Medicare Advantage Value-Based Insurance Design Model

The Medicare Advantage (MA) Value-Based Insurance Design (VBID) Model has been extended for calendar years (CY) through 2030 and introduced changes intended to more fully address the health-related social needs of patients, advance health equity, and improve care coordination for patients. For more information about the model extension, please see our fact sheet. This blog post shares more information about how CMS continues to shape the VBID Model.

Important VBID Model Resources:

VBID: Innovating to Meet Person-Centered Needs

Through the Medicare Advantage (MA) Value-Based Insurance Design (VBID) Model, CMS is testing a broad array of complementary MA health plan innovations designed to reduce Medicare program expenditures, enhance the quality of care for Medicare beneficiaries, including those with low incomes such as dual-eligibles, and improve the coordination and efficiency of health care service delivery. Overall, the VBID Model contributes to the modernization of MA and tests whether these model components improve health outcomes and lower costs for MA enrollees.

For CY 2024, the VBID Model has 69 participating Medicare Advantage Organizations (MAOs) with a total of 12.4 million enrollees projected to be enrolled in participating plan benefit packages (PBPs). Over 8.7 million of these enrollees are projected to be offered additional Model benefits and/or rewards and incentives as part of the Model test in 2024.

*Indicates participation in the Hospice Benefit Component of the VBID Model for Calendar Year 2024

Highlights

Background on Medicare Advantage (MA)

MA plans offer Medicare beneficiaries an alternative to Original Medicare. In addition to covering all Medicare services, some MA plans also offer beneficiaries extra coverage through supplemental benefits such as vision, hearing, and dental services. Additionally, some MA plans also offer prescription drug coverage (Part D) as part of their plan.

MA plans can charge different out-of-pocket costs for certain services within guidelines defined by Medicare. VBID generally refers to health insurers’ efforts to structure cost-sharing and other health plan design elements to encourage enrollees to use the services that can benefit them the most.

Additionally, currently, Medicare Beneficiaries may enroll into MA and have access to all original Medicare benefits plus additional supplemental benefits beyond what original Medicare covers. Historically, when an MA enrollee elects hospice, Fee-For-Service (FFS) Medicare becomes responsible for most services while the MA organization retains responsibility for certain services (e.g., supplemental benefits). This hospice “carve-out” from MA results in a convoluted set of coverage rules for MA enrollees who elect hospice and fragments accountability for care and financial responsibility across the care continuum.

VBID Model Details

The VBID Model tests a broad array of MA service delivery and/or payment approaches and contributes to the modernization of MA through increasing choice, lowering cost, and improving the quality of care for Medicare beneficiaries.

The VBID Model allows participating MAOs to further target benefit design to enrollees based on chronic condition, socioeconomic characteristics (as defined as being eligible for the Low Income Subsidy (LIS) or, in US territories, being dually eligible), and/or place of residence in the most underserved area derivation index (ADI) areas and/or incentivize the use of Part D prescription drug benefits through rewards and incentives.

In Calendar Year (CY) 2025, the VBID Model will test the following Model Components:

  1. VBID Flexibilities, for Model PBPs’ select enrollees targeted by chronic health condition, socioeconomic status, and/or place of residence in the most underserved ADI areas, for offering:
    1. Primarily and non-primarily health related supplemental benefits
    2. Use of high-value providers and/or participation in care management program(s)/ disease state management program(s)
    3. Reductions in cost-sharing for Part C items and services and covered Part D drugs

    For more details on these Model Components please see the links to the Requests for Applications (RFA) below.

    Hospice Benefit Component

    The Centers for Medicare & Medicaid Services announced in January 2019 that beginning in CY 2021, through the VBID Model Hospice Benefit Component, participating MAOs could include the Medicare hospice benefit in their Part A benefits package. After careful consideration, CMS has decided to terminate the Hospice Benefit Component as of 11:59 PM, December 31, 2024. CMS will not be accepting applications to the previously released CY 2025 Request for Applications for the Hospice Benefit Component of the VBID Model.

    Under the Model in CY 2024, 13 MAOs, through 78 PBPs, will participate in the Hospice Benefit Component of the VBID Model. These PBPs will test the Hospice Benefit Component in service areas covering 690 counties.

    A list of VBID Model Hospice Benefit Component participating plans is available, as well as downloadable list of PBPs with service area and contact information which can be found here: VBID CY2024 Hospice Benefit Contact Information (XLSX)

    By including the Medicare hospice benefit in the MA benefits package, CMS tests the impact on service delivery and quality of MA plans providing all original Parts A and B Medicare items and services required by statute. Additionally, CMS is testing how the Hospice Benefit Component can improve beneficiary care through greater care coordination, reduced fragmentation, and transparency in line with recommendations by the Office of Inspector General (OIG), the Medicare Payment Advisory Commission (MedPAC) and others. CMS requires that MAOs provide beneficiaries with broad access to the complete original Medicare hospice benefit. MAOs participating in the Hospice Benefit Component are required to outline how they provide palliative care to eligible enrollees, irrespective of the election of hospice, and make transitional concurrent care services as well as hospice-specific supplemental benefits available to enrollees who elect hospice through network hospice providers.

    Information for Interested Parties

    If you are interested in receiving CMS Innovation Center updates, including about the VBID Model, subscribe to the CMS Innovation Center listserv.

    For any questions, please email the VBID Model team at VBID@cms.hhs.gov.

    CY 2025 Materials