CMS Releases RFA for First Value-Based Payment Initiative for Managed Medicare

The Centers for Medicare and Medicaid Services' (CMS) payment testing and innovation arm, the Center for Medicare and Medicaid Innovation (CMMI), just  released its Request for Applications (RFA) for its payment demonstration model, the Value-Based Insurance Design (VBID) program. VBID is the first of more than 30 existing CMMI payment models to test value-based reimbursement concepts in managed Medicare Advantage Part C and Part D prescription drug plans (“MA Plans”).  Up until now, CMS has limited its value-based payment experiments to fee-for-service Medicare. As with many existing CMMI fee-for-service initiatives, the VBID model is targeted at improving clinical management and reducing the cost of care for MA Plan members with chronic conditions.

Realigning Incentives

The VBID model will allow participating MA Plans to custom design benefits aimed at improving the health of and reducing costs for targeted populations with chronic illnesses. Current MA rules prohibit variations in plan benefit design within the same MA Plan based on a member’s health status or other member factors.  CMS will use its waiver authority under Section 115A of the Affordable Care Act to waive this uniformity requirement, and implement the VBID program.

VBID applications will be due on January 8, 2016. CMS indicated that an online portal for electronic applications will become available in November. The program will begin with the January 2017 MA plan year and run for five years, although participating Plans are not required to stay in the program for all five years. CMS also indicated that it may open up the program to additional participants in subsequent years. 

Here is a detailed summary of key VBID program eligibility criteria, areas of permissible interventions and other important provisions.