Medicare Advantage Value-Based Insurance Design Model

Background on Medicare Advantage (MA)

MA plans offer Medicare beneficiaries an alternative to Traditional Medicare. In addition to covering all Medicare services, some MA plans also offer enrollees extra coverage through supplemental benefits such as vision, hearing, and dental services. Some MA plans may offer prescription drug coverage (Part D) as part of their plan.

MA plans can charge different out-of-pocket costs for certain services within guidelines defined by Medicare. Value-Based Insurance Design (VBID) generally refers to health insurers’ efforts to structure cost-sharing and other health plan design elements to encourage enrollees to use the services that can benefit them the most.

Currently, Medicare beneficiaries may enroll into MA and have access to all Traditional  Medicare benefits plus additional supplemental benefits beyond what original Medicare covers. Historically, when an MA enrollee elects hospice, Traditional Medicare becomes responsible for most services while the MA organization retains responsibility for certain services (e.g., supplemental benefits). This hospice “carve-out” from MA results in a convoluted set of coverage rules for MA enrollees who elect hospice and fragments accountability for care and financial responsibility across the care continuum that the Hospice Benefit Component of the VBID Model seeks to address.

VBID Model Details

The VBID Model tests a broad array of MA service delivery and/or payment approaches and contributes to the modernization of MA through increasing choice, lowering cost, and improving the quality of care for Medicare enrollees.

The VBID Model allows participating MAOs to further target benefit design to enrollees based on (i) one or more chronic health conditions, (ii) Low-Income Subsidy (LIS) eligibility (or, in the territories, dual eligibility for both Medicare and Medicaid), (iii) place of residence based on ADI data, or (iv) a combination of chronic health conditions, and/or ADI data. MA plans participating in the VBID Model may also use reward and incentive programs to encourage enrollees to participate in Part D health-related activities.

For more details on these Model Components please see the links to the Requests for Applications (RFA) below.

Hospice Benefit Component

The Centers for Medicare & Medicaid Services (CMS) announced in January 2019 that beginning in CY 2021, through the VBID Model Hospice Benefit Component, participating MAOs could include the Medicare hospice benefit in their Part A benefits package. After careful consideration, CMS terminated the Hospice Benefit Component as of 11:59 PM, December 31, 2024.

A list of VBID Model Hospice Benefit Component plans that participated in CY 2021 through CY 2024, as well as downloadable list of PBPs with service area and contact information which can be found here: VBID CY2024 Hospice Benefit Contact Information (XLSX)

By including the Medicare hospice benefit in the MA benefits package, CMS tested the impact on service delivery and quality of MA plans providing all original Parts A and B Medicare items and services required by statute. Additionally, CMS tested how the Hospice Benefit Component could improve beneficiary care through greater care coordination, reduced fragmentation, and transparency in line with recommendations by the Office of Inspector General (OIG), the Medicare Payment Advisory Commission (MedPAC), and others.

CMS required that MAOs provided beneficiaries with broad access to the complete Traditional Medicare hospice benefit. Participants were required to outline how they would provide palliative care to eligible enrollees, irrespective of hospice election , and make transitional concurrent care services as well as hospice-specific supplemental benefits available to enrollees who elected hospice through in-network hospice providers.

For technical and operational guidance, please reference the Hospice Benefit Component Technical and Operational Guidance (PDF) and the CY 2024 Technical and Operational Guidance Supplement (PDF). For more guidance on the conclusion of the Hospice Benefit Component, please see the Announcement on Terminating the Hospice Benefit Component and the CY 2024 Technical and Operational Guidance on the Conclusion of the Hospice Benefit Component (PDF).

Visit the Hospice Benefit Component overview page for further information.

Information for Interested Parties

If you are interested in receiving CMS Innovation Center updates, including about the VBID Model, subscribe to the CMS Innovation Center listserv.

For any questions, please email the VBID Model team at VBID@cms.hhs.gov.

