Built on the principle of lowering or removing financial barriers to essential clinical services, value-based insurance design (V-BID) featured in recent federal policies.
On March 11, 2020, the IRS issued guidance (Notice 2020-15, High Deductible Health Plans and Expenses Related to COVID-19) that confirms that health plans and employers may reduce or eliminate cost-sharing for COVID-19 screening, treatment, and vaccination, including for Americans enrolled in high-deductible health plans coupled with Health Savings Accounts. Built on the principle of lowering or removing financial barriers to essential clinical services, value-based insurance design (V-BID) aims to align patients’ out-of-pocket costs, such as copayments, with the value of services. This move embodies value-based insurance design by reducing and eliminating cost-sharing for high-value health care.
Also on March 11, the Centers for Medicare & Medicaid Services (CMS) announced a Part D Senior Savings Model that enables participating Part D enhanced plans to lower Medicare beneficiaries’ out of pocket costs for insulin. This will allow beneficiaries to have a predictable and affordable copay for insulin, which is expected to create greater access and adherence, and hence improved health outcomes. This voluntary model is also founded in V-BID principles.
Additionally last month, the Centers for Medicare and Medicaid Services announced support for a model to test the inclusion of the U-M-developed value-based insurance design principles in Qualified Health Plans.
The new proposed rule (Notice of Benefit and Payment Parameters for 2021), the Centers for Medicare and Medicaid Services (CMS) announced support for a model to test the inclusion of University of Michigan-developed value-based insurance design principles in Qualified Health Plans (QHPs), which are insurance plans that are certified by the Health Insurance Marketplace (or Exchange) and meet requirements under the Affordable Care Act.
In designing the model, CMS used a value-based framework for the individual health insurance market (“V-BID X”) developed by the U-M Center for Value-Based Insurance Design, along with partners from Harvard, Blue Cross Blue Shield Association, America’s Health Insurance Plans, and state exchanges.
V-BID X was designed to showcase foremost that increasing utilization on a slate of high-value services, equipment, and drugs could be achieved with no increase in insurance premiums. The mechanism to offset this utilization is through increased cost-sharing on low-value services, such as vitamin D screening tests and diagnostic tests before low-risk surgery.
CMS’s consideration of the V-BID X framework for marketplace health plans reflects the broader implementation of value-based insurance design principles in recent years. In 2017, CMS launched a Medicare Advantage V-BID model test in select states. In 2018, the Bipartisan Budget Act expanded the Medicare Advantage V-BID model to all 50 states. The inclusion of V-BID elements across health care coverage options may improve access to high-value services while containing the growth of health care expenditures.
IHPI member A. Mark Fendrick, M.D., is the developer of the V-BID concept and director of the University of Michigan V-BID Center.
Learn more about the V-BID model and V-BID X model plan: