CMS Medicare Value-Based Care Model Expands to 3 More States

October 04, 2016 - The states of Alabama, Michigan, and Texas will be able to test the Medicare Advantage Value-Based Insurance Design model beginning on January 1, 2018, according to a fact sheet from the Centers for Medicare & Medicaid Services (CMS). During the second year of operation for the Medicare value-based care model, the CMS Center for Medicare and Medicaid Innovation will be making some changes to its design and allow new applicants to test the model.

CMS will make clinical adjustments to the Medicare value-based care model and include rheumatoid arthritis and dementia as the clinical diagnoses under which beneficiaries may receive coverage. Along with these changes, the minimum enrollment size will differ for a number of MA and MA-PD plan policyholders.

“The Medicare Advantage Value-Based Insurance Design Model fills an immediate need for testing ways to improve care and reduce cost in Medicare Advantage Plans and offers the prospect of lower out-of-pocket costs and premiums along with better benefits for enrollees in Medicare Advantage,” Patrick Conway, M.D., MSc, CMS Deputy Administrator and Chief Medical Officer, stated in a press release last year.

The Medicare Advantage Value-Based Insurance Design model will begin operating on January 1, 2017 and continue for the following five years, CMS reports. The program will begin operating in Alabama, Michigan, and Texas in 2018, but in the meantime, the Medicare value-based care model will be tested in Arizona, Indiana, Iowa, Massachusetts, Oregon, Pennsylvania, and Tennessee throughout the 2017 year.

The states chosen to participate in the Medicare value-based care model are meant to represent the general population served by Medicare Advantage plans. Commercial health payers will be able to see the results from these programs on an annual basis and consider which aspects of the program are relevant for their own adoption.

Medicare Advantage plans operating the model in these states will be able to provide differing plan benefit design to beneficiaries positioned in relevant clinical categories. The different types of clinical categories include hypertension, coronary artery disease, diabetes, congestive heart failure, chronic obstructive pulmonary disease, stroke, and mood disorders.

Starting in 2018, the clinical categories for rheumatoid arthritis and dementia will also be included in the Medicare value-based care model. Medicare Advantage plans participating in the program will also be able to design tailored interventions among patients who have combinations of these medical conditions.

Medicare Advantage beneficiaries may see a reduction in their cost sharing expenses since the program was designed to eliminate or decrease some forms of cost sharing targeted toward high-value services including Part D drug prescription coverage. For instance, the Medicare value-based care model is looking to eliminate copays for diabetic patients in need of eye exams.

Additionally, patients may also have their cost sharing reduced if receiving care from providers identified as high value. An example may be when a patient with heart disease receives treatment from a high-performing cardiac center.

“Other chronic conditions that might benefit from a clinically nuanced VBID benefit design may be added in subsequent model years,” a memorandum from CMS states. “Organizations may design their own interventions for each targeted population, but plan benefit changes must fit into four broad categories: (1) reduced cost sharing for high value services, (2) reduced cost-sharing for high-value providers, (3) reduced cost-sharing for enrollees participating in disease management or related programs, and (4) clinically targeted additional supplemental benefits.”

The Medicare Advantage Value-Based Insurance Design model will be available to all Medicare Advantage plans operating in the test states. Among the test states, the minimum enrollment numbers in the Medicare Advantage plans must hit 2,000 beneficiaries.

However, in early 2018, Medicare Advantage organizations with at least one health plan including enrollment over 2,000 policyholders may receive an additional benefit package for plans with a minimum enrollment of 500 beneficiaries, according to the CMS fact sheet.

CMS has been moving toward adopting new value-based care models such as the accountable care organization as well as implementing alternative payment models with a goal of transforming 50 percent of all Medicare reimbursement toward a value-based payment system. Private payers are also following in the footsteps of CMS and investing in value-based care reimbursement.

For example, Mark Slitt, Spokesman and Public Relations Manager at Cigna, stated in an interview that the national payer Cigna has been moving forward with value-based care since 2008.

“Cigna has been a leader in value-based care reimbursement since 2008 and we are well on the way to having value-based reimbursements represent the majority of our arrangements with providers by 2018,” Slitt told HealthPayerIntelligence.com. “This is fundamentally changing the relationship between payers and providers by making the relationship much more collaborative. There is now much more focus on working together to improve quality and affordability so that the customers or patients we jointly serve have better outcomes and enjoy a better experience.”

Dig Deeper:

How Payers Should Prepare for Value-Based Reimbursement

What Are the Benefits of Accountable Care Organizations?