The federal government is expanding a program that allows Medicare Advantage insurers to encourage chronically ill seniors to use high-value services by lowering out-of-pocket costs.
Insurers in 25 states will be able to apply for the Medicare Advantage Value-Based Insurance Design Model in 2019, the CMS announced Wednesday. The program is available to insurers in 10 states in 2018.
Additionally, the federal government is tweaking the model to allow Chronic Conditions Special Needs Plans to participate, and allow participants to propose methods for identifying enrollees with different chronic conditions than those previously allowed by the CMS, such as lower back pain, chronic kidney disease, obesity, asthma or tobacco use.
The Center for Medical and Medicaid Innovation unveiled the five-year experiment in value-based insurance design in Medicare Advantage plans in 2015. It started with seven states in January 2017. Efforts to reduce healthcare costs and improve quality has been one of the few bipartisan issues in Congress.
"This administration is committed to making sure that our seniors have more choices and lower premiums in their Medicare Advantage plans," CMS Administrator Seema Verma said in a statement. "CMS expects that this demonstration will provide insights into future innovations for the Medicare Advantage program."
The point of value-based insurance design is to get rid of the financial barriers, such as high co-payments, that sick patients often face when they are trying to get certain exams, prescription drugs and procedures.
Proponents of VBID explain that if patients with chronic conditions are able to obtain high-quality care that is recommended by doctors for free or at a reduced cost, then they are more likely to get that care and avoid potentially more expensive medical services down the road. On the flipside, cost-sharing would increase for services that offer little to no value for patients.
Private insurers and self-insured employers are already implementing VBID programs, and evidence has shown that such programs have led to improved medication adherence and reduced costs for chronically ill patients.
President Barack Obama in December 2016 also authorized Tricare, which provides healthcare coverage to 9.4 million people in the armed services, retirees and their families, to pilot VBID in its plans starting in 2018.
About a third of Medicare beneficiaries, or 19 million people, are enrolled in a private Medicare Advantage plan. Enrollment continues to grow as baby boomers age into the program at a rapid clip.
