Fact Sheets

Value-Based Insurance Design Model (VBID) Fact Sheet CY 2020


The Centers for Medicare & Medicaid Services (CMS) is announcing a broad array of Medicare Advantage (MA) health plan innovations that will be tested in the Value-Based Insurance Design (VBID) model for CY 2020. The VBID model is being tested under the authority of the CMS Center for Medicare and Medicaid Innovation (Innovation Center). The model is designed to reduce Medicare program expenditures, enhance the quality of care for Medicare beneficiaries, including dual-eligible beneficiaries, and improve the coordination and efficiency of health care service delivery. The changes to the VBID Model announced today aim to contribute to the modernization of Medicare Advantage through increasing choice, lowering cost, and improving the quality of care for Medicare beneficiaries.

For CY 2020, and consistent with the requirements of the Bipartisan Budget Act of 2018, eligible Medicare Advantage health plans in all 50 states and territories may apply for the health plan innovations being tested under the VBID model.

In addition to currently eligible plan types, Regional Preferred Provider Organizations (RPPO) and all Special Needs Plan (SNP) types – Chronic Condition SNPs (C-SNP), Dual Eligible SNPs (D-SNP), and Institutional SNPs (I-SNP) – are allowed to apply to the VBID Model for 2020.

For the CY 2020 VBID application period, which is open now through March 1, 2019, eligible Medicare Advantage organizations may apply to test one or more of the following new interventions:

VBID Intervention


Value-Based Insurance Design by Condition, Socioeconomic Status, or both

Non-uniform benefit design to provide reduced cost-sharing or additional supplemental benefits for enrollees based on condition and/or certain socioeconomic (i.e. low-income subsidy eligibility or dual-eligible) status

Medicare Advantage and Part D Rewards and Incentives Programs

Meaningful and focused Medicare Advantage and Part D Rewards and Incentives programs

Telehealth Networks

Increased access to telehealth services by allowing plans to propose using access to telehealth services instead of in-person visits, as long as an in-person option remains, to meet certain requirements for the provider network

Wellness and Health Care Planning

Timely, coordinated approaches to wellness and health care planning, including advance care planning.  This is a required component for all VBID participating MA plans.

Beginning in CY 2021, the VBID model will also test including the Medicare hospice benefit in Medicare Advantage. CMS will release additional information and guidance on this intervention for interested stakeholders in the coming months through the VBID model website, and through open-door forum type events.

Additionally, in order to be able to sufficiently evaluate the impact on cost and quality of these different approaches, CMS is extending the performance period of the VBID model by an additional three years, through 2024.

Please refer to the VBID CY 2020 Request for Applications for additional detail on 2020 interventions, as well as how to apply at

VBID Model Background

Beginning in January 2017, the VBID model began testing the impact of providing eligible Medicare Advantage plans the flexibility to offer reduced cost sharing or additional supplemental benefits to enrollees with select chronic conditions, focusing on the services that are of highest clinical value to them. The model tested whether providing this flexibility could improve health outcomes and reduce expenditures for Medicare Advantage enrollees.

In 2017, CMS tested the VBID model in seven states, Arizona, Indiana, Iowa, Massachusetts, Oregon, Pennsylvania, and Tennessee, and allowed testing of VBID interventions for the following disease states: diabetes, congestive heart failure, chronic obstructive pulmonary disease (COPD), past stroke, hypertension, coronary artery disease, mood disorders, and combinations of these categories.

In 2018, CMS updated the model to include Alabama, Michigan, and Texas and also allowed for VBID interventions for dementia and rheumatoid arthritis.

For 2019, CMS updated the model to include organizations in fifteen additional states, California, Colorado, Florida, Georgia, Hawaii, Maine, Minnesota, Montana, New Jersey, New Mexico, North Carolina, North Dakota, South Dakota, Virginia, and West Virginia to apply and allowed participants to propose a methodology that either 1) identifies enrollees with different chronic conditions than those previously established by CMS or 2) revises the existing approved CMS chronic condition category to focus on a broader or smaller subset of the existing chronic condition.

