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CMS Updates Medicare Advantage Value-Based Insurance Design Model

November 27, 2017

The Centers for Medicare & Medicaid Services (CMS) has announced updates for its Medicare Advantage Value-Based Insurance Design Model. The agency plans to expand the model from the seven states, including Pennsylvania, that are currently participating to 25 states by 2019.

With value-based insurance design, insurers 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 improve enrollees’ health. CMS is exploring whether this approach can improve care quality and reduce costs for Medicare Advantage enrollees with chronic diseases.

The Medicare Advantage Value-Based Insurance Design Model began during 2017 and is set to run for five years. Pennsylvania insurers Independence Blue Cross, Highmark, and UPMC Health Plan are currently participating.

In addition to expanding the states eligible to participate in the model, CMS will:

  • Allow chronic condition special needs plans to participate
  • Allow participating plans to propose their own systems or methods for identifying eligible enrollees, in addition to defining enrollee eligibility based on the nine pre-approved chronic conditions originally put forth by CMS

To develop value-based insurance designs for identified, eligible enrollees, participating plans can use these strategies:

  • Reduce or eliminate enrollees’ cost sharing for high-value services
  • Reduce or eliminate enrollees’ cost sharing for high-value providers
  • Reduce cost sharing for enrollees participating in disease management or related programs
  • Change enrollees’ coverage to include supplemental benefits

Enrollees identified as eligible to participate in an insurer’s value-based design approach can never receive fewer benefits or be charged higher cost-sharing than other Medicare Advantage enrollees receiving the standard plan. 

Applications for Medicare Advantage organizations interested in participating in the model during 2019 are due on January 26, 2018. Existing participants also must reapply by that deadline in order to participate during 2019.  

The lessons learned from this CMS model have the potential to improve care and reduce costs for Medicare beneficiaries in Pennsylvania. The commonwealth's enrollment in Medicare Advantage plans has increased 17 percent during the past five years. About 40 percent of enrollees chose a managed plan.

For additional information, please reference the CMS fact sheet or contact Kate Slatt, HAP’s senior director, innovative payment and care delivery.

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