New Value-Based Insurance Design Model Aims to Make Medicare Advantage Even Better

By Patrick Conway, M.D., MSc, CMS deputy administrator and chief medical officer

As part of its ongoing work to identify more effective ways to serve Medicare beneficiaries, the Center for Medicare and Medicaid Innovation in the Centers for Medicare & Medicaid Services (CMS) announced today the Medicare Advantage Value-Based Insurance Design Model, which will test whether providing flexibility to Medicare Advantage plans (including Medicare Advantage-Part D plans) to reduce cost sharing or offer extra benefits available to enrollees with certain conditions will improve the quality of enrollees’ care while also reducing overall costs. Reduced cost sharing or extra benefits are increasingly available in some employer-sponsored plans to enrollees with special health needs, to encourage them to make better and increased use of high-value items and services – those that have the greatest potential to positively impact their health. Medicare Advantage plans generally have not used these “Value-Based Insurance Design” (VBID) approaches because of existing regulations that require uniformity in plan premiums, benefits, and cost-sharing responsibilities for plan enrollees. Under this model, however, CMS will give Medicare Advantage plans that meet selection criteria in a set of states the flexibility to offer VBID benefits – such as extra coverage or reduced cost sharing for high value services – to enrollees with CMS-specified chronic conditions. This new flexibility could support Medicare Advantage plans in helping enrollees improve their health, and subsequently reduce the use of avoidable high-cost care, while reducing costs for plans, beneficiaries, and the Medicare program. The model test will begin January 1, 2017 and run for five years in Arizona, Indiana, Iowa, Massachusetts, Oregon, Pennsylvania, and Tennessee. Eligible plans in these states can have varied plan benefit design for enrollees who fall into certain clinical categories defined by CMS: diabetes, congestive heart failure, chronic obstructive pulmonary disease (COPD), past stroke, hypertension, coronary artery disease, mood disorders, and combinations of these categories. Plans have the flexibility to choose amongst the eligible categories, and design separate interventions for each one. Changes to benefit design made through this model may only reduce cost sharing for services, and/or offer additional services; enrollees will never receive fewer benefits or have to pay higher cost sharing as a result of the model. The Medicare Advantage Value-Based Insurance Design Model fills an immediate need for testing ways to improve care and reduce cost in Medicare Advantage Plans, offering the prospect of lower out-of-pocket costs and premiums for Medicare Advantage enrollees.

New Options for Simple, Quick Enrollment in Medicaid and CHIP

By Vikki Wachino

Medicaid continues to make advances in covering and enrolling eligible low-income people in health insurance coverage.  Our latest data, released today, show that as of June, enrollment in Medicaid and the Children’s Health Insurance Program (CHIP) grew by almost 13.1 million people since just before the first Marketplace open enrollment period in 2013.  And Medicaid and CHIP enrollment increased by more than 292,000 individuals since May. Simplified policies and systems advances that promote timely enrollment of eligible people in coverage underpin this progress.  Today, CMS is taking the next step in those efforts by making new opportunities available for states to help enroll people in Medicaid and CHIP quickly and easily.  Under new guidance released today, we are offering states an opportunity to use Supplemental Nutrition Assistance Program (SNAP) data to support Medicaid eligibility determinations for some people who are certain to be Medicaid eligible at both initial application and renewal.  Under new guidance released today (, we are offering states a new state plan option to use gross income established in Supplemental Nutrition Assistance Program (SNAP) to support Medicaid eligibility determinations for some people who are certain to be Medicaid-eligible at both initial application and renewal.  The new guidance also clarifies and extends the time frame that applies in states that are using or wish to take up targeted enrollment strategies under the waiver authority we established in 2013. The new state plan option builds on targeted enrollment strategies CMS established under waiver authority in 2013 for states to enroll or renew eligibility without requiring individuals to complete a new application or renewal form.  Those strategies, which six states have used to enroll more than 725,000 people, have been used to successfully and efficiently enroll individuals newly eligible for Medicaid coverage and helped states promote rapid enrollment, manage high application volumes, and manage systems constraints.  Tomorrow, as Alaska becomes the 30th state (including DC) to implement Medicaid expansion, it will use some of those strategies to help low-income adults enroll quickly so that they can get needed care. By connecting newly enrolled adults with health care, Medicaid is helping them identify and address health needs and promote their health and well-being. We have been pleased to work with our partners at USDA’s Food and Nutrition Service in strengthening the connection between SNAP and Medicaid so that more low-income families and individuals will have both the nutritional support and the health care they need to build financial security and health.  We welcome additional ideas as we continue to work with states on expanding Medicaid and on simplifying and streamlining enrollment of eligible people in Medicaid and CHIP.  

