CMS updates 2 payment models for Medicare plans: 7 things to know

CMS debuted two Medicare Advantage health plan changes that it will test under the Value-Based Insurance Design model for 2020, the agency said Jan. 18.

Seven things to know:

1. The new Medicare Advantage model is an update to the Medicare VBID model, which was launched in 2017. The new Medicare Part D model is dubbed the Part D Payment Modernization model.

2. Both models are voluntary, allowing certain Medicare Advantage and Part D plans to opt in to the model. Patients can also choose to enroll in plans participating in the model.

3. The VBID model will test changes to Medicare Advantage plans, allowing them to offer Medicare's hospice benefit beginning in 2021. In addition, CMS will allow Medicare Advantage plans to use telehealth services instead of in-person visits. This can be done as long as the in-person option remains intact.

4. Medicare Advantage plans nationwide can apply for the VBID model for 2020. The model is now available to more types of Medicare Advantage plans, including Special Needs Plans and Regional Preferred Provider Organizations.

5. The Part D Payment Modernization model aims to affect how much Part D plans spend on drugs when patients enter the final phase of the benefit, or the "catastrophic phase." At this point, Medicare pays 80 percent of drug costs. CMS said this stage doesn't incentivize plans to negotiate lower costs for high-spending patients.

6. Effective in 2020, the new Part D model will require participating plans to take on more risk for spending in the catastrophic phase. CMS will calculate a spending threshold based on plan year performance. If Part D plans stay below the benchmark, they'll share in savings. If they surpass it, they'll share in losses.

7. The Part D Payment Modernization and VBID models will run through 2024. CMS said if the plans hit specific targets based on quality, cost and benefit access, they can be expanded.

Access the CMS fact sheet on the changes here.

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