Medicare Advantage Value-Based Insurance Design Model

The Medicare Advantage (MA) Value-Based Insurance Design (VBID) Model will be extended for calendar years (CY) 2025 through 2030 and will introduce changes intended to more fully address the health-related social needs of patients, advance health equity, and improve care coordination for patients with serious illness. For more information about the model extension, please see our fact sheet. This blog post shares more information about how CMS continues to shape the VBID Model.

Important VBID Model Resources:

VBID: Innovating to Meet Person-Centered Needs

Through the Medicare Advantage (MA) Value-Based Insurance Design (VBID) Model, CMS is testing a broad array of complementary MA health plan innovations designed to reduce Medicare program expenditures, enhance the quality of care for Medicare beneficiaries, including those with low incomes such as dual-eligibles, and improve the coordination and efficiency of health care service delivery. Overall, the VBID Model contributes to the modernization of MA and tests whether these model components improve health outcomes and lower costs for MA enrollees.

For plan year 2024, the VBID Model has 69 participating Medicare Advantage Organizations (MAOs) with a total of 12.4 million enrollees projected to be enrolled in participating plan benefit packages (PBPs). Over 8.7 million of these enrollees are projected to be offered additional Model benefits and/or rewards and incentives as part of the Model test in 2024.

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  • Alignment Healthcare USA, LLC
  • AllCare Health, Inc.
  • AlohaCare
  • Athena Healthcare Holdings, LLC
  • Banner Health
  • Baylor Scott & White Holdings
  • Blue Cross & Blue Shield of Rhode Island
  • Blue Cross and Blue Shield of Kansas City
  • Blue Cross and Blue Shield of North Carolina
  • Blue Cross Blue Shield of Arizona
  • BlueCross BlueShield of Tennessee
  • Bright Health Group, Inc.
  • Cambia Health Solutions, Inc.*
  • CareOregon, Inc.
  • CareSource
  • Centene Corporation
  • Chinese Hospital Association
  • Clever Care Health Plan, Inc.
  • Commonwealth Care Alliance, Inc.
  • Community Health Group
  • Community Health Plan of Washington
  • Corewell Health
  • CVS Health Corporation*
  • Denver Health and Hospital Authority
  • Devoted Health, Inc.
  • DOCTORS HEALTHCARE PLANS, INC.
  • El Paso County Hospital District
  • Elevance Health, Inc.
  • EmblemHealth, Inc.
  • First Sacramento Capital Funding LLC*
  • Geisinger Health
  • Guidewell Mutual Holding Corporation*
  • Hawaii Medical Service Association*
  • Healthfirst, Inc.
  • HealthPartners, Inc.
  • Henry Ford Health System
  • Highmark Health*
  • Humana Inc.*
  • Independence Health Group, Inc.
  • INLAND EMPIRE HEALTH PLAN
  • Kaiser Foundation Health Plan, Inc.*
  • Leon Health Holdings, LLC
  • Local Initiative Health Authority for LA County
  • Louisiana Health Service & Indemnity Company*
  • Marquis Companies I, Inc.*
  • McLaren Health Care Corporation
  • Medica Holding Company
  • MHH Healthcare, L.P.
  • Molina Healthcare, Inc.,
  • MVP Health Care, Inc.
  • New York City Health and Hospitals Corporation
  • Orange County Health Authority
  • Point32Health, Inc.
  • Providence St Joseph Health
  • SANTA CLARA COUNTY HEALTH AUTHORITY
  • SCAN Group*
  • Sentara Health Care (SHC)*
  • The Cigna Group
  • The Health Plan of West Virginia, Inc.
  • Thomas Jefferson University
  • Triton Health Systems, L.L.C.
  • Troy Holdings, Inc.
  • Ultimate Healthcare Holdings, LLC
  • UnitedHealth Group, Inc.
  • Universal Health Services, Inc.
  • UPMC Health System
  • Visiting Nurse Service of New York*
  • Zing Health Consolidator, Inc

