Medicare Advantage Value-Based Insurance Design Model: Increasing Beneficiary Engagement

Guest post by Ken Perez, vice president of healthcare policy, Omnicell.

Ken Perez
Ken Perez

“I get by with a little help from my friends.”– The Beatles

In simple terms, healthcare delivery reform under the Patient Protection and Affordable Care Act (ACA) is catalyzed by the Centers for Medicare and Medicaid Services (CMS) through establishment of performance standards or goals and application of behavioral economics—financial carrots and sticks—to encourage improved quality and reduced cost. The financial incentives—both positive and negative—are usually offered to healthcare provider organizations, such as accountable care organizations, which are on the hook to meet numerous quality measures and hold costs below targeted benchmarks, or commercial health insurers running Medicare Advantage plans, which pass along some of the onus to maintain quality performance onto providers.

However, these applications of behavioral economics do not directly target or impact the central player in the healthcare system—the individual member or patient. Engagement by the patient in their care is critical and explains why billions of dollars are spent each year on patient outreach and communications, as well as development and promotion of consumer-friendly apps and wearable devices. When patients are engaged, the healthcare system can more effectively and efficiently prevent, diagnose and treat health conditions.

On Sept. 1, 2015, CMS’s Center for Medicare and Medicaid Innovation (Innovation Center) announced the Medicare Advantage (MA) Value-Based Insurance Design (VBID) Model, an initiative that will test whether allowing health plans administering MA plans to offer targeted additional benefits or reduced cost sharing to enrollees who have certain chronic conditions will result in better quality and more cost-effective care.

The model’s goals are to enhance enrollee health, decrease the use of avoidable high-cost care, and reduce costs for MA plans, beneficiaries, and ultimately, the Medicare program. The model focuses on MA enrollees with the following chronic conditions: diabetes, congestive heart failure, chronic obstructive pulmonary disease (COPD), past stroke, hypertension, coronary artery disease, and mood disorders.

The MA VBID Model will take effect Jan. 1, 2017, and run for five years in seven states which were deemed representative of the overall national MA market: Arizona, Indiana, Iowa, Massachusetts, Oregon, Pennsylvania, and Tennessee.

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