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CMS Medicare Advantage Value-Based Insurance Design Initiative to Expand

CMS Medicare Advantage Value-Based Insurance Design Initiative To Expand

In our May 23, 2016 blog and June 23, 2016 podcast, we discussed the Centers for Medicare and Medicaid Services (CMS) pursuit of a strategy to create a ‘National Model of Care’. CMS understands that not everyone is in need of an Interdisciplinary Care Team (ICT) and Individualized Care Plan (ICP), but almost everyone in the healthcare system needs some sort of intervention plan to address gaps in care to improve health outcomes.

Out of the gate, CMS has focused on Medicare Advantage Special Needs Plans (SNPs) and Medicare-Medicaid Plans (MMPs), both of which have many dual eligible beneficiaries who dominate health spend in the nation for both acute and long-term care. However, CMS is also worried about the chronic co-morbidities evident in the mainstream Medicare world (traditional fee-for-service and Medicare Advantage). Those with two or more co-morbidities amount to over 90% of all Medicare spending.

To address the concerns on the broader population, CMS has introduced the Value Based Insurance Design (VBID) initiative in Medicare Advantage in seven pilot states in 2017. The VBID is a first step in CMS’ plan to target appropriate benefits and care management services in mainstream programs that match a Medicare enrollee’s actual risk and needs.

Traditionally, mainstream Medicare Advantage plans have been one-size-fits-all designs, in which all enrollees have the same benefits and cost-sharing. With the VBID, plans in the pilot states may fashion benefits and services for a subset of their population in need of additional interventions. In this case, plans will be able to offer additional benefits and incentives, as well as reduce cost sharing to incent the use of value-added services (PCP, specialist, and other preventive services). In addition, CMS expects plans to wrap disease and care management around these revised benefit offerings.

Notwithstanding the fact that the program has yet to be launched, CMS announced this month its intent to expand the initiative in 2018, however so slightly. This will include additional states in which the initiative will be piloted, as well as the inclusion of more conditions. For 2018, Texas, Michigan, and Alabama will be added to the 2017 roster, which includes: Arizona, Indiana, Iowa, Massachusetts, Oregon, Pennsylvania, and Tennessee.
Rheumatoid arthritis and dementia will join the 2017 roster of chronic conditions, which includes: diabetes, congestive heart failure, chronic obstructive pulmonary disease (COPD), past stroke, hypertension, coronary artery disease, and mood disorders.

VBID Initiative Expansion

Items in blue are new for 2018

While we know CMS has offered little incentive for plans to volunteer for the VBID initiative (in fact there will be financial costs and administrative complexity), we encourage health plans to participate where they can (even if you are not a 2017 participant you can enter for 2018) or at least study the design and approach. It is a fair bet that this National Model of Care will emerge in the not-too-distant future in all lines of business. Plans will need to think about implementing the following for all members:

  • Assess all members for health risks and conditions
  • Identify and stratify these populations
  • Fashion interventions appropriate to care needs for each member, up to and including complex case management
  • Identify care gaps to improve health outcomes

We think CMS is on to something … if successful, we will finally move the focus of the American health system from penny-saving utilization management to dollar-saving and proactive care management.

Marc Ryan

Marc S. Ryan serves as MedHOK’s Chief Strategy and Compliance Officer. During his career, Marc has served a number of health plans in executive-level regulatory, compliance, business development, and operations roles. He has launched and operated plans with Medicare, Medicaid, Commercial and Exchange lines of business. Marc was the Secretary of Policy and Management and State Budget Director of Connecticut, where he oversaw all aspects of state budgeting and management. In this role, Marc created the state’s Medicaid and SCHIP managed care programs and oversaw its state employee and retiree health plans. He also created the state’s long-term care continuum program. Marc was nominated by then HHS Secretary Tommy Thompson to serve on a panel of state program experts to advise CMS on aspects of Medicare Part D implementation. He also was nominated by Florida’s Medicaid Secretary to serve on the state’s Medicaid Reform advisory panel.

Marc graduated cum laude from the Edmund A. Walsh School of Foreign Service at Georgetown University with a Bachelor of Science in Foreign Service. He received a Master of Public Administration, specializing in local government management and managed healthcare, from the University of New Haven. He was inducted into Sigma Beta Delta, a national honor society for business, management, and administration.

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