*Indicates participation in the Hospice Benefit Component of the VBID Model for Calendar Year 2024

 

Highlights

  • A variety of factors, including financial strain, limited access to healthy foods and transportation and/or unmanaged chronic health conditions, can prevent patients from seeking health care. Medicare Advantage (MA) plans aim to address these challenges, but current rules make it hard to reach certain patients.
  • The MA Value-Based Insurance Design (VBID) Model helps to remove obstacles to health and health care. For instance, under this Model, participating MA plans may provide patients with tailored supplemental benefits like lower costs for prescription drugs; grocery assistance to help ensure their unmet medical needs and nutrition needs are met; transportation services to make sure they can attend medical appointments; and support managing chronic health conditions.
  • The Hospice Benefit Component of VBID helps patients needing end-of-life care experience a seamless transition to hospice care, if consistent with their and their caregivers’ wishes, by enabling MA plans to be financially responsible for all services, including hospice.
  • MA plans in VBID are innovating to meet person-centered needs: When social and other factors are addressed as part of a person-centered approach to care, patients may more easily access the care they need — when they need it — to manage their health.

Background

MA plans offer Medicare beneficiaries an alternative to Original Medicare, also referred to as “Fee-for-Service.” In addition to covering all Medicare services, some MA plans also offer Medicare beneficiaries extra coverage through supplemental benefits, such as vision, hearing, and dental services. Additionally, some MA Plans also 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. 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.

Additionally, currently, Medicare Beneficiaries may enroll into MA and have access to all original Medicare benefits plus additional supplemental benefits beyond what original Medicare covers. Historically, when an MA enrollee elects hospice, Fee-For-Service (FFS) 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.

Initiative 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 beneficiaries.

The VBID Model allows MAOs to further target benefit design to enrollees based on chronic condition, socioeconomic characteristics (as defined as being eligible for the Low Income Subsidy (LIS) or, in US territories, being dually eligible), and/or place of residence in the most underserved area derivation index (ADI) areas and/or incentivize the use of Part D prescription drug benefits through rewards and incentives. MAOs may also offer the Medicare hospice benefit to its enrollees (as described below) as part of the VBID Model. 

In Calendar Year (CY) 2025, the VBID Model will test the following Model Components:

  1. VBID Flexibilities, for Model PBPs’ select enrollees targeted by chronic health condition, socioeconomic status, and/or place of residence in the most underserved ADI areas, for offering:
    1. Primarily and non-primarily health related supplemental benefits
    2. Use of high-value providers and/or participation in care management program(s)/ disease state management program(s)
    3. Reductions in cost-sharing for Part C items and services and covered Part D drugs
  2. Part D Rewards and Incentives (RI) Programs
  3. Hospice Benefit Component

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

Hospice Benefit Component

The Centers for Medicare & Medicaid Services announced in January 2019 that beginning in CY 2021, through the VBID Model, participating MAOs could include the Medicare hospice benefit in their Part A benefits package.

Under the Model in CY 2024, thirteen MAOs, through 78 PBPs, will participate in the Hospice Benefit Component of the VBID Model. These PBPs will test the Hospice Benefit Component in service areas that cover 690 counties.

A downloadable list of PBPs with service area and contact information can be found here: VBID CY2024 Hospice Benefit Contact Information (XLSX)

By including the Medicare hospice benefit in the MA benefits package, CMS will test 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 is testing how the hospice benefit component can 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 will require that MAOs provide beneficiaries with broad access to the complete original Medicare hospice benefit. MAOs participating in the hospice benefit component will be required to outline how they will provide palliative care to eligible enrollees, irrespective of the election of hospice, and may make transitional, concurrent care services as well as hospice-specific supplemental benefits available to enrollees who elect hospice through 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). 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 2024 Materials

CY 2023 Materials

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.

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CY 2023 Webinars & Recordings

 

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