CY 2025 Materials

• CY 2025 VBID Model Participant Announcement - September 2024
• CY 2025 VBID Model Communications and Marketing Guidelines (PDF)
• Announcement on Terminating the Hospice Benefit Component
• CY 2025 VBID Model Monitoring Guidelines (PDF)
  • Appendix 1: CY 2025 VBID Benefit Crosswalk (XLSX)
  • Appendix 2: CY 2025 VBID Beneficiary Level Flex Targeting and RI Targeting/Receipt File Layout (XLSX)
  • Appendix 3: CY 2025 VBID Beneficiary Level Focus Area Supplemental Benefit File Layout (XLSX)
  • Appendix 4: CY 2025 VBID Technical Specifications for Supplemental Benefit Data Reporting (PDF)
  • Appendix 5: CY 2025 VBID Flex Supplemental Benefits Summary Report (XLSX)
  • Appendix 6: CY 2025 VBID Beneficiary Level HRSN Assessment File Layout (XLSX)
  • Appendix 7: CY 2025 VBID HRSN Assessment Key (XLSX)

Additional Information

The separate, OIG-issued, fraud and abuse waivers applicable to Medicare Advantage Organizations in the VBID Model are available at https://www.cms.gov/medicare/physician-self-referral/fraud-and-abuse-waivers. 

CMMI has released a memorandum (PDF) providing guidance on Model treatment of reductions in Part D cost-sharing. CMMI released an additional memorandum (PDF) on December 1, 2022, providing further guidance and examples regarding the reporting of VBID Model benefits in the Prescription Drug Event (PDE) data. Please be aware that the CY 2024 PDE reporting guidance that CMS released as a result of the Inflation Reduction Act (IRA) should be referenced in conjunction with the prior VBID PDE reporting guidance. For example, Example 6 in the December 1, 2022, VBID PDE Reporting Guidance is no longer relevant for 2024 and beyond due to the removal of beneficiary cost-sharing in the catastrophic phase.

CMMI released a memorandum (PDF) on April 8, 2024 to provide guidance on the use of a VBID reporting adjustment in CY 2024. With this adjustment, participating MAOs should not have beneficiaries who remain in the Coverage Gap Phase indefinitely as a result of applying the VBID Model Benefit.

Effective January 1, 2025, VBID cost-sharing reductions will be TrOOP-eligible and must be reported in the Other TrOOP field. CMMI released a memorandum (PDF) on May 20, 2024 to provide guidance and examples of this change.

• Archived Materials

Evaluation Reports

Latest Evaluation Reports

• Two Pager: At-A-Glance Report   |  Hospice At-A-Glance Report
  • Medicare Advantage Value-Based Insurance Design Model: 2020 to 2023
  • Appendix
• Preview: Executive Summary (PDF)     |  Additional Analyses of Risk Score Growth (PDF)

Prior Evaluation Reports

• Two Pager: At-A-Glance Report (PDF)  |  Hospice At-A-Glance Report (PDF)
  • Medicare Advantage Value-Based Insurance Design Model Phase II: Second Annual Evaluation Report (PDF)
  • Appendices (PDF)
• Two Pager: At-A-Glance Report (PDF)  |  Hospice At-A-Glance Report (PDF)
  • Medicare Advantage Value-Based Insurance Design Model Phase II: First Annual Evaluation Report (PDF)
  • Appendices (PDF)
• Two Pager: At-A-Glance Report (PDF)
  • White Paper - Synthesis of Evaluation Results Across 21 Medicare Models (PDF)  |  Slides (PDF)  |  Recording (MP4)  |  Transcript (PDF)
• Two Pager: At-A-Glance Report (PDF)
  • Medicare Advantage Value-Based Insurance Design Model Phase I: First Three Years (2017-2019) Evaluation Report (PDF)
  • Perspective Report (PDF)
• Two Pager: At-A-Glance Report (PDF)
  • Medicare Advantage Value-Based Insurance Design Model Phase I: Year One Evaluation Report (PDF)