Extended Medicare Advantage VBID Model Will Address SDOH, Health Equity

CMS has extended the Medicare Advantage value-based insurance design (VBID) model for an additional five years, with plans to implement changes that address beneficiaries’ social determinants of health, improve care coordination, and advance health equity.

Within the Medicare Advantage program, plans can use the VBID model to structure cost-sharing and other benefit designs to encourage beneficiaries to seek high-value healthcare services. The model tests various Medicare Advantage service delivery and payment approaches that aim to lower costs and improve care quality for beneficiaries.

The model also includes a Hospice Benefit Component to help patients requiring end-of-life care transition to hospice care if they choose that option.

In 2020, the VBID model was extended to calendar year 2025. CMS has recently announced that the model will now run until 2030. The third phase of the model, beginning in 2025, will include several new policies.

In the VBID General model, Medicare Advantage organizations will be required to offer supplemental benefits that address social determinants of health in at least two of three areas: food, transportation and housing insecurity, and living environment. The benefits should be targeted to meet beneficiary needs and could include meals beyond a limited basis, transportation to medical appointments, and housing assistance.

The model will introduce a new flexibility that allows Medicare Advantage plans to address health-related social needs in socioeconomically disadvantaged areas using the Area Deprivation Index (ADI). Current flexibilities use income as a criterion, which may lead to plans bypassing beneficiaries who have health-related social needs but do not qualify for certain benefits.

In addition, the model will require additional data collection to help CMS better understand how beneficiaries use supplemental benefits and their impact.

The VBID Hospice Benefit Component will also undergo changes starting in 2025. Medicare beneficiaries who choose hospice services typically give up their right to receive curative healthcare services.

However, under the extended model, CMS will more closely align flexibility for concurrent care with those offered in other CMMI models. This will allow Medicare Advantage plans to partner with in-network providers and increase access to person-centered care for hospice patients.

Starting in 2026, Medicare Advantage organizations will also have more flexibility to require their beneficiaries to only receive hospice services from hospice providers in their network if they meet CMS’ network adequacy requirements. This adjustment will help ensure beneficiaries have better care continuity and receive higher-quality hospice care, CMS said.

A recent study found that California’s VBID model was associated with a higher probability of primary care use and a lower probability of inpatient admissions. In addition, total costs for plan members remained the same during the first two years, as out-of-pocket costs were higher for outpatient care but lower for inpatient care.