Medicare Advantage Value-Based Insurance Design Model – Program

On September 1, 2015 the Center for Medicare and Medicaid Innovation announced the Medicare Advantage Value-Based Insurance Design model (MA-VBID). The term "value-based insurance" design generally refers to an approach to 1) structure the amount of a member’s cost sharing or 2) provide supplemental benefits to encourage the consumption of “high-value” clinical services that positively impact the member’s health and reduce the overall cost of care. The ultimate objective of the VBID model is to improve the quality of care provided to enrollees as well as reduce the cost to the Medicare Advantage program.

Before the introduction of this pilot program, Medicare Advantage (MA) plans were not able to implement value-based designs due to the Centers for Medicare and Medicaid Services (CMS) regulatory requirements for uniform benefit designs. Unless they participated in this program, plans were not allowed to vary the benefits based on the health status or other characteristics of the enrollee. The new pilot program was designed to provide plans the flexibility to modify benefit designs to encourage members to seek high value clinical services. More recently, CMS announced model changes for CY 2018. During the initial year of the program (2017), CMS will test the effectiveness of the program in seven states: Arizona, Indiana, Iowa, Massachusetts, Oregon, Pennsylvania, and Tennessee with the addition of Alabama, Michigan, and Texas for CY 2018.

For 2017, the VBID programs target members with the following clinical conditions:

  • Diabetes
  • Congestive heart failure
  • Chronic obstructive pulmonary disease (COPD)
  • Past stroke
  • Hypertension
  • Coronary artery disease
  • Mood disorders
  • and/or a combination of these conditions

During 2018, Dementia and Rheumatoid Arthritis will also be included. CMS also recently announced that 11 plans are participating in the program during 2017. CMS expects the application process for the model test for CY 2018 to generally resemble the CY 2017 process, and interested organizations are encouraged to begin preparing submissions on that basis. Additional information regarding the program is available at: DST understands the significance of implementing this type of program, has evaluated our offerings, and is prepared to assist you in developing and implementing the most effective and efficient designs to maintain administrative productivity. This is an opportunity to engage members more actively in their care utilization decisions and drive toward lower costs of care and improved outcomes. We’re here to help you and your members.

For more information on how DST can be a resource for your health plan, contact us at 877.272.4799 or

Judith Nelson
Judith Nelson
Director, Medicare Advantage Strategy

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