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On September 1, 2015, the Centers for Medicare and Medicaid Services (CMS) issued an announcement concerning a demonstration called the Medicare Advantage (MA) Value-Based Insurance Design (VBID) model. (See: 

As described by CMS, 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.” (See CMS website at:   

In general, there are various approaches to VBID that can rely on either so-called “carrots” – positive incentives to use higher value services and/or providers by, for example, reducing or eliminating cost-sharing – and/or “sticks” – means to steer individuals away from lower-value services or providers by, for example, increasing cost-sharing for such services and providers. 

CMS’ proposed VBID Model will run for five years beginning in January 2017 in the following states: Arizona, Indiana, Iowa, Massachusetts, Oregon, Pennsylvania, and Tennessee.  As described by CMS, this model “is an opportunity for Medicare Advantage plans to offer supplemental benefits or reduced cost sharing to enrollees with [CMS]-specified chronic conditions, focused on the services that are of highest clinical value to them. The model will test whether this can improve health outcomes and lower expenditures for Medicare Advantage enrollees.”

Center for Medicare Advocacy Comments

On September 15, 2015, the Center submitted comments to CMS on the MA-VBID model drafted in collaboration with several other advocacy organizations.

Overall, our comments identify components of the VBID model that we support, and relay suggestions intended to strengthen the model and ensure that the proposed MA VBID demonstration fully meets the needs of Medicare beneficiaries.

We commend CMS for including many essential beneficiary protections, including: making the demonstration voluntary for plan enrollees (opt-in);  an allowance for only lowered cost-sharing and additional benefits for high-value services and care (a “carrots-only” approach); prohibited marketing of VBID programs; and the retention of critical Medicare Advantage anti-discrimination rules that prevent MA plans from denying, limiting or conditioning coverage or provision of benefits based on any health status-related factors.

Suggestions the Center and other advocates offer to improve the model include: making lessons learned from this model publically available and, as appropriate, integrating promising practices into the Traditional Medicare program and beyond; making plans’ rationale for identifying both “high-value” care and providers transparent and publicly available; rigorously monitoring the demonstrations, including access to high-value health care providers; developing uniform beneficiary and provider communications; and continued stakeholder engagement.

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