What CMS's value-based insurance model means for population health

CMS recently announced a new pilot program that will allow Medicare Advantage plans to lower beneficiaries' out-of-pocket costs, with the goal of encouraging members to use high-quality services.

Get more details on the pilot program

The program could be a step forward in helping to improve care for beneficiaries with chronic conditions—but how big of a deal could it be for population health? And what should providers do to best capitalize on the opportunity?

The Daily Briefing's Josh Zeitlin spoke with an expert who would know: John Kontor, an EVP at Clinovations, within Advisory Board Consulting and Management.

Question: The Medicare Advantage Value-Based Insurance Design (MA-VBID) Model aims to solve the problem of beneficiary out-of-pocket costs leading them to forgo needed care. How big of a problem is that for providers today?

John Kontor: Beneficiaries' concern about out-of-pocket costs is one of the most important factors that contribute to poor adherence to treatment regimens.

Most providers currently have a small, but increasing percentage of their total compensation tied directly to process and outcome measures. And that means non-adherence not only can have a negative effect on patients' health, but on providers' bottom lines, too.

Q: What does that mean for population health? Could MA-VBID be a game-changer for providers in the seven pilot states?

Kontor: The MA-VBID program would certainly mitigate one of the key barriers to improving care outcomes—out-of-pocket cost of diagnostics, medications, and other treatments. Reducing the burden of those costs for beneficiaries should help providers better manage their patients, particularly those with chronic diseases requiring ongoing medical treatment.

However, reducing those costs is only one of many components for improving population health. That's clear from the recent introduction of federal funding to support annual wellness visits. Although Medicare now covers this benefit for most of its beneficiaries, fewer than 15% of them took advantage of the service last year.

Q: So, how can providers in the participating stakes make sure they are maximizing their potential to see positive results from MA-VBID?

Kontor: To really take advantage of the MA-VBID model and move the needle on care management, providers need to improve core population health and risk-based care provider capabilities, which remain a challenge.

That includes capabilities like patient engagement, attribution and tracking, access, office care model and staffing redesign, and effective use of analytics, decision support, and registries.

Q: How do you see the MA-VBID model changing the relationship between MA insurers and providers?

Kontor: MA-VBID is one of several examples of recent changes in federal funding mechanisms that are contributing to increased alignment of incentives between insurers and providers. Risk adjustment of payments for Medicare benefices and exchange enrollees using the HCC methodology and annual wellness visit funding are both good examples of programs that jointly incentivize effective prevention, wellness, and chronic disease management.

Increasingly, insurers are looking for compliant approaches to partner with provider organizations to improve performance in these programs that can benefit providers, patients, and insurers.

Provider organizations that are proactively engaging with their primary payers to improve clinical documentation performance are also often able to improve their bottom lines.

Q: Do you think this pilot project could help drive change in the commercial health plan sector? If it's successful, could we see changes to regulations regarding cost-sharing for enrollees in health savings accounts and high-deductible plans?

Kontor: If the pilot is successful, I do think we will see gradual spread of the approach to commercial models through regulation or, if longer-term costs are moderated, as a result of financial drivers.


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