CMS Aims to Reduce Costs in Medicare Advantage Plans

Applications for Value-based Insurance Design Model Available Soon

September 11, 2015 04:34 pm News Staff
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Family physicians who have patients participating in Medicare Advantage health plans in one of seven test states may find themselves involved in CMS' newly announced Medicare Advantage Value-based Insurance Design Model.

News of the model -- designed by CMS' Center for Medicare and Medicaid Innovation -- was announced in a Sept. 1 press release.( CMS plans to have the value-based model operational on Jan. 1, 2017, and will test the model for five years in Arizona, Indiana, Iowa, Massachusetts, Oregon, Pennsylvania and Tennessee.

Plan Design

The value-based model gives Medicare Advantage plans the flexibility to design their insurance packages with extra benefits and reduced cost sharing to patients who have specified chronic conditions. Specifically, those conditions are

Story Highlights
  • CMS will soon open the application process for a new value-based insurance design model that aims to reduce costs in Medicare Advantage health plans.
  • Health plans will have the flexibility to design insurance packages with extra benefits and reduced cost sharing to patients with certain chronic conditions.
  • Chronic diseases covered in the test model include diabetes, chronic obstructive pulmonary disease and congestive heart failure.
  • diabetes,
  • chronic obstructive pulmonary disease (COPD),
  • congestive heart failure,
  • hypertension,
  • coronary artery disease and
  • mood disorders.

Additionally, according to a CMS fact sheet,( patients with a history of stroke also will be included in the test model. Medicare Advantage plans will have the freedom to identify certain combinations of the conditions listed above to enable the establishment of "multiple co-morbidities" groups.

According to the press release, the model will "test the hypothesis" that if Medicare Advantage plans offer targeted extra supplemental benefits or reduced cost sharing to patients who have specified chronic conditions, the end result will be higher-quality, more cost-efficient care.

The best-case scenario is that, in the end, patients, health plans and the Medicare program will save money.

Four Approaches

For each of the selected enrollee groups, participating plans will have the option to choose plan design modifications from a list of four general approaches.

Three approaches will allow plans to reduce patient cost sharing when patients

  • use high-value services;
  • use high-value providers including physicians, practices and hospitals; and
  • participate in disease management or related programs.

Medicare Advantage plans that choose the fourth option would cover supplemental benefits beyond what the plan normally would cover. For instance, plans could include tobacco cessation assistance for patients with COPD, or include services such as video consultations for patients living with chronic diseases like diabetes or coronary artery disease.

Eligibility Requirements

This new design model will be available to all qualifying Medicare Advantage plans and Medicare Advantage plans offering Part D benefits in the test states that submit acceptable proposals to CMS.

Plans must have a minimum enrollment of 2,000 enrollees; other restrictions apply.

All applicants who meet the criteria and who submit proposals will be accepted into the model; there is no cap on the total number of participating plans.

CMS will offer a webinar( about the new design model on Sept. 24 from 2:30 to 4 p.m. CDT.