Medicare’s value-based insurance design pilot could pave the way for wider implementation

through Medicare Advantage Value-Based Insurance Design (VBID) model, the Centers for Medicare and Medicaid Services (CMS) currently offer a wide range of services designed to reduce Medicare program spending, improve the quality of care for Medicare beneficiaries, and improve the coordination and efficiency of health service delivery. We are testing innovation.

Overall, the VBID model is intended to help modernize the way Medicare Advantage* plans, especially pharmacy benefits, are administered. In addition, the VBID model aims to improve health and reduce out-of-pocket costs for Medicare beneficiaries.

To bolster an experiment already underway with CMS, last month President Biden presidential decree On “Reducing the Cost of Prescription Drugs for Americans”. Specifically, the order aims to help Innovation Centers reduce the cost of prescription drugs while facilitating access to “innovative drug therapies” for beneficiaries enrolled in Medicare and Medicaid programs. and to select pilot tests for new healthcare payment and delivery models.

Located within the Department of Health and Human Services, the Medicare and Medicaid Innovation Center (“Innovation Center”) has extensive experience piloting new healthcare payment and delivery arrangements.

The VBID model and executive order will help promote the use of value-based payments.

Traditionally, VBID has structured the use of patient cost sharing and other formulary management tools in a way that encourages subscribers to use the services that are most valuable to them, i.e. the services available to patients. I have mentioned the efforts of health insurance companies to benefit the most.

In contrast to a “one-size-fits-all” patient cost sharing approach, VBID aligns cost sharing (eg, stratification of copayments in formularies) with the clinical benefit of a drug or health service. Strictly cost. For example, high-value drugs, such as antiretroviral drugs for HIV, have nominal copayments or no cost sharing, while relatively low-value health services of dubious benefit, such as the prostate, , Cancer screening in men aged 70 years and older is costly for the patient.

Professor Mark Fendrick, director of the Center for Value-Based Insurance Design at the University of Michigan, is the founder of VBID. Fendrick, along with other original proponents, envisioned a clinical evidence-based method that paved the way for the widespread use of value-based formulary design in the health insurance sector.

VBID is not yet common among commercial insurers. However, improvements have been demonstrated when VBID is applied, reducing financial and other barriers to high-value health care interventions. medication adherence Reduce medical costs.

A pilot version of the Medicare Advantage Plan, the VBID model, could spark a VBID resurgence in both the private and public insurance markets.

In 2022, the VBID model will have 34 participating Medicare Advantage plans, with a total of 7.8 million beneficiaries enrolled in participating plan benefit packages. Also, out of 7.8 million, approximately 3.7 million receive additional his VBID model benefits and incentives.

Undoubtedly, VBID would constitute an improvement over the current system, where a drug’s formulary position (cost-sharing designation) and clinical value are typically uncorrelated. In addition, current formulary management systems do not necessarily require evidence-based use of reimbursement terms, such as pre-approval and tiered therapy, which are often applied when a drug is eligible. Pre-approval refers to the health insurance company’s requirement that the patient obtain approval for the drug before the drug is prescribed and dispensed. This allows a plan to assess whether medication is “medically necessary”. Step therapy is often used in conjunction with prior approval. It refers to the time when a patient must first fail a recommended treatment before “stepping up” to a more expensive treatment.

While these formulary management tools can be costly, measures such as step therapy can significantly limit patient access to certain medically necessary treatments. Additionally, these limits are often cost-based rather than value-based.

American lawmakers drafting a bill It is intended to discourage the use of pre-approval and step therapy.For example, the Massachusetts Legislature Guardrails for step therapyIn late July this year, the Massachusetts House of Representatives Passes H.4929, “Step Therapy and Patient Safety Practices”. Governor Baker recently signed the bill into law.

Despite being a noble effort to remove barriers to access, such legislation represents a roundabout way of addressing problems that could be more efficiently solved by implementing value-based concepts such as VBID. .

If payers in both the public sector (Medicare and Medicaid) and the commercial sector conducted systematic valuations of drugs and assigned the highest value to the least restrictive cost-bearing tier, steps, etc. Treatments that reduce uptake may reduce the need for blunt cost-containment measures.

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