CMS: Excess Costs Kill MA VBID Program

Citing the Value Based Insurance Design (VBID) model's "substantial and unmitigable costs due to the Medicare Trust Funds," the Centers for Medicare and Medicaid Services (CMS) on December 16 announced plans to terminate it at the end of 2025. The timing is likely because 2025 MA plans are already finalized and the annual enrollment into these plans just ended.

The MA-VBID model began January 2017 as a mechanism for the Centers for Medicare and Medicaid Services (CMS) to test innovative ideas for enhancing Medicare Advantage (MA) enrollees' quality of care in MA plans. Successful VBID model components would be considered for incorporation into the broader MA program.

The latest evaluation of VBID, according to CMS, showed that it cost the Medicare Trust Fund more than $2 billion in both 2021 and 2022, costs driven by increased risk scores and Part D drug expenditures. Seeing no way to remedy these costs through model reforms, the agency opted to end the program. Earlier this year, CMS announced plans to end the Hospice Benefit Component of VCID at year's end after it proved unsuccessful, and participants lacked interest in continuing the model.

Advocacy organization the Better Medicare Alliance on December 18 2024 issued a press release expressing its displeasure with this move by CMS and noting that this action contradicts CMS's action last year to extend the program through 2030. Given the timing of this action, we would anticipate the Trump Administration reviewing this change.