The Bipartisan Budget Act of 2018 required that the model be revised to include all 50 states and territories by 2020.  Consistent with these requirements, eligible Medicare Advantage health plans in all 50 states and territories may apply for the health plan innovations being tested under the VBID model for CY 2020.

CY 2017 VBID Evaluation Report

The first year VBID model evaluation report provides a description of the VBID model benefit designs and selected conditions as well as early implementation experiences.

In the first model year (2017), 9 out of 23 eligible Parent Organizations (POs) within 3 of 7 eligible states chose to participate in the model, targeting COPD, CHF, diabetes, and hypertension. Over 96,000 beneficiaries with specified target conditions were eligible for the VBID model; across all participating POs, 61 percent of eligible beneficiaries actually received VBID benefits.  While most 2017 MA plan data were not complete in time for a full impact analysis for this first report, they will be included in future reports. 

Please visit the VBID model website at for the CY 2017 VBID Evaluation Report. 

VBID Model for CY 2020 and Subsequent Years

For CY 2020 and subsequent years, CMS is testing the following health plan innovations in Medicare Advantage through the VBID model. The new interventions described below represent a broad array of value-based approaches to service delivery in MA. 

Value-Based Insurance Design by Condition and/or Socioeconomic Status

Beginning in CY 2020, participating MA plans may propose offering reduced cost-sharing or additional supplemental benefits, including for “non-primarily health related” items or services, for enrollees based on chronic condition, socioeconomic status determined by qualifying for the low-income subsidy and/or having dual-eligible status, or both. Plans may also propose allowing additional “non-primarily health related” supplemental benefits for all enrollees by disease state, regardless of socioeconomic status.

Rewards and Incentives

In order to enable more meaningful rewards and incentives that effectively influence healthy behaviors, CMS is testing the impact of permitting broadened Medicare Advantage and Part D Rewards and Incentives (RI) programs. Specifically, plans may propose RI programs with allowed values that more closely reflect the expected benefit of the health related service or activity, up to an annual limit, to better promote improved health, prevent injuries and illness, and promote the efficient use of health care resources.

Participating MA plans that offer a Prescription Drug Plan (MA-PDs) may also offer RI programs for enrollees who take covered Part D prescription drugs and who participate in disease state management programs, engage in medication therapy management with pharmacists or providers, receive preventive health services, and actively engage in understanding their medications, including clinically-equivalent alternatives that may be more cost-accessible.

Telehealth Networks

Through this intervention, CMS is testing how different service delivery innovations in telehealth can be used to both augment and complement an MA plan’s current network of providers, as well as how access to telehealth services may appropriately allow MA plans to expand their service area to currently underserved counties where current MA network adequacy requirements could not be met without the use of telehealth.

Where deemed appropriate by CMS, MA plans may propose using telehealth services in lieu of in-person visits to meet network adequacy requirements. Organizations must ensure that enrollee choice is preserved and that enrollee access to an in-person visit, if that is the enrollee’s preference and choice, is maintained. CMS expects that this will provide MA plans with an opportunity to enter into underserved markets, including rural areas where there may be few to no MA plan choices. 

The two different approaches CMS is testing are: 1. how plans can use telehealth services to complement and augment their current network of providers, including proposals where telehealth networks may comprise up to one-third of the required in-network providers for a specialty or specialties; and 2. how the use of telehealth services allows MAOs to offer a broadened service area, including counties where the choice of an MA plan may not have previously been able to be offered.

Wellness and Health Care Planning

Organizations participating in VBID, working with their network of providers, will be required to offer enrollees improved, timely access to Wellness and Health Care Planning (WHP), including advance care planning. Each MA organization applying for the VBID model must submit its proposed approach to WHP for their enrollees as part of the application.

Through the VBID model, CMS will evaluate the impact on quality and cost of best practices for performing WHP in the Medicare Advantage population.