As part of the Health Plan Innovation Initiatives, the Medicare Advantage Value-Based Insurance Design (VBID) Model is an opportunity for Medicare Advantage plans to offer supplemental benefits or reduced cost sharing to enrollees with Centers for Medicare & Medicaid Services (CMS)-specified chronic conditions, focused on the services that are of highest clinical value to them. The model tests whether this can improve health outcomes and lower expenditures for Medicare Advantage enrollees.
Value-Based Insurance Design (VBID) generally refers to health insurers’ efforts to structure enrollee cost-sharing and other health plan design elements to encourage enrollees to consume high-value clinical services – those that have the greatest potential to positively impact on enrollee health. VBID approaches are increasingly used in the commercial market, and evidence suggests that the inclusion of clinically-nuanced VBID elements in health insurance benefit design may be an effective tool to improve the quality of care and reduce the cost of care for Medicare Advantage enrollees with chronic diseases.
The VBID Model began January 1, 2017 and will run for five years. In 2017, CMS will test the model in seven states: Arizona, Indiana, Iowa, Massachusetts, Oregon, Pennsylvania, and Tennessee. Beginning in 2018, CMS will also test the model on Alabama, Michigan and Texas.
Eligible Medicare Advantage plans in these states, upon approval from CMS, can offer varied plan benefit design for enrollees who fall into certain clinical categories identified and defined by CMS. In 2017, those categories are diabetes, congestive heart failure, chronic obstructive pulmonary disease (COPD), past stroke, hypertension, coronary artery disease, mood disorders, and combinations of these categories. Beginning in 2018, CMS will also allow benefits for enrollees with dementia and rheumatoid arthritis.
Changes to benefit design made through this model may reduce cost-sharing and/or offer additional services to targeted enrollees; however, targeted enrollees can never receive fewer benefits or have to pay higher cost-sharing than other enrollees as a result of the model. More information is available in the documents below.
The CY 2018 application period is closed, but the Request for Applications for CY 2018 (PDF) and the model test’s CY 2018 Application Actuarial Guidance (PDF) are now available for reference purposes.
For questions regarding the VBID model, please contact MAVBID@cms.hhs.gov.
- Announcement (PDF)
- Fact Sheet (updated 10/3/2016)
- Press Release
- Webinar: Changes for 2018 (08/24/2016)
- Webinar: Overview (09/24/2015)
- Responses to Stakeholder Inquiries (PDF) (updated 12/21/15)
Year 1 (2017) Materials
- 2017 Request For Applications (RFA)
- 2017 Actuarial Guidance (PDF)
- 2017 Communication Guidance (PDF)
- 2017 ICD-10 Code List (Excel format, PDF format)
Year 2 (2018) Materials
- Announcement of Year 2 Changes (PDF)
- 2018 Request for Applications (RFA) (PDF)
- 2018 Actuarial Guidance (PDF)
- 2018 Communication Guidance (PDF)