CMS targets Medicare Advantage for alternative model

Wednesday, September 2, 2015

BALTIMORE – CMS has announced plans to test a Value-Based Insurance Design Model to improve care and reduce costs in Medicare Advantage plans.

The model will test whether giving MA plans flexibility to offer supplemental benefits or reduced cost sharing to enrollees with specific chronic conditions can lead to higher quality and more cost-efficient care. It will focus on enrollees with chronic conditions like diabetes, congestive heart failure, COPD, past stroke and hypertension.

“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,” said Patrick Conway, M.D., MSc, CMS deputy administrator and chief medical officer.

The model will begin Jan. 1, 2017, and run for five years in Arizona, Indiana, Iowa, Massachusetts, Oregon, Pennsylvania, and Tennessee.

VBID models are increasingly used in the commercial insurance market and evidence points to the model as an effective tool, CMS says.