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Medicare has taken another step toward permitting private health plans to tailor their benefits to enrollees’ individual health needs, rather than offering the same benefits to all.
By 2019, Medicare Advantage plans in half the nation will be able to participate in a demonstration that lets them offer supplemental benefits or discounted cost-sharing to those with specific chronic conditions, such as diabetes. The Medicare agency announced Nov. 22 that 15 more states will be part of the experimental program, called Value-Based Insurance Design, or VBID, along with the 10 that will be involved in 2018.
The concept of altering private plan benefits just for certain enrollees is also part of proposed flexibility to vary benefits for Medicare Advantage enrollees in a draft regulation released Nov. 16. And, a chronic care bill (S. 870) passed by the Senate in September would allow national testing of VBID in the MA program in 2020 and 2021.
Medicare Advantage generally requires that an MA plan’s benefits and cost sharing be the same for all plan enrollees. The idea behind VBID is to encourage enrollees to use only those services that have the greatest impact on their health.
The Nov. 22 announcement will beef up the model by allowing MA plans to participate in these additional 15 states: California, Colorado, Florida, Georgia, Hawaii, Maine, Minnesota, Montana, New Jersey, New Mexico, North Carolina, North Dakota, South Dakota, Virginia, and West Virginia. States were selected because there were areas available for comparison once the model is evaluated.
The CMS will generally restrict participating plans to those with a minimum enrollment of 2,000 and that have at least three stars on a one-to-five quality rating scale. For 2019, the CMS is also allowing MA special needs plans that cater to beneficiaries with chronic diseases (C-SNPs) to participate.
For 2017 and 2018, the agency has specified the conditions for which plans may alter benefit designs, such as hypertension, dementia, and rheumatoid arthritis. In 2019, plans may add their own conditions or modify a CMS category to target a subset of enrollees.
“Medicare beneficiaries suffering from serious conditions such as chronic kidney disease, obesity/pre-diabetes, asthma, lower back pain and tobacco use will be included,” the Better Medicare Alliance, an MA advocacy group, said in a Nov. 22 statement.
The addition of the 15 states will give more MA plans “greater flexibility to provide more targeted, higher-quality and more cost-efficient care,” Mark Fendrick, who directs the Center for Value-Based Insurance Design at the University of Michigan, told Bloomberg Law.
The model began Jan. 1, 2017, and is permitted in Arizona, Indiana, Iowa, Massachusetts, Oregon, Pennsylvania, and Tennessee. The current nine participating sponsors are in three states: Massachusetts (3), Indiana (1), and Pennsylvania (5). Fallon Community Health Plan and Geisinger Health Plan are among the nine MA sponsors participating.
Plans in Alabama, Michigan, and Texas will be able to join as of Jan. 1.
The Senate’s chronic care bill (S. 870) would expand testing to 50 states, but the Congressional Budget Office said this could actually increase costs by $90 million between 2020 and 2021. A nationwide expansion would limit Medicare’s flexibility to modify the demonstration and use control groups, the CBO said. It could make it more difficult, for example, to expand upon aspects that look like they could lead to savings.
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