Value-Based Insurance Design

Value-based insurance design (VBID) is a strategy that minimizes or eliminates out-of-pocket costs for high-value services in defined patient populations. The primary objective of VBID is to reduce and eventually eliminate financial barriers to high-value health care services. High value health care services are identified through evidence-based analysis. The more clinically beneficial and cost-effective the therapy is for a patient group, the lower the out-of-pocket costs. 

The AAFP supports flexibility in the design and implementation of value-based insurance design programs, consistent with the following principles:

1. Value reflects the clinical benefit gained relative to the money spent. VBID explicitly considers the clinical benefit of a given service or treatment when determining cost-sharing structures or other benefit design elements.

2. Practicing physicians must be actively involved in the development of VBID programs. VBID program design related to specific medical/surgical conditions must involve appropriate specialists.

3. High-quality, evidence-based data must be used to support the development of any targeted benefit design. Treatments or services for which there is insufficient or inconclusive evidence about their clinical value should not be included.

4. The methodology and criteria used to determine high- or low-value services or treatments must be transparent and easily accessible to physicians and patients.

5. Coverage and cost-sharing policies must be transparent and easily accessible to physicians and patients. Educational materials should be made available to help patients and physicians understand the incentives and disincentives built into the plan design.

6. VBID should not restrict access to patient care. Designs can use incentives and disincentives to target specific services or treatments, but should not otherwise limit patient care choices.

7. Physicians retain the ultimate responsibility for directing the care of their patients.Plan designs that include higher cost-sharing or other disincentives to obtaining services designated as low-value must include an appeals process to enable patients to secure care recommended by their physicians, without incurring cost-sharing penalties.

8. VBID should encourage innovations in Medicare Advantage and Medicaid managed care plans. Within both program, there exists an extremely vulnerable population to health care costs being shifted onto them. VBID should encourage beneficiaries, with chronic conditions, to seek out and receive the care they need before ending up in the emergency room or hospital.

9. Plan sponsors should ensure adequate resource capabilities to ensure effective implementation and ongoing evaluation of the plan designs they choose. Procedures must be in place to ensure VBID coverage rules are updated in accordance with evolving evidence. VBID should avoid rigid, uniform requirements for co-pays, co-insurance, and deductibles. Patient cost-sharing requirements should include clinical nuance to ensure high-value services are used over low-value services. VBID should explore expanding evidence-based, secondary prevention health care services for patients with chronic conditions and diseases. Secondary prevention health care services should align with various quality improvement programs and health plan accreditation.

10. VBID programs must be consistent with AAFP policies on “Value-Based Payment,” “Pay-for-Performance,” “Physician Profiling, Guiding Principles,” and “Tiered and Select Physician Networks.”

(2015 COD) (2016 COD)