In keeping with the new administration’s theme of providing Medicare Advantage organizations more flexibility, CMS on Nov. 22 unveiled a set of revisions to the MA Value-Based Insurance Design (VBID) model that grants MA organizations in certain states a limited waiver to federal uniformity requirements. Industry experts agree that the modifications, which include opening the model to 15 new states and possibly more targeted conditions, represent a significant expansion. But some suggest to AIS Health that more change is needed to fully test the benefits of offering tailored benefit designs that address the health needs of certain beneficiaries.

Now in its third application cycle, the five-year VBID test affords plans the flexibility to offer targeted extra benefits or reduced cost-sharing to enrollees with certain conditions (MAN 9/3/15, p. 8). For the first benefit year, which began on Jan. 1, 2017, the model was open to applicants in seven states that wanted to test VBID programs for beneficiaries with one of seven specified chronic conditions. For 2018, CMS made modest alterations to the program by inviting participants in three additional states and allowing MAOs to target two more chronic conditions (MAN 8/18/16, p. 4).

According to the request for applications (RFA) for calendar year 2019 from the CMS Center for Medicare and Medicaid Innovation (CMMI), the agency is making the following changes to the model:

Adding 15 states where MAOs can apply, bringing the total test area to 25 states. The new states are: California, Colorado, Florida, Georgia, Hawaii, Maine, Minnesota, Montana, New Jersey, New Mexico, North Carolina, North Dakota, South Dakota, Virginia and West Virginia.

Adding Chronic Condition Special Needs Plans (C-SNPs) to the types of Plan Benefit Packages that may apply.

Allowing participants to propose their own methods for identifying eligible enrollees using CMS data sources (e.g. ICD-10, encounter data, claims data or other data sources CMS has access to). This would enable organizations to submit a methodology that either identifies enrollees with different chronic conditions than those previously designated by the agency or updates the existing approved chronic condition category to target a broader or smaller subset of the existing condition, explained CMS. MAOs could, for example, use VBID to address chronic back pain, chronic kidney disease, obesity/pre-diabetes, asthma or tobacco use, suggested the RFA.

Plans may continue to design their own interventions for each targeted population, so long as they fit into four intervention categories: (1) reduced cost sharing for high-value services, including covered Part D drugs; (2) reduced cost sharing for high-value providers; (3) reduced cost sharing for disease management or related programs; and (4) clinically targeted additional supplemental benefits. Model design changes may only reduce cost sharing and/or offer additional services; targeted enrollees can never have access to fewer benefits or be required to pay higher cost sharing than other enrollees because of the model, CMS reminded applicants.

John Gorman, founder and executive chairman of Gorman Health Group, predicts that this “massive expansion” of the model should lead to more players, especially “really mature, innovative plans,” getting on board. “I think CMS got a pretty tepid response in the first rounds because they weren’t going to states where there was critical mass. But now that they’re bringing in California, Florida and Texas, it’s go time,” he tells AIS Health. For 2017 and 2018, nine MAOs operating 11 plans are testing the model in three states.

One of the model participants, UPMC Health Plans, Inc., has designed its “Spark Your Health” initiative in Western Pennsylvania around congestive heart failure, diabetes and chronic obstructive pulmonary disease. John Lovelace, president of government programs at UPMC, suggests that enabling plans to propose their own methodology of identifying eligible enrollees would be helpful.

“The buckets that we are required to use now are pretty broad, and the way in which we have to identify people creates lots of false positives,” he tells AIS Health. For example, an inaccurate glucose tolerance reading in a patient’s claims history could inappropriately flag that patient for the diabetes intervention.

Service Area Requirements Remain

But Michael Adelberg, principal with FaegreBD Consulting and a former top CMS MA official, suggests that a few more tweaks may be needed to make the model more attractive to participants. “Between the CMMI announcement and the draft reg, we know that CMS is focused on promoting VBID and has taken a number of helpful steps toward that end,” he says, referring to language in a proposed MA and Part D rule that explores flexibility in the MA uniformity requirements.

While CMS in that rule did not reference the VBID model, it explicitly stated that it considers access to services or specific cost sharing for services/items that is tied to a person’s disease state, when offered to “similarly situated” individuals, as not straying from the uniformity requirement.

One helpful step to enhancing the model, Adelberg suggests, would be “permitting MA plans with large service areas to offer a VBID as a geographic subset of that service on a transitional basis, to permit the MA plan to work with select providers and limit the losses if things don’t work out.” Under the current design, all approved counties and segments of a model participant’s service area in a test state must offer the VBID intervention.

More SNP Types Want Inclusion

The SNP Alliance, an initiative of the National Health Policy Group, views the expansion as a step in the right direction. “We’re delighted that CMS has even opened the window for VBID inclusion of the SNPs, recognizing the participation of C-SNPs starting in 2019, granted only in those states where participation is allowed,” remarks Cheryl Phillips, M.D., president and CEO of the SNP Alliance.

“We’ve been urging CMS to include SNPs in VBID modeling for quite a while, so while it’s not everything we wanted it’s certainly a start,” she tells AIS Health. “We also think there should be similar flexibility for D-SNPs [dual eligible SNPs]…to participate in the demo. And the idea of having flexibility and tailoring benefits both in and outside of demo authority is really critical for beneficiaries, so we would like to see CMS look to [provide] greater flexibility to tailor benefits both inside and outside the demo.”

Applications are due on Jan. 26, 2018. To view the RFA, visit