Going National a Possibility for Medicare Managed Care Value Program

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By Mindy Yochelson

The chances a 10-state Medicare managed care chronic illness program expands to all 50 states just went up with the confirmation of Tom Price as head of the HHS and with bipartisan backing of the program in Congress.

Price told the Senate Finance Committee prior to his confirmation that he wants Medicare Advantage plans to have more flexibility in how they may design their benefits.

The program, known as Medicare Advantage Value-Based Insurance Design Model (VBID), “falls squarely under that umbrella,” Mark Fendrick, who directs the Center for Value-Based Insurance Design at the University of Michigan, said.

Plans in the Medicare Advantage Value-Based Insurance Design Model, by State

The expansion of VBID in Medicare Advantage to all 50 states is one of the few ideas with bipartisan support, he said. Price’s comment “backs that up,” he told Bloomberg BNA Feb. 13.

Expansion of the model is important, supporters say, because it will allow additional plans to add coverage or eliminate cost sharing for beneficiaries with chronic conditions like diabetes, improving health outcomes and saving the health system money.

Started Jan. 1

The model, which began a five-year run on Jan. 1, is needed to get around Medicare’s prohibition on different treatment of beneficiaries, Fendrick said. Medicare’s nondiscrimination clause requires every beneficiary to have the same benefit design.

The VBID, on the other hand, uses a waiver to allow plans to structure benefits just for those with certain conditions, including diabetes, congestive heart failure and hypertension. MA plans may add extra coverage or eliminate cost sharing for items, services and pharmaceuticals just for some beneficiaries.

For example, beneficiaries with diabetes should be allowed to see an eye doctor more frequently than other beneficiaries, Fendrick said. The model would allow an MA plan to offer an eye exam with lower cost sharing only for diabetics, he said.

This is called “good discrimination,” Fendrick said.

Recent Support

The model got a boost Feb. 9 with the release of the Bipartisan Policy Center’s preliminary policy paper on Medicare policy options. The paper suggests Congress allow Medicare to waive its uniform benefit requirements and target services for certain MA enrollees.

Two days earlier, Reps. Diane Black (R-Tenn) and Earl Blumemauer (D-Ore.) held a briefing for congressional staffers on VBID in Medicare and other health-care sectors.

Similar approaches are being used in the commercial market but VBID popularity in Medicare is unclear.

The Medicare agency authorized the first round of the model in seven states: Arizona, Indiana, Iowa, Massachusetts, Oregon, Pennsylvania and Tennessee. Applications closed in January for a second round beginning in 2018 for Alabama, Michigan and Texas.

No Plans in Four States

However, for the first round, the agency approved plans only in three of the seven authorized states—Massachusetts, Pennsylvania and Indiana.

MA organizations taking part include Aetna Inc., Blue Cross Blue Shield of Massachusetts and Geisinger.

The model is still in its “early days,” Larry McNeely, policy director for the Washington-based National Coalition on Health Care, told Bloomberg BNA Feb. 14.

It’s a big change for plans to offer a “nuanced benefit design” for their enrollees, particularly if it’s just going to be for a limited time, according to McNeely. His organization is part of the Smarter Health Care Coalition, which supports VBID and other health-care initiatives.

Also, large or national managed care organizations may hesitate to undertake this when they can offer it only for some of their locations, he said.

Because of this, it makes sense to “take it nationally” so MA plans in other states can participate, he said.

Push to Expand

The push is on to do just that.

The Senate Finance Committee’s bipartisan chronic care legislation from the last Congress allowed MA plans in any state to participate in the VBID model during the testing phase. Chairman Orrin Hatch (R-Utah) is talking with members on how to advance the bill in the 115th Congress, a spokesman said Feb. 15.

Black and Blumenauer are expected to introduce legislation to expand the program in public and private sectors.

“I think the chances of expansion are very good,” McNeely said, although there’s plenty of competing interests for health-care legislation. It could be included in a large bipartisan package, he said.

Preferring Slower Approach

But not all are gung-ho about going national at this stage.

The Medicare Rights Center is generally supportive of the model, particularly consumer protections for cost sharing and educational requirements, Stacy Sanders, federal policy director, told Bloomberg BNA

The beneficiary advocacy group, however, is concerned about beneficiary access to networks of providers who are deemed to be high value, she said.

The group prefers a phased-in approach, first analyzing whether cost-sharing incentives actually encourage beneficiaries to seek out higher-value care and save money, she said.

However, McNeely said the more plans allowed to participate, the more data the government can collect.

To contact the reporter on this story: Mindy Yochelson in Washington at MYochelson@bna.com

To contact the editor responsible for this story: Kendra Casey Plank at kcasey@bna.com

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