to provide national testing of the Medicare Advantage V-BID Model.

The V-BID Center White Paper, “Incorporating Value-Based Insurance Design to Improve Chronic Disease Management in the Medicare Advantage Program,” concludes that V-BID programs which reduce consumer cost-sharing for high-value services and providers are a fiscally feasible option for the Medicare program.

A review of the peer-reviewed literature reveals how increases in Medicare beneficiary cost-sharing are adversely affecting our most vulnerable beneficiaries, contributing to poor patient-centered outcomes, and, in some instances, increasing Medicare expenditures.  Actuarial modeling of MA V-BID programs for diabetes mellitus (DM), chronic obstructive pulmonary disease (COPD), and congestive heart failure (CHF) demonstrates that consumer out-of-pocket costs are reduced in all 3 conditions, plan costs increase slightly in the short term for certain conditions (DM and COPD), and plan savings result for CHF.  From the societal perspective, the DM program was close to cost neutral; net savings resulted in the COPD and CHF programs.

Applying clinically nuanced V-BID strategies presents an enormous opportunity for the Medicare program – particularly Medicare Advantage plans.  V-BID can encourage the utilization of high-value providers and services and limit the use of services that are of potentially low-value, thus helping Medicare Advantage plans improve health and quality, enhance consumer engagement, and reduce costs.

Medicare Advantage 1-Pager     Medicare Advantage White Paper     Medicare Advantage Infographic

Medicare Advantage Summary     V-BID Medicare Advantage Brief     History of V-BID in Medicare Timeline

Additional Resources      Medicare Advantage Legislation