Evaluation of Phase II of the Medicare Advantage Value-Based Insurance Design Model Test

This report presents RAND Corporation researchers' findings from their evaluation of Phase II of the Medicare Advantage (MA) Value-Based Insurance Design (VBID) Model test, initiated by the Center for Medicare & Medicaid Innovation (Innovation Center), for the first three years of implementation. This model allows participating MA parent organizations (POs) to offer supplemental benefits and financial and nonfinancial incentives to beneficiaries, hospice benefits (an MA Hospice Benefit, palliative care, Transitional Concurrent Care, and hospice supplemental benefits), and Wellness and Health Care Planning through their MA plans. Some benefits may be targeted to beneficiaries with certain chronic conditions or based on beneficiaries' socioeconomic status measured by qualification for the Medicare Part D low-income subsidy (LIS) or by dual eligibility for Medicare and Medicaid in territories where LIS is not available.

In this report, we describe findings from interviews with representatives of participating POs, in-network and out-of-network hospices, and beneficiaries. We also report initial findings on the estimated association between VBID and a variety of key outcomes. Data availability to assess outcomes varied given lags in encounter data run-out periods and pandemic-related changes to data reporting that affected some 2020 outcomes. For most plan-level outcomes, we analyzed data for 2020, 2021, and 2022. For most beneficiary-level outcomes, including utilization and health outcomes, we analyzed data for only one postimplementation year—2020. For contract-level outcomes—namely, the Star Rating—we analyzed data for 2021, because of coronavirus pandemic–related adjustments that affected reporting in 2020. We analyzed outcomes including enrollment, care quality, health outcomes, bids, premiums, and costs to the Centers for Medicare & Medicaid Services (CMS).

A separate appendix provides additional information on primary data collection and analysis, statistical approach, and other material. The results will be useful to multiple audiences, such as policymakers, health plans, and researchers interested in insurance benefit design.