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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.
The VBID model test is occurring in a rapidly changing policy environment in which CMS is allowing more flexibility in benefit design through changes to the uniformity rule and the nationwide VBID model expansion. Our results point to 4 important considerations that may affect insurers’ willingness to adopt VBID in or outside the model test:

Evidence is important. Many insurers cited uncertainty about ROI as a key reason for nonparticipation. Generating evidence on VBID’s effects in the MA population may help insurers estimate the impact to their bottom lines and make an informed decision about MA VBID.

Insurers’ philosophy, rather than market characteristics, may influence participation. Our study participants did not believe that market characteristics affected their decisions to join VBID. Instead, VBID participants welcomed the opportunity to experiment with benefit design to improve beneficiary health outcomes and care quality and viewed ROI as a secondary concern. Willingness to innovate with benefit design and be considered a leader in the MA space were more important for model participants than potential concerns about ROI. Nonparticipants, however, took a “wait-and-see” approach and wanted to avoid the unknown outcomes of VBID in the MA population. In some cases, they felt that they were already providing high-quality care and were reluctant to experiment given uncertainties.

Technological barriers can be significant. Many participants had to invest in IT systems to enroll beneficiaries in VBID, track their benefits, and pay the correct amounts to providers. Participants, especially those requiring beneficiaries to engage in care management, also needed to coordinate multiple internal departments that did not previously communicate or work together. Although such issues are not insurmountable, they may deter some insurers from offering VBID benefits until appropriate changes to their IT systems are implemented and tested.

Model test parameters matter. Nonparticipants indicated that they would be more likely to join the model test if they had even more flexibility to design and target benefits, and both participants and nonparticipants cited CMS’ marketing restrictions as an impediment to participation. CMS has already lowered participation barriers by allowing insurers to target additional conditions, extending eligibility to C-SNPs, and relaxing marketing restrictions. Additional flexibility will be permitted in 2020.28

Limitations

Our qualitative study has 3 limitations. First, insurers not responding to our interview requests may have had different perspectives on VBID than those who responded. This may be a particular concern for nonparticipants, given that only about one-third of nonparticipating insurers responded. To address this issue, we analyzed written comments from MA insurers who responded to CMS’ request for comments on the model test, but we did not see major differences in perspectives with those we interviewed. Second, we conducted interviews 6 to 8 months after the start of the model test, when MA insurers were still working toward finding solutions to some implementation challenges. Subsequent data collection may reveal additional implementation challenges and facilitators. Third, our study relied on self-reported data collected from model participants either by phone or in person and from model nonparticipants only by phone. Some participants may not have disclosed all implementation challenges they might have experienced, and, although unlikely, the mode of data collection might have affected responses.

CONCLUSIONS

Currently, MA VBID uptake is low. To address perceived participation barriers, we suggest 3 potential solutions. First, CMS could provide additional in-kind assistance to model participants, including approved templates for beneficiary communication materials, to facilitate model implementation. Moreover, CMS could consider ways to disseminate findings widely and encourage participants to share their implementation experiences with other model participants through collaborative learning sessions.

Second, insurers considering joining the model test may benefit from learning about the implementation experiences of current model participants, including ways to overcome IT challenges. Reviewing the results of the first year of the model test evaluation21 may help alleviate some concerns that current nonparticipants may have.

Finally, once insurers decide to implement VBID, they should engage their IT departments or external IT vendors early on to ensure that they can develop a strategy for managing 2 sets of benefits within the same plan.

Author Affiliations: RAND Corporation (DK, CB, KB, CA, ET, CE), Santa Monica, CA; Center for Medicare and Medicaid Innovation, CMS (SM), Baltimore, MD.

Source of Funding: Funding for this study was provided by CMS, contract: HHSM-500-2014-00036I, Task Order HHSM-500-T0003.

Author Disclosures: The authors report no relationship or financial interest with any entity that would pose a conflict of interest with the subject matter of this article.

Authorship Information: Concept and design (DK, CB, SM, CE); acquisition of data (DK, CB, KB, CA); analysis and interpretation of data (DK, CB, KB, CA, CE); drafting of the manuscript (DK, CB, KB, CA, ET, CE); critical revision of the manuscript for important intellectual content (DK, CB, CA, SM, ET); obtaining funding (DK, CB, SM, ET, CE); administrative, technical, or logistic support (DK, CB); and supervision (DK, SM, CE).

Address Correspondence to: Dmitry Khodyakov, PhD, RAND Corporation, 1776 Main St, Santa Monica, CA 90401. Email: Dmitry_Khodyakov@rand.org.
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