The Medicare Advantage Value-Based Insurance Design (MA-VBID) Model Test

The Centers for Medicare & Medicaid Services (CMS) announced on September 1 a proposed demonstration that will test varying benefit designs based on health status.   The overall goal is to improve clinical outcomes while reducing plan expenditures.

This demonstration is proposed for seven states: Arizona, Indiana, Iowa, Massachusetts, Oregon, Pennsylvania, and Tennessee.  According to the announcement, only current Medicare Advantage organizations in good standing in those states will be allowed to participate.  The demonstration is aimed at Health Maintenance Organizations (HMOs), Health Maintenance Organization Point of Service (HMO-POS) plans, and local Preferred Provider Organizations (PPOs)  in order to determine how it affects beneficiaries and costs in the most common plans.  Special Needs Plans (SNPs), Regional PPOs, Medicare-Medicaid Plans (MMPs), Private Fee-for-Service (PFFS) plans, Employer Group Waiver Plans (EGWPs), Health Savings Accounts, and cost plans are not eligible.

The demonstration will waive certain regulations so benefit plans can vary for enrolled members based on their diagnosis, condition, or need for a medical service.  Currently, health status distinctions in providing benefits to enrolled beneficiaries are prohibited by regulations.  Organizations can propose any myriad of combinations of benefits or services provided they are based on the proposed chronic conditions listed in the announcement.  Most importantly, CMS notes participating organizations can initiate the demonstration with a limited benefit and can expand their benefit plans during the five-year term of the demonstration.  While the benefits will be mandatory supplemental benefits, CMS proposes to prohibit marketing these benefits to non-member beneficiaries.

The CMS process begins with the submission of a Request for Application (RFA).   Organizations failing to submit an RFA cannot participate in 2017 but may be allowed at a later date during the five-year demonstration period.  Organizations must submit an RFA that has sufficient detail to allow CMS to determine if the benefit plan addresses targeted beneficiaries, will provide measureable results, and is appropriately structured for the demonstration.

RFAs are currently due by November 15.  CMS will bind the organization to the proposed benefits in the RFA to their bid proposal for 2017.  Consequently, conducting in-depth data analyses is necessary to propose a benefit plan in the RFA. This is the critical step that must begin in the very near future to meet the RFA submission date.

Is this the right opportunity for your organization? Attend our webinar to find out.

Join John Gorman, Founder and Executive Chairman at Gorman Health Group, on Tuesday, September 29 from 1-2 pm ET, as they outline the MA-VBID plan requirements, as well as what you should be doing now to prepare for January 2017.


Health plans in the applicable states need to place emphasis on data analysis and strategic planning as well as application support. We can help – Contact us today.

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