Value Based Insurance Design New Clinical Categories for MA Plans

The Centers for Medicare & Medicaid Services (CMS) is announcing refinements to the Medicare Advantage Value-Based Insurance Design (MA-VBID) model. Beginning January 1,

Value Based Model for Medicare Part C
Value Based Insurance Design Model for Medicare Part C018, CMS will add and to the clinical categories for which participants may offer benefits. CMS will also make adjustments to existing clinical categories and change the minimum enrollment size for some MA and MA-Part D plan participants.

2018, CMS will add rheumatoid arthritis and dementia to the clinical categories for which participants may offer benefits. CMS will also make adjustments to existing clinical categories and change the minimum enrollment size for some MA and MA-Part D plan participants.

Value-Based Insurance Design (VBID) refers to  use of services that have the best outcomes. VBID approaches are increasingly used in the commercial market, and according to CMS, evidence suggests that the inclusion VBID in benefit design may be effective to improve outcomes while reducing cost. CMS will test VBID in Medicare Advantage and measure whether it achieves this goal. MA-VBID model will begin January 1, 2017 and run for five years. CMS expects to release a Request for Applications for the second year in fall of 2016.

In its first year, CMS will test Value-Based Insurance Design in Arizona, Indiana, Iowa, Massachusetts, Oregon, Pennsylvania, and Tennessee. Beginning January 1, 2018, CMS will also test VBID in Alabama, Michigan, and Texas. These states are selected based on diversity within the national Medicare Advantage market. Selection factors include urban and rural, high and low Medicare expenditures, high and low prevalence of Low-Income Subsidies, and varying levels of penetration  and competition within Medicare Advantage.

Background

The existing Medicare Advantage “uniformity” requirement generally require that an MA plan benefits and cost sharing be the same for all plan enrollees. Because of this, clinically-nuanced Value-Based Insurance Design approaches have generally not been incorporated into MA or MA-PD plans. VBID will test giving MA plans flexibility to offer supplemental benefits or reduced cost sharing to targeted groups of enrollees.

Authority

The Value-Based Insurance Design model is authorized under Section 1115A of the Social Security Act (added by section 3021 of the Affordable Care Act) (42 U.S.C. § 1315a), which authorizes the Center for Medicare and Medicaid Innovation to test innovative health care payment and service delivery models that have the potential to reduce Medicare, Medicaid, and Children’s Health Insurance Program expenditures while preserving or enhancing the quality of beneficiaries’ care. CMS will test this model in the Medicare program through a limited waiver of the Medicare Advantage and Part D uniformity requirements.

Clinical Categories for Populations

The MA-VBID model supports improved health outcomes for enrollee populations that fall within certain clinical categories:

Diabetes
Chronic Obstructive Pulmonary Disease (COPD)
Congestive Heart Failure (CHF)
Patient with Past Stroke
Hypertension
Coronary Artery Disease
Mood disorders
Rheumatoid Arthritis (starting in 2018)
Dementia (starting in 2018)

Four Plan Designs for Value-Based Insurance Design

For each of the selected enrollee groups, participating MA plans may select one or more plan design modifications. The four approaches are:

1.Reduced Cost Sharing for High-Value Services
Plans can choose to reduce or eliminate cost sharing for items or services, including covered Part D drugs, that they have identified as high-value for a given target population. Participating plans have flexibility to choose which items or services are eligible for cost-sharing reductions; however, these services must be clearly identified and defined in advance, and cost-sharing reductions must be available to all enrollees within the target population.

Examples of interventions within this category include eliminating co-pays for eye exams for diabetics and eliminating co-pays for angiotensin converting enzyme inhibitors for enrollees who have previously experienced an acute myocardial infarction.

2. Reduced Cost Sharing for High-Value Providers
Plans can choose to reduce or eliminate cost sharing when providers that the plan has identified as high-value treat targeted enrollees. Plans may identify high-value providers based on their quality and not solely based on cost, across all Medicare provider types, including physicians/practices, hospitals, skilled-nursing facilities, home health agencies, ambulatory surgical centers, etc.

Examples of interventions within this category include reducing cost sharing for diabetics who see a physician who has historically achieved strong results in controlling patients’ HbA1c levels and eliminating cost sharing for heart disease patients who elect to receive non-emergency surgeries at high-performing cardiac centers.

