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VBID Model Takes on Social Determinants of Health in Medicare Advantage

Starting in 2025, Medicare Advantage organizations participating in VBID model must offer supplemental benefits that address SDOH

April 12, 2023The Centers for Medicare & Medicaid Services (CMS) has extended the value-based insurance design (VBID) for an additional 5 years. This extension will help improve access to care and reduce disparities for vulnerable populations, as changes to the plan include requirements that address social determinants of health (SDOH), improve care coordination, and advance health equity.

The VBID model is designed to incentivize Medicare Advantage plans to take action on social determinants of health, such as food insecurity, transportation, and housing. Addressing these factors can improve health outcomes and reduce healthcare costs for beneficiaries, which is a win-win.

So, what is the VBID model? It is the value-based insurance design model and emphasizes the importance of aligning financial incentives with high-value services. The VBID model encourages plans to offer lower copayments and provide other cost-sharing measures for services like chronic disease management, preventive care, and medication adherence, that are shown to increase health outcomes.

That’s not all the VBID model does. It also encourages plans to address social determinants of health. Plans can do this by offering certain benefits and services, such as transportation or home-delivered meals, that are designed to help beneficiaries overcome barriers to care.

Thus far, the VBID model has been successful in improving health outcomes and reducing healthcare costs for Medicare Advantage beneficiaries. That is why CMS has extended the VBID model for another 5 years, albeit with changes. Studies have shown that participating plans have seen a significant decrease in hospital admissions and readmissions, as well as improved medication adherence and chronic disease management.

Another way that the VBID model improves healthcare I through additional data collection. This will help CMS better understand how beneficiaries are using supplemental benefits and the impact that these services have on health outcomes. 

The VBID model is a critical step towards addressing the social determinants of health and improving health equity. By incentivizing plans to take action on these factors, we can reduce disparities and improve outcomes for all.

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