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CMS Seeks Input on Medicare's Value-Based Insurance Design Model

Last week, CMS asked Medicare Advantage Organizations for feedback on the Medicare Advantage Value-Based Insurance Design model test that will begin on January 1, 2017.

As we reported last year, Medicare Advantage plans in Arizona, Indiana, Iowa, Massachusetts, Oregon, Pennsylvania and Tennessee will be permitted to offer what is known as “value-based insurance design” (“VBID”). Generally, VBID plans structure enrollee cost-sharing and other plan characteristics in a way that encourages the enrollees to utilize high-value health care services that are likely to improve their health status. Such plans are structured around certain clinical categories — typically chronic diseases — and have designs that are meant to reward the use of specific therapies or services by individuals falling into those clinical categories.

Medicare Advantage plans had historically been unable to take advantage of VBID designs due to a federal prohibitions against varying benefit designs within a plan based on health status or other enrollee characteristics.  To overcome this obstacle, CMS pointed to its authority under the Affordable Care Act to test innovative health care payment service delivery models.

The model test will allow Medicare Advantage Organizations to offer VBID interventions to enrollees with diabetes, chronic obstructive pulmonary disease (COPD), congestive heart failure (CHF), patients with past stroke, hypertension, coronary artery disease, and mood disorders. CMS has defined these conditions by ICD-10 codes, and is soliciting feedback on the current definition of these conditions.

CMS is also seeking suggestions for additional clinical conditions that CMS should consider in future model years. The agency has requested that stakeholders propose clinical conditions that are defined by objective criteria, such as ICD-10 codes, HCC scores, or patterns of utilization. Stakeholders have also been asked to share their views on whether Medicare Advantage Organizations should be permitted to propose new conditions as part of the annual application process.

Suggestions are due by April 18, 2016.

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