Policy Examples

• In 2013, the Centers for Medicare and Medicaid Services (CMS) issued a rule granting states the flexibility to adjust co-payments in Medicaid plans to steer patients towards higher-value drugs and services with lower costs. source

Outcome Evidence

• In 2011, the Connecticut State Employee Health Enhancement Program was one of the first value-based insurance design (VBID) programs to go beyond prescription drugs and reduce cost sharing across the spectrum of care, including medical services for chronic disease. A 2016 Health Affairs study cited strong results that included an increase in the use of targeted services and adherence to medications for chronic conditions and a decrease in emergency department use, relative to the situation in comparison states. The study was unable to make a conclusive judgment on cost impact due to limited follow-up period data. source
• Pitney Bowes, a large technology corporation, is known for having one of the first private VBID system and successfully reducing copays for chronic disease for its employees as a result. source
• Marriott International paid $400 million in annual employee health benefits, which was increasing around 7% annually. Their change to a VBID system reduced medication copays for chronic diseases, realizing savings through prevention of adverse events. source
• In 2017, Medicare Advantage (MA) insurers in seven states could participate in a value-based insurance design (VBID) model. In 2019, the program grew to 13 MA and MA prescription drug (MA-PD) plans from ten parent organizations. Beginning in the 2021 plan year, the MA-VBID model will also allow plans to offer Medicare’s hospice benefit plan. source, source, & source
• In 2013, New Mexico was granted an 1115 waiver from CMS to incentivize accountability in Medicaid beneficiaries. Four years after implementation, New Mexico’s Medicaid population had grown 575% (including the expansion population) and over 600,000 health risk assessments had been administered. An update to the waiver was submitted to CMS June 7, 2019. source, source, & source
• In 2013, CMS issued a rule granting states the flexibility to adjust co-payments in Medicaid plans to steer patients towards higher-value drugs and services with lower costs. source
• According to the Center for VBID at the University of Michigan, if implemented successfully, a clinically nuanced cost-sharing model can enhance the use of high-value clinical services and reduce utilization of unnecessary and costly services, while fostering consumer engagement and personal accountability. source