February 15, 2019

Medicare Advantage: Value-Based Insurance Design

By Steven Lavenda, Partner, Assurance Services

Medicare Advantage: Value-Based Insurance Design

The Centers for Medicare & Medicaid Services (CMS) recently announced extensive revisions to its Medicare Advantage policy and Value-Based Insurance Design (VBID) model which could lead to new opportunities for senior living care providers.

These changes, which are intended to modernize the Medicare program, will be tested as part of the VBID model for 2020. Eligible plans in all 50 states will be able to apply for the innovations, according to a CMS fact sheet. Starting in 2021, CMS will also begin testing the inclusion of the hospice benefits as part of Medicare Advantage. Additionally CMS said it’s planning to extend the performance period of the VBID model three years, to 2024, in order to sufficiently evaluate the impact of these changes.

VBID plans have been designed to maximize access to services for older adults – particularly those with certain chronic conditions, including dementia – to help them maintain their health and wellbeing. The idea is that this will not only, result in better health outcomes but also drive down the overall cost of care.

Per these changes announced on January 18, senior living providers that double as Medicare Advantage insurers have a new opportunity to participate in VBID. All special needs plans (SNPs) – including chronic condition SNPs (C-SNPs) and institutional SNPs (I-SNPs) – will be eligible to participate in VBID for 2020.

Already, VBID plans have leeway in how they structure enrollee cost-sharing and other elements of plan design. Beginning in 2020, they will have even greater flexibility, through innovations such as:

  • Reduced cost-sharing and new benefits offered in a more targeted fashion than in the past, with customization based on chronic condition or socioeconomic status – or both – and benefits that are not primarily healthcare related, such as transportation.
  • Increased access to telehealth services.
  • More “meaningful and focused” rewards and incentives programs for beneficiaries.

The CY 2020 VBID application period runs through March 1, 2019. Looking ahead to 2021, CMS intends to use the VBID model to test the inclusion of the hospice benefit in Medicare.

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Steven  Lavenda

Steven Lavenda


  • Advisory
  • Deerfield, IL