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V-BID Summit

How Public Payers Are Adopting VBID Principles Despite Constraints

Christina Mattina
During a session on expanding the role of value-based insurance design (VBID) in public insurance at the University of Michigan V-BID Center’s annual V-BID Summit on March 14, panelists representing 3 different payers shared how they have seen value-based principles take hold in their plans and their predictions for the future.
During a session on expanding the role of value-based insurance design (VBID) in public payers at the University of Michigan V-BID Center’s annual V-BID Summit on March 14, panelists representing 3 different payers shared how they have seen value-based principles take hold in their plans and their predictions for the future.

Moderator Cliff Goodman, PhD, senior vice president at The Lewin Group, asked the panelists to introduce themselves and describe the type of payer they represent.

Captain Edward Simmer, MC, USN, chief clinical officer for the TRICARE program, explained that he oversees the clinical care provided to 9.5 million military service members, retirees, and dependents covered by the Military Health System. TRICARE is unique in that service members are not charged for medications or care, and cost sharing for retirees or dependents is capped at $3500 per year. The generous benefit requirements and cost-sharing restrictions imposed by Congress have forced program officials to be creative in how they incentivize beneficiaries to change their healthcare utilization habits, Simmer explained.

Claire Levitt, MS, deputy commissioner for the New York City Mayor’s Office of Labor Relations, could empathize with that challenge, as the 1.2 million city employees, dependents, and retirees in the city’s health benefits program are represented by unions that consistently ensure that their health plans have no deductibles or premiums.

Finally, Adam Finkelstein, JD, MPH, counsel with Manatt Health, explained that his prior experience as a health insurance specialist at CMS’ Center for Medicare & Medicaid Innovation had given him insight on how VBID principles are being tested in Medicare Advantage (MA) plans. He called it “remarkable” that CMS was willing to take the leap into VBID by letting MA plans offer reduced cost sharing for some high-value services in certain chronic diseases.

Asked to explain their plans’ specific strategies to implement VBID, the panelists presented the program changes and outcomes they had seen so far. Levitt explained that the city had agreed with the unions to attempt to save $3.4 billion in healthcare costs over 4 years by strategically adding costs in specific areas and “changing plan design in concert with foundational VBID principles.”

For instance, the plan increased co-payments for emergency department (ED) and specialist visits and covered all preventive care services, thus shifting utilization toward the primary care setting. It also offered wellness initiatives and health management programs at work sites, which she said have resulted in positive engagement and retention outcomes.

Simmer outlined some of the ways that TRICARE attempts to steer beneficiaries to the right care instead of charging different amounts for different services, which current law likely would not allow. One tactic was to require a referral for ED visits, but not urgent care visits, to encourage patients to choose urgent care over the costlier ED. Lists of participating maternity care providers now feature a “golden stork” next to high-performing providers as ranked by Leapfrog scores. Members receiving preventive care, such as mammograms, get a pass that rewards them with the privilege of going to the head of the line at the pharmacy.

“In a way, we’re kind of building up a set of tools and leverage that aren’t necessarily financial,” Goodman paraphrased, “and we’ve also learned that they don’t have to apply to all services.”



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