Medicare Advantage Value-Based Insurance Design Model



Through the Medicare Advantage Value-Based Insurance Design (VBID) Model, CMS is testing a broad array of complementary Medicare Advantage (MA) health plan innovations designed to reduce Medicare program expenditures, enhance the quality of care for Medicare beneficiaries, including those with low incomes such as dual-eligibles, and improve the coordination and efficiency of health care service delivery. Overall, the VBID Model contributes to the modernization of MA and tests whether these model components improve health outcomes and lower expenditures for MA enrollees.

For plan year 2021, 19 Medicare Advantage Organizations (MAOs) (List) offering MA benefits to plan benefit packages (PBPs) with 4.6 million projected enrollees will provide tailored Model benefits and rewards and incentives to over 1.6 million projected enrollees in 45 states, the District of Columbia and Puerto Rico. Out of the 19 MAOs, nine are participating in the Hospice Benefit Component.
  • CVS Health Corporation (Aetna, Inc.)
  • Blue Cross Blue Shield of Michigan
  • Blue Cross Blue Shield of Rhode Island
  • CareOregon, Inc.
  • Capital District Physicians' Health Plan, Inc.
  • Commonwealth Care Alliance, Inc.*
  • Hawaii Medical Service Association*
  • HealthFirst
  • Highmark Health
  • Humana, Inc.*
  • Summit Master Company, LLC*
  • Kaiser Foundation Health Plan, Inc.*
  • Presbyterian Healthcare Services*
  • Intermountain Health Care, Inc.*
  • Sentara Health Care
  • Triple-S Management Corporation*
  • UnitedHealth Group, Inc.
  • UPMC Health System
  • Visiting Nurse Service of New York*
    *Indicates participation in the Hospice Benefit Component of the VBID Model for Calendar Year 2021


MA plans offer Medicare beneficiaries an alternative to Original Medicare, also referred to as “Fee-for-Service.” In addition to covering all Medicare services, some MA plans also offer Medicare beneficiaries extra coverage through supplemental benefits, such as vision, hearing, and dental services. Additionally, some MA Plans also offer prescription drug coverage (Part D) as part of their plan.

MA plans can charge different out-of-pocket costs for certain services within guidelines defined by Medicare. VBID generally refers to health insurers’ efforts to structure cost-sharing and other health plan design elements to encourage enrollees to use the services that can benefit them the most.

Additionally, currently, Medicare Beneficiaries may enroll into MA and have access to all original Medicare benefits plus additional supplemental benefits beyond what original Medicare covers. Historically, when an MA enrollee elects hospice, Fee-For-Service (FFS) Medicare becomes responsible for most services while the MA organization retains responsibility for certain services (e.g., supplemental benefits). This hospice “carve-out” from MA results in a convoluted set of coverage rules for MA enrollees who elect hospice and fragments accountability for care and financial responsibility across the care continuum.

Initiative Details

The VBID  Model tests a broad array of MA service delivery and/or payment approaches and contributes to the modernization of MA through increasing choice, lowering cost, and improving the quality of care for Medicare beneficiaries.

The VBID Model allows Medicare Advantage organizations (MAOs) to further target benefit design to enrollees based on chronic condition and/or socioeconomic characteristics and/or incentivize the use of Part D prescription drug benefits through rewards and incentives. MAOs may also offer the Medicare hospice benefit to its enrollees (as described below) as part of the VBID Model. Additionally, the VBID model requires that all participating plans engage their enrollees through structured and timely wellness and health care planning, including advanced care planning.

Beginning in Calendar Year (CY) 2021, and in response to President’s Executive Order 13890 on Protecting and Improving Medicare for Our Nation’s Seniors, the VBID Model will test the following Model Components. All participating MAOs must participate in the mandatory Wellness and Health Care Planning component of the VBID Model in 2022. Eligible MAOs will be able to apply to test one or more of the other interventions in CY 2022.

  1. Wellness and Health Care Planning
  2. VBID Flexibilities
    1. Targeted to beneficiaries based on chronic condition and/or socioeconomic status:
      1. Primarily and Non-primarily health-related Supplemental Benefits, which may include new and existing technologies or FDA approved medical devices
      2. Use of high-value providers and/or participation in care management programs/disease management programs
      3. Reductions in cost sharing for Part C items and services and covered Part D drugs;
    2. Offered Uniformly Across All Beneficiaries (i.e., non-targeted):
      1. NEW – Flexibility to Share Beneficiary Rebates Savings More Directly with Beneficiaries in the form of cash or monetary rebates
  3. Part C and D Rewards and Incentives Programs (RI Programs)
  4. Medicare Hospice Benefit Component (Separate RFA)

For more details on these Model Components please see the links to the VBID and VBID Hospice Benefit Components Requests for Applications (RFA) below.

Hospice Benefit Component

The Centers for Medicare & Medicaid Services announced in January 2019 that beginning in CY 2021, through the VBID Model, participating MAOs could include the Medicare hospice benefit in their Part A benefits package.

Under the Model in CY 2021, nine MA organizations, through 53 PBPs, will participate in the Hospice Benefit Component of the VBID Model. These PBPs will test the Hospice Benefit Component in service areas that cover 206 counties.

A downloadable list of PBPs with service area and contact information can be found here: VBID CY2021 Hospice Benefit Contact Information (XLS)

By including the Medicare hospice benefit in the MA benefits package, CMS will test the impact on service delivery and quality of MA plans providing all original Parts A and B Medicare items and services required by statute. Additionally, CMS is testing how the hospice benefit component can improve beneficiary care through greater care coordination, reduced fragmentation, and transparency in line with recommendations by the Office of Inspector General (OIG), the Medicare Payment Advisory Commission (MedPAC) and others. CMS will require that MAOs provide beneficiaries with broad access to the complete original Medicare hospice benefit. MAOs participating in the hospice benefit component will be required to outline how they will provide palliative care to eligible enrollees, irrespective of the election of hospice, and may make transitional, concurrent care services as well as hospice-specific supplemental benefits available to enrollees who elect hospice through network hospice providers.

For technical and operational guidance, please reference the CY2021 Hospice Benefit Component Technical and Operational Guidance. Visit the Hospice Benefit Component overview page for further information.

CY 2022 Materials

CY 2021 Materials

Additional Information

On November 15, 2019 the OIG issued a waiver (PDF) for certain beneficiary incentives provided by Medicare Advantage Organizations in the VBID Model.


CY 2022 Webinars & Recordings

CY 2021 Webinars & Recordings

Evaluation Reports

Latest Evaluation Reports

Prior Evaluation Reports

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