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Insurers’ Perspectives on MA Value-Based Insurance Design Model

Dmitry Khodyakov, PhD; Christine Buttorff, PhD; Kathryn Bouskill, PhD; Courtney Armstrong, MPH; Sai Ma, PhD; Erin Audrey Taylor, PhD; and Christine Eibner, PhD
This article describes perspectives of Medicare Advantage (MA) insurers about participating in the CMS value-based insurance design model test launched in 2017.
Data Analysis

Four experienced qualitative researchers used MaxQDA (VERBI Software; Berlin, Germany) to code each transcript and identify key themes, using a code book with codes derived deductively from the interview guides (eg, reasons for [not] joining the model test) and generated inductively based on unanticipated themes emerging from interviews (eg, information technology [IT] challenges).24 The coding team blindly double-coded 2 interviews with VBID nonparticipants and 4 interviews with VBID participants and discussed and resolved any discrepancies. All other interviews were coded by one person and reviewed by another. A few coding discrepancies, primarily related to the nuances of VBID model implementation, were resolved during team meetings.

We identified the most frequently mentioned reasons for either not joining or joining the model test and described strategies that participants used to overcome perceived barriers to joining MA VBID. eAppendix B provides additional quotations illustrating the main themes we present in the following Results section. To protect the confidentiality of our study participants, we deidentified insurer names (we use “NPInsurer” for VBID nonparticipants and “PInsurer” for participants) and refrained from providing individual-level characteristics of our study participants.


Differences Between Participants and Nonparticipants

Only 10 insurers (<30%) participated in VBID during the first 2 years of the model test. Five participants were from Pennsylvania, 3 from Massachusetts, and 1 each from Indiana and Michigan. Nine participants were state-based insurers; 1 was a national insurer. Four were BCBS affiliates. Participants chose to enter plans primarily in their health maintenance organization contracts. (Of 12 contracts, only 3 were preferred provider organization contracts.) Compared with participants, nonparticipants were less likely to be not-for-profit and state-level (as opposed to regional or national) insurers. Participants were no more likely to be BCBS affiliates than were nonparticipants.

The MA market is dynamic and, in many geographic areas, very competitive. Because participants did not know who would apply and be accepted for VBID, it is difficult to know whether competitive pressures affected their decisions. Nonetheless, none of our study participants believed that the level of market competition or their market share had an impact on their decisions. Model test participants, however, stated that Pennsylvania and Massachusetts, the states where most participants were from, are “in [fore]front of healthcare [reform] in general” (PInsurer03) and are full of “forward-thinking” insurers (PInsurer07).

Reasons for Not Joining VBID

The nonparticipants we interviewed identified 4 main reasons for not joining the model test. First, 8 nonparticipating insurers felt that they did not have enough information to structure their VBID offerings. As part of the application process, insurers had to demonstrate that their designs would achieve savings over a 5-year period. To estimate savings, insurers needed better actuarial information on the likely changes in utilization that could be expected in the Medicare population. Many insurers did not feel comfortable estimating these impacts using data from the employed population younger than 65 years. Insurers wanted more information to develop realistic assumptions, particularly about changes in utilization and savings. VBID nonparticipants wanted to see how VBID participants “structure their VBID benefit” (NPInsurer10), “how the intervention works” (NPInsurer04), and what outcomes it would achieve (see eAppendix B for additional quotations describing all thematic findings reported here).

Second, 7 VBID nonparticipants cited potential lack of return on investment (ROI): “We just could not come to a positive ROI to where the program would at least cover its own costs in year 1,” said one representative (NPInsurer01). They felt that the implementation and administrative costs of VBID were too high, and they viewed potential returns as relatively low, because many stated that they were already offering high-quality care.

Third, representatives of 7 nonparticipating insurers worried about administering 2 sets of benefits to beneficiaries within the same plan based on the presence of an eligible health condition. In MA, all beneficiaries in a plan, which they select during the annual open enrollment period, get the same benefits regardless of their medical conditions. Under VBID, beneficiaries in the same plan may get different benefits, depending on their diagnoses. Being diagnosed with an eligible condition midyear could trigger a change in benefits. Nonparticipants worried about their IT capabilities and the ability of internal systems to identify, track, and administer VBID benefits. As NPInsurer08 put it, “How do you identify those [VBID-eligible] members and be able to administer those benefits to them specifically and not to the general population or vice versa? [How do you] make sure that we are able to track the claims? [How do we] make sure [the benefits] are administered exactly the way that we submitted in the bid, no more, no less?”

Finally, nonparticipating insurers raised concerns about the model test parameters. For example, some wanted to implement VBID in Chronic Care Special Needs Plans (C-SNPs). Others wanted to offer VBID to beneficiaries with conditions not allowed by the model test or to target a subset of beneficiaries, such as those with early- or late-stage diabetes. Five nonparticipants also worried that VBID marketing restrictions would not allow them to mention their participation in the model or specific VBID benefits in their pre-enrollment materials and outreach activities. As NPInsurer04 explained, “VBID almost looks like something you have to keep a secret for a while and…you can’t really use that to try to attract new members.” Some would have preferred to advertise their participation in VBID to further distinguish themselves from competitors.

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