3. Reduced Cost Sharing for Enrollees Participating in Disease Management or Related Programs

Participating plans can reduce cost sharing for an item or service, including covered Part D drugs, for enrollees who choose to participate in a plan-sponsored disease management or similar program. This could include an enhanced disease management program, offered by the plan as a supplemental benefit, or it could refer to specific activities that are offered or recommended as part of a plan’s basic care coordination activities. Plans using this approach can condition enrollee eligibility for cost-sharing reductions on meeting certain participation milestones. For instance, a plan may require that enrollees meet with a case manager at regular intervals in order to qualify. However, plans cannot make cost-sharing reductions conditional on achieving any specific clinical goals (e.g., a plan cannot condition cost-sharing reductions on enrollees achieving certain thresholds in HbA1c levels or body-mass index).

Examples of interventions within this category include elimination of primary care co-pays for diabetes patients who meet regularly with a case manager and reduction of drug co-pays for patients with heart disease who regularly monitor and report their blood pressure.

4. Coverage of Additional Supplemental Benefits

Under this approach, participating plans can make coverage for specific supplemental benefits available only to targeted populations. Such benefits may include any service currently permitted under existing Medicare Advantage rules for supplemental benefits. Examples of interventions within this category include physician consultations via real-time interactive audio and video technologies for diabetics, or supplemental tobacco cessation assistance for enrollees with COPD.

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Michael F. Arrigo

Michael Arrigo brings four decades of experience in the software, financial services, and healthcare industries. In 2000, Mr. Arrigo founded No World Borders, a healthcare data, regulations, and economics firm with clients in the pharmaceutical, medical device, hospital, surgical center, physician group, diagnostic imaging, genetic testing, health IT, and health insurance markets. His expertise spans the federal health programs Medicare and Medicaid and private insurance. He advises Medicare Advantage Organizations who provide health insurance under Part C of the Medicare Act. Mr. Arrigo serves as an expert witness regarding medical coding and medical billing, fraud damages, as well as electronic health record software for the U.S. Department of Justice. He has valued well over $1 billion in medical billings in personal injury liens, medical malpractice, insurance fraud cases. The U.S. Court of Appeals considered Mr. Arrigo's opinion regarding loss amounts, vacating, and remanding sentencing in a fraud case. Mr. Arrigo provides expertise in the Medicare Secondary Payer Act, Medicare LCDs, anti-trust litigation, medical intellectual property and trade secrets, HIPAA privacy, health care electronic claim data Standards, physician compensation, Anti-Kickback Statute, Stark law, the Affordable Care Act, False Claims Act, and the ARRA HITECH Act. Arrigo advises investors on merger and acquisition (M&A) diligence in the healthcare industry on transactions cumulatively valued at over $1 billion. Mr. Arrigo spent over ten years in Silicon Valley software firms in roles from Product Manager to CEO. He was product manager for a leading-edge database technology joint venture that became commercialized as Microsoft SQL Server, Vice President of Marketing for a software company when it grew from under $2 million in revenue to a $50 million acquisition by a company now merged into Cincom Systems, hired by private equity investors to serve as Vice President of Marketing for a secure email software company until its acquisition and multi $million investor exit by a company now merged into Axway Software SA (Euronext: AXW.PA), and CEO of one of the first cloud-based billing software companies, licensing its technology to Citrix Systems (NASDAQ: CTXS). Later, before entering the healthcare industry, he joined Fortune 500 company Fidelity National Financial (NYSE: FNF) as a Vice President, overseeing eCommerce solutions for the mortgage banking industry. While serving as a Vice President at Fortune 500 company First American Financial (NYSE: FAF), he oversaw eCommerce and regulatory compliance technology initiatives for top ten mortgage banks and led the Sarbanes Oxley Act Section 302 internal controls IT audit for the company, supporting Section 404 of the Sarbanes Oxley Act. Mr. Arrigo earned his Bachelor of Science in Business Administration from the University of Southern California. Before that, he studied computer science, statistics, and economics at the University of California, Irvine. His post-graduate studies include biomedical ethics at Harvard Medical School, biomedical informatics at Stanford Medical School, blockchain and crypto economics at the Massachusetts Institute of Technology, and training as a Certified Professional Medical Auditor (CPMA). Mr. Arrigo is qualified to serve as a director due to his experience in healthcare data, regulations, and economics, his leadership roles in software and financial services public companies, and his healthcare M&A diligence and public company regulatory experience. Mr. Arrigo is quoted in The Wall Street Journal, Fortune Magazine, Kaiser Health News, Consumer Affairs, National Public Radio (NPR), NBC News Houston, USA Today / Milwaukee Journal Sentinel, Medical Economics, Capitol ForumThe Daily Beast, the Lund Report, Inside Higher Ed, New England Psychologist, and other press and media outlets. He authored a peer-reviewed article regarding clinical documentation quality to support accurate medical coding, billing, and good patient care, published by Healthcare Financial Management Association (HFMA) and is published in Healthcare IT News.

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