SS&C Blog

Medicare Advantage value-based insurance design model

Wednesday, January 10, 2018 | By Judith Nelson

Medicare Advantage value-based insurance design model

On December 13, 2017, the Centers for Medicare and Medicaid Services (CMS) held an Open Door Forum to discuss the recently announced opportunity to apply for the calendar year (CY) 2019 Medicare Advantage (MA) Value-Based Insurance Design (VBID) Model. This program first began on January 1, 2017, and the term "value-based insurance" design generally refers to an approach to 1) structure the amount of a member's cost sharing, or 2) provide supplemental benefits to encourage the consumption of "high-value" clinical services that positively impact the member's health and reduce the overall cost of care. The ultimate objective of the VBID model is to improve the quality of care provided to enrollees as well as reduce the cost to the MA program.

Before the introduction of this pilot program, MA plans were not able to implement value-based designs due to the CMS regulatory requirements for uniform benefit designs. Unless they participated in this program, plans were not allowed to vary the benefits based on the health status or other characteristics of the enrollee. The new pilot program was designed to provide plans the flexibility to modify benefit designs to encourage members to seek high-value clinical services. In 2019, the third year of the model program, participation in the VBID program will expand to 25 states: Alabama, Arizona, California, Colorado, Florida, Georgia, Hawaii, Indiana, Iowa, Maine, Massachusetts, Michigan, Minnesota, Montana, New Jersey, New Mexico, North Carolina, North Dakota, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Virginia, and West Virginia.

For 2018, the VBID programs target members with the following clinical conditions (or a combination of these conditions):

  • Diabetes
  • Congestive heart failure
  • Chronic obstructive pulmonary disease (COPD)
  • Past stroke
  • Hypertension
  • Coronary artery disease
  • Mood disorders
  • Dementia
  • Rheumatoid arthritis

For CY 2019, CMS is providing plans with significant flexibility in targeting potential enrollees in clinical categories using their own methodology. In the first two years of the VBID model, CMS identified the chronic conditions from which plans chose to target interventions. After CMS approval, plans may offer varied plan benefit designs for enrollees who fall into self-defined clinical categories or into the clinical categories identified and defined by CMS as outlined above. Similar flexibility related to the uniform benefit requirements was outlined in the proposed rule published on November 16, 2017.

During the Open Door Forum, CMS clarified that if plans apply for VBID, they are not required to participate. Additional information regarding the program is available at:

Even though there are a limited number of plans participating in the VBID model, this is an opportunity to engage members more actively in their health care decisions and to drive toward lower costs of care and improved outcomes.

For more information on how DST can be a resource for your health plan, contact us at 877.272.4799 or