New Medicare Advantage Pilot To Test Value-Based Insurance Design

On Tuesday, the Center for Medicare and Medicaid Innovation at CMS announced a new pilot program that will allow Medicare Advantage insurers to lower beneficiaries’ out-of-pocket costs as a way to encourage them to use high-quality services and potentially reduce overall costs in the long term, Modern Healthcare reports.

The five-year program begins Jan. 1, 2017. CMS will explain the model in more detail in a webinar on Sept. 24 (Herman, Modern Healthcare, 9/1).

Program Details

The Medicare Advantage Value-Based Insurance Design Model will allow an insurer to take one of four approaches when designing a plan:

  • Eliminate or lower cost-sharing for high-value services and items, including some Medicare Part D drugs;
  • Eliminate or lower cost-sharing for high-value health care providers;
  • Provide full coverage for “supplemental benefits” — including telemedicine for diabetes management and tobacco cessation — for some populations; or
  • Lower cost-sharing for members who participate in disease-management programs (CMS fact sheet, 9/1).

CMS Deputy Administrator Patrick Conway said the pilot “fills an immediate need for testing ways to improve care and reduce cost in Medicare Advantage plans and offers the prospect of lower out-of-pocket costs and premiums along with better benefits for enrollees in Medicare Advantage.”

The pilot program will focus on beneficiaries with:

  • Diabetes;
  • Chronic obstructive pulmonary disease;
  • Congestive heart failure;
  • Coronary artery disease;
  • A history of stroke;
  • Hypertension; or
  • Mood disorders.

For the program, CMS chose states that were “generally representative of the national Medicare Advantage market,” including:

  • Arizona;
  • Indiana;
  • Iowa;
  • Massachusetts;
  • Oregon;
  • Pennsylvania; and
  • Tennessee (Modern Healthcare, 9/1).

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