Evaluation Report of the First Three Years (2017-2019) of the Medicare Advantage Value-Based Insurance Design Model Test

Value-based insurance design (VBID) refers to health insurers' efforts to structure cost-sharing and other health plan design elements to encourage enrollees with chronic conditions to use the services that can benefit them the most. Examples include lower prescription drug copayments to increase medication adherence and reduced patient cost-sharing for visits with high-value providers to spur people to get recommended checkups. The goals of VBID are to improve patient health through better disease control and to save money by reducing costly complications that can occur when chronic conditions are poorly managed. Until recently, VBID had not been implemented or tested among individuals aged 65 and older. However, under the authority granted to the Centers for Medicare & Medicaid Services (CMS) under section 1115A of the Social Security Act, the Center for Medicare & Medicaid Innovation (CMMI) within CMS is currently conducting a Medicare Advantage (MA) VBID model test. First implemented in 2017, the voluntary program allows Medicare Advantage Organizations (MAOs) and their parent organizations (POs) to alter specific benefit design elements within their plan benefit packages (PBPs) to encourage enrollees with targeted conditions to use high-value services and providers. CMMI contracted with the RAND Corporation to evaluate the first three years of the MA VBID model test, which ran from January 1, 2017 through December 31, 2019. This report serves as our second and final evaluation of the first three years of the model test. The evaluation considers POs, beneficiaries, and, in some cases, providers' participation experiences and assesses the effect of VBID on key outcomes such as health care service utilization, cost, and quality. This report builds on our first evaluation report of the MA VBID model test (Eibner et al., 2018), published in early 2019, by adding data that have since become available and by providing information on how POs' experiences have changed over time.