Testing Value-Based Insurance Design (V-BID) in Medicare Advantage demonstration project
ANN ARBOR, MI —On June 17th, the United States House of Representatives passed The Strengthening Medicare Advantage through Innovation and Transparency for Seniors Act of 2015 (H.R. 2570, available via umhealth.me/vbid-bill).
This bipartisan legislation would establish a demonstration project allowing Medicare Advantage plans to use a principle called Value-Based Insurance Design (V-BID), a concept born from University of Michigan research that aligns patients’ out-of-pocket costs, such as copayments, with the value -- not the cost -- of health care services.
If the bill becomes law, it would allow Medicare Advantage plans to lower copayments and coinsurance for their beneficiaries, encouraging the use of high-value, evidence-based medical services to better manage chronic conditions. It explicitly prevents plans from increasing beneficiary cost-sharing on any service. The legislation was originally introduced by U.S. Reps. Diane Black (R-TN), Earl Blumenauer (D-OR) and Cathy McMorris Rodgers (R-WA).
The bipartisan companion bill, the Value-Based Insurance Design Seniors Copayment Reduction Act of 2015 (S.1396), was introduced to the Senate on May 20th by U.S. Senators Debbie Stabenow (D-MI) and John Thune (R-SD).
In addition to the Capitol Hill activity, V-BID was included in a recent Centers for Medicare and Medicaid Services (CMS) Request for Information to Innovate Medicare.
The V-BID concept grew out of a decade of work by U-M health policy researchers in the School of Public Health and Medical School, and the jointly run V-BID Center. U-M faculty members include V-BID Center director, A. Mark Fendrick, M.D., and research director, Richard Hirth, Ph.D. Former U-M faculty member Michael Chernew, Ph.D., was also instrumental to the development and testing of the V-BID concept.
To date, V-BID programs have been implemented by numerous private and public payers, employers, unions, and business coalitions nationwide. The accumulating evidence validates a central V-BID premise: that reducing out-of-pocket costs for selected high-value medical services for certain patients can improve health outcomes, reduce disparities and potentially slow the growth of health care costs.
It’s the most recent example of how the products of U-M health research are informing national and state policies and legislation – a key emphasis for the University’s Institute for Healthcare Policy and Innovation.
The V-BID Center’s faculty are among the more than 460 U-M researchers who study health care delivery, safety, outcomes, and behavior as part of the U-M Institute for Healthcare Policy and Innovation. As its name suggests, one of the institute’s key goals is to foster the ability of U-M research to inform all aspects of public health care policy on the state and national level. For more about IHPI, visit www.ihpi.umich.edu.
An IHPI policy brief on V-BID is available at http://ihpi.umich.edu/our-work/ihpi-briefs
For more about the V-BID Center, its research, and examples of public and private health care organizations that have endorsed or implemented the V-BID concept, visit www.vbidcenter.org.