Medicare provides health insurance to 54 million elderly and disabled Americans. Enrollment is expected to increase rapidly in coming years, as 10,000 baby boomers becoming eligible for Medicare each day. However, without action, the costs of Medicare—both per enrollee and growth in spending—threaten the program’s solvency. While predictions are less dire than previously expected, there is still much work to be done to align spending, quality, and care.
Currently, enrollees in Medicare fee-for-service (FFS) face a “one-size-fits-all” approach to cost sharing. However, Medicare Advantage (MA) plans offer a unique opportunity to break out of the current mold of fee-for-service delivery and payment. As outlined in a V-BID brief on Medicare Advantage, private health plans have flexibility to use care management techniques to promote evidence-based, high value network formation, high performing provider-facing interventions (e.g., bonuses for quality and high performance), and utilization management programs to identify under-utilization as well as over-utilization of particular medical goods, services, and devices.
To date, V-BID has also testified in front of the House Ways and Means Committee on the topic, and is currently cited in a recent request for information (RFI) issued by the Centers for Medicare & Medicaid Services (CMS) seeking innovation in Medicare health plans, Medigap and Retiree Supplemental health plans.
State legislators have also explored utilizing V-BID principles in Medicare. Last month, U.S. Senators John Thune (R-SD) and Debbie Stabenow (D-MI) introduced bipartisan, bicameral legislation to establish a three-year demonstration program allowing participating Medicare Advantage plans to test V-BID principles. In July, a companion bill was introduced by House Representatives Diane Black (R-TN) and Earl Blumenauer (D-OR). The introduction of this bicameral, bipartisan legislation is made further significant by the fact that the two sides of the isle managed to see eye-to-eye on what can easily be classified as the most divisive issue in Washington: health care.
V-BID has generated significant interest as a non-partisan option that may align spending and improve quality of care in Medicare Advantage. As stakeholders consider options to sustain Medicare, the V-BID Center offers the following recommendations:
- MA plans should have the flexibility to vary cost sharing for a particular service according to where a service is provided and by whom.
- MA plans should have the flexibility to impose differential cost-sharing based on clinical evidence.
- MA plans should have the flexibility to set enrollee cost-sharing based on clinical information, such as diagnosis.
Medicare is a vitally important program to all Americans. Interest from CMS and on Capitol Hill to test V-BID innovations in Medicare is one part of a multi-pronged approach to securing the program’s future. Creating a Medicare program that incorporates V-BID has the potential to address the substantial variation in value across health care services and providers. It also has the potential to improving health care quality while reducing costs. As Senator John Thune put it, “it’s a win-win for patients and taxpayers.”
