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Opportunities for V-BID in Medicare Advantage

A growing body of evidence demonstrates  that increases in patient cost-sharing lead to decreases in the use of both non-essential and essential care.  Medicare beneficiaries, many of whom manage multiple chronic conditions, are not removed from this phenomenon.

Due to misaligned incentives, Medicare beneficiaries receive too little high-value care and too much low-value care.  Although the Medicare statute provides for coverage of certain preventive servicemedicares identified by the U.S. Preventive Services Task Force (USPSTF) with zero cost-sharing, the fee-for-service (FFS) program allows little flexibility to implement clinically driven benefits.

For example, cost-sharing for all clinician visits, diagnostic tests, and prescription drugs is typically implemented in a “one-size-fits-all” way.  Under the fee-for-service Medicare program, this is the required approach.

Transitioning from a volume-driven to value-based delivery system requires a change in both how we pay for care and how we engage consumers to seek care.  Value-Based Insurance Design is an innovative approach that can address this problem.

Applying clinically nuanced strategies in benefit design presents an enormous opportunity for the Medicare program–particularly Medicare Advantage (MA) plans.  In contrast to FFS Medicare, private health plans participating in MA have the flexibility to use care management techniques to promote evidence-based care, including a limited ability to adjust benefit design.  The compendium of MA tools includes network formation, provider facing-interventions (e.g., bonuses for quality and high performance), and utilization management programs to identify under-utilization as well as over-utilization.  From the consumer engagement perspective, however, MA plans could further enhance their ability to serve beneficiaries if they had greater ability to use benefit design and clinically nuanced cost-sharing to promote value.

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.

Read more about implementing V-BID in Medicare Advantage including Dr. Fendrick’s recent testimony to the House Ways and Means Subcommittee on Health.

Medicare Advantage 1-Pager    History of V-BID in Medicare Timeline    V-BID Medicare Advantage Brief

V-BID MA Infographic    Medicare Advantage Blog Post    UM V-BID Findings Article

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