CMS started its VBID (value-based insurance design) innovation model for Medicare Advantage on January 1, 2017 to run for five years.

Eligible Medicare Advantage plans can offer “varied plan benefit design” for enrollees based on specified clinical categories identified and defined by CMS. In 2017, diabetes, congestive heart failure, chronic obstructive pulmonary disease (COPD), past stroke, hypertension, coronary artery disease, mood disorders, and combinations of thereof were the defined categories.

As reported in Healthcare Finance, CMS chose nine Medicare Advantage organizations to participate in the 2017 value-based insurance design model: Blue Cross Blue Shield of Massachusetts, Fallon Community Health Plan of Massachusetts, Tufts Associated Health Plan of Massachusetts; Geisinger Health Plan, Aetna, Independence Blue Cross, Highmark of Pennsylvania, UPMC Health Plan of Pennsylvania; and Indiana University Health Plan. (Blue Cross Blue Shield of Michigan was added in 2018.)

With that, according to an analysis by Manatt Phelps & Phillips LLP, there were 45 value-based approaches (aka plan benefit packages, or PBP) being used by the nine Medicare Advantage Organizations (MAO) individual plans.  With 45 PBPs implemented by 9 plans, that suggests that administration could be a challenge for each MAO.

Meticulous attention to detail is the first step for these Medicare Advantage plans as they seek to meet three scenarios for success as deemed by CMS:

  1. Quality improves; cost neutral
  2. Quality neutral; cost reduced
  3. Quality improves; cost reduced (best case)

As MAOs continue to develop PBPs as part of VBID plans, below is a checklist to help assure administrative excellence:

  1. Determining eligibility for each PBP based upon health status qualifications
    a. Aggregating multiple data sources
    b. Complex clinical rules
    c. Manual vs. automated execution
    d. Numerous exceptions to handle
  2. Considerations for the benefit/incentive strategy
    a. Reduced copays/coinsurance
    b. Gift cards
    c. Free or discounted goods and services
    d. Condition-specific procedures
    e. Limited network vs all providers
  3. Member engagement and outreach considerations to take advantage of the benefits
    a. Program education
    b. Clear/concise communication and explanations
    c. Assurance that communication is personalized
    d. Omnichannel distribution
  4. Member benefit/incentive delivery
    a. Automated incentive fulfillment
    b. Building the PBP into eligibility and claims processing systems
    c. Administering cost-sharing reductions at point of care
    d. Coordinating supplemental benefits providers
    e. Coordinating care of eligible members to specified providers for specified procedures
  5. Member support
    a. Tracking member compliance in real time
    b. Tracking incentive fulfillment and benefit usage in real time
    c. Answering questions about how the program
    d. Fielding calls from members
    e. Assurance there is self-serve personalized benefit information
    f.  24/7 Support tools and assistance

While we are early in the second year of a five-year VBID program for Medicare Advantage, comprehensive administration is crucial for success of these programs.  However, VBID plan administration is a complex and arduous task.

Read our insights on Medicare Advantage member preferences in our Medicare report.