New Medicaid initiative improves access to substance use disorder treatment

Byline: Vikki Wachino

The Medicaid program plays an important role in providing access to treatment for individuals with a substance use disorder (SUD). Nearly 21 million Americans suffer from SUD, many of whom are low-income or uninsured. It is estimated that 12 percent of all Medicaid beneficiaries ages 18-64 and 15 percent of uninsured individuals who could be eligible for Medicaid coverage have SUD. Medicaid pays one out of every five dollars for SUD treatment.

As states identify new ways to promote stronger systems of care that improve access to affordable quality health care, strengthening approaches to SUD services is a major area of focus. Many states are seeking to reform SUD treatment services in a way that meets the needs of individuals as well as the capacity for treatment in their states.

The Centers for Medicare & Medicaid Services (CMS) is working with states to develop system reforms that improve care, enhance treatment, and offer recovery supports for individuals with SUD. For the past year, CMS has worked with states through our new Medicaid Innovation Accelerator Program to provide program support for states to pursue innovations that reduce costs and improve health outcomes for beneficiaries with SUD. We have also been in active dialogue with states on ways to combat the opioid and heroin epidemic that is ravaging many rural and urban communities alike.

Building upon this effort, CMS is now launching a new demonstration initiative to support comprehensive, evidence based service delivery approaches to SUD treatment. This initiative is available to states seeking to undertake significant improvements in the delivery of care to beneficiaries with SUD, such as better identifying individuals with SUD, increasing treatment provider capacity, using evidence-based practice standards, and measuring progress with quality metrics.

The initiative provides greater flexibility for states that undertake significant reforms to provide coverage for short-term inpatient and residential SUD services – services generally not covered by Medicaid. These improvements will help states develop effective care coordination models that better connect those with SUD to providers, provide more integrated health care services to beneficiaries with SUD, and effectively integrate SUD treatment with community-based care.  

We recognize the importance of effective SUD treatment and remain committed to working with states and stakeholders to improve SUD services for millions of individuals.

For more information on the demonstration initiative, visit

Update on Health Care and the 2014 Tax Season

By Kevin Counihan, the CEO of the health insurance marketplaces

For most Americans, April 15 marked the end of this year’s tax season. For others, including those who have yet to file because they requested an extension, tax season is not yet complete. At CMS we work throughout the year to reach out to consumers and help them understand the ways in which their taxes and health care intersect.

The 2014 tax filing season was the first time people included information about their health insurance when they filed their taxes. For most people – if you had health coverage through your employer or through Medicare, Medicaid, and veterans care – this was as simple as checking a box to indicate that you had coverage for all of 2014. If you couldn’t afford coverage or met other conditions and received an exemption from the requirement to have health insurance, you noted that when you filed your 2014 income taxes.

If you had coverage through the Health Insurance Marketplace and benefitted from advance payments of a tax credit to help make your coverage more affordable, the steps you took were a little different. You should have received a statement in the mail from the Marketplace called a Form 1095-A. This statement included important information you needed to determine the final premium tax credit you were eligible for when you completed and filed your tax return.

We know that most Marketplace consumers who used tax credits filed their taxes, but that there are some consumers who have yet to file because they asked for an extension or were not able to file for some other reason. We also know there are Marketplace consumers who forgot to use the information provided on their Form 1095-A to reconcile their tax credits when they originally filed their federal income taxes for 2014, or were first time tax filers less familiar with the tax filing process. Additionally, we continue to process requests for corrected and reprinted forms as they are received.

If you’re one of these consumers, it’s important for you to know that there is still time, but you need to take action soon. If you do not file a tax return and reconcile the tax credits you received last year, you will lose the opportunity to continue to receive tax credits to help lower the cost of your health insurance when you renew your coverage for 2016.

We know tax credits are important. During our last open enrollment season, 85 percent of Marketplace consumers received an average tax credit of $272 per month, which helped make quality health coverage affordable and accessible for millions of American families. It’s important to us that all Marketplace consumers reconcile the advance payments of the tax credit they received when they file their income taxes so that they’re able to continue receiving the financial support they need to keep their coverage affordable in the future.

If you still need to file your taxes or reconcile the premium tax credit you received, the first step you should take is locating your Form 1095-A. The good news is that if you lost or no longer have the form we mailed you in the spring, you should be able to easily find your Form 1095-A by logging into your Marketplace Account. Visit the website for step-by-step instructions on how to track down the information you need.

The Marketplace Call Center is also a helpful resource. If you can’t find your Form 1095-A online, you should call the Call Center at 1-800-318-2596.

We understand that including information about your health insurance on your taxes and reconciling advance payments of premium tax credits is a new experience for many of you. We are committed to providing the information and support you need to understand the steps you need to take.

Update on SHOP Marketplaces for Small Businesses

Update on SHOP Marketplaces for Small Businesses

By Kevin Counihan, CEO of the Health Insurance Marketplaces

When people think about the Affordable Care Act, they often picture the 10.2 million Americans who now have the health and financial security that come with having access to quality and affordable coverage through the individual Health Insurance Marketplace. What some may forget is that the Affordable Care Act is also helping our nation’s small businesses provide health coverage to their employees.

Prior to the Affordable Care Act, small business owners struggled to keep up with the ever-rising cost of health insurance for themselves and their employees. Historically, small businesses have been charged 10 to 18 percent more for the same benefits compared to large employers, and were often presented with a limited number of choices to offer employees. Small businesses employing women, workers with a high-cost illness or injury, or employees with pre-existing conditions faced even higher insurance rates, making it all the more difficult to provide access to coverage. Meanwhile, larger companies that have hundreds or even thousands of employees benefited from the ability to use their size to get a better deal for their workers.

The Small Business Health Options Program (SHOP) Marketplaces, established under the Affordable Care Act, provide small employers with a new and innovative opportunity to address these concerns, offering them a choice of high-quality health and dental plans for their employees. SHOP Marketplaces offer flexibility, choice, and, in most states, the convenience of online application and account management.

Eligible employers can begin participating in the SHOP Marketplaces at any time during the year, and unlike the individual Marketplaces, are not limited to a single open enrollment period.  Employers with fewer than 25 full-time-equivalent employees may qualify for a Small Business Health Care Tax Credit worth up to 50 percent of their contributions to premium costs. Since 2014, the tax credit has generally been available only for plans purchased through SHOP Marketplaces.

On November 15th, 2014 we launched the portal for 33 states to enroll in SHOP Marketplaces.  As of May 2015, approximately 85,000[1] Americans have 2015 coverage through SHOP Marketplaces with about 10,700 small employers participating in SHOP Marketplaces.  These totals do not include employers that began coverage in 2014 and have not yet renewed their coverage through for 2015.

More than 500 businesses have enrolled each month using since November 2014. Because employers may begin participating in SHOP Marketplaces at any point during the year, additional employers and their employees are expected to enroll each month through the end of 2015.

As with all new products, it will require time to educate businesses about all the features of SHOP Marketplaces. As we continue our outreach efforts to the small business community and continue to work with agents and brokers, we expect that SHOP Marketplace enrollment will continue to increase.

Last fall, we announced new online enrollment capability in the SHOP Marketplace, allowing businesses, on their own or working through their insurance agent or broker, to sign up for coverage using We have also been working with our federal partners to educate small employers about the coverage options and tax credits available through the SHOP Marketplaces through webinars, seminars, and in-person events.  CMS is holding small business roundtable meetings across the country, sending out SHOP Marketplace news, reminders and tips by e-mail through, and working with small business organizations, agents and brokers who understand small businesses’ needs to help boost SHOP Marketplace coverage throughout the country.

We look forward to continuing to meet the needs of small businesses and continuing to provide their employees access to a broad choice of high quality, affordable health care.


[1] As of May 2015, Vermont and Idaho are State-based SHOPs, and have not reported 2015 enrollment data to CMS and are not included in this total.  Included in this total are Minnesota and Utah’s enrollment data, which includes employers and participants in SHOP that had coverage beginning in 2014 and carried over into the 2015 calendar year in addition to 2015 enrollment.  Also included in the total is California’s enrollment data, which includes employers and participants in SHOP that had coverage beginning as of November 2014 and carried over into the 2015 calendar year, in addition to 2015 enrollment.


Meet the New Acting Administrator – First 100 Days, 6 Questions with Andy Slavitt

Earlier this year, Andy Slavitt was named Acting Administrator for the Centers for Medicare & Medicaid Services (CMS). As Acting Administrator, Andy oversees programs that provide access to health care for 140 million Americans, including Medicaid, Medicare, the Children’s Health Insurance Program, and the Health Insurance Marketplace. 

1. You’ve been at CMS 100 days. Tell us about how you’ve spent your time. 

The best way to learn anything is to ask a lot of questions. Over the last 100 days, I’ve met with over 300 CMS employees in Washington, Baltimore, and at regional offices and I’ve talked with many more staff at all our employee meetings. I’ve also conducted well over 100 external constituent meetings. When I meet with people I like to ask: How does CMS need to improve? How does your work contribute to CMS’s mission? What do you want CMS to be known for? As I ask questions, I share a little of my personal philosophy on leading, thoughts about our priorities, and how we should get our work done. I talk about the power of an execution mindset; the importance of keeping the people we serve at the center of our work; the need for us to be good partners, which means being clear, consistent, urgent and foster simplification; and to not just drive change, but support it. Over the last couple of months, I’ve really enjoyed the opportunity to learn more about the Agency. I’ve been close to Medicare and Medicaid my entire career, but there’s nothing like learning from the people who are most invested in the success of these programs.

2. What do you see as the biggest priorities for the agency? 

Our priority is simple – continue to improve our health care system by providing better care, with a smarter payment system that keeps people healthier. The progress that has been made as we stand here at the 50th Anniversary of Medicare and Medicaid and at the 5th anniversary of the passage of the Affordable Care Act is encouraging, but it’s only a start. The opportunities before us are exciting. We are at the center of change—with the opportunity to expand the impact we have as we cover more people in new programs and purchase care differently to reward physicians and hospitals who deliver high-quality care. At CMS, we need to focus on the changing needs of our consumers, on providing access to high quality care, and to delivering on our commitment to do everything we do transparently, with urgency and with accountability. 

3. What are your formative career and health care experiences? How have they prepared you for this job?

Like many people who work in health care, a personal experience was a big shaper of my career. I lost one of my closest friends at a young age and helped his wife deal with the threat of personal bankruptcy in the wake of his death because of the medical expenses he incurred. I learned it was far from uncommon for a young mother with two babies to start her life over in bankruptcy for no other reason than her husband’s illness and that situations like hers happened to countless people every year. I left my job to create a company, HealthAllies, with the goal of helping solve this problem through a consumer web-based service that contracted nationwide for affordable care for the underinsured like my friend’s family. I will never forget the feeling of vulnerability that’s at the center of all of our experiences with the health care system. 

In many ways, everything I experienced in the private sector was preparatory work for my work here at CMS. I’ve been involved in Medicare, Medicaid, Children’s Health Insurance Programs, and the private sector delivery of health care – and the transformation of it – for nearly my entire career. From building primary care practices to developing the largest data and analytics tools and measures to driving innovation by using health care technology and population health.  During these years, I learned that so much of what the federal government does impacts what happens on the ground – to consumers and to physicians. If there’s one thing local communities want from us it’s to simplify things to allow care givers to spend more productive time with patients, keeping them well and keeping them at home.  Leading CMS is an enormous privilege and I am committed to what drove me into health care – to remembering that health care is local and it’s personal. My job and every other CMS employee’s job is to help make the health care system stronger through listening to the needs of consumers and being good supportive partners with the delivery systems, states and other stakeholders.

4. What grounds you in this job?

Today CMS serves 140 million beneficiaries and consumers. I wake-up every day thinking about them. How many are in a hospital, aching to go home? How many are struggling to find good care for an asthmatic child? How many are between jobs and looking for coverage and hoping for something affordable? The fact is: serving close to half the people in the country means the daily needs and circumstances are diverse and profound. That’s why whenever I travel, I visit nursing homes, health centers, and ERs. I ask about the discharge planning. I ask what can be done to simplify their relationship with us. The first thing I do every morning is to read and personally answer emails from beneficiaries and make sure their situations are being followed up on. It’s the single action I can take that lets people know what I think is important. 

The other people that ground my thinking are taxpayers. There’s no doubt I bring a business performance perspective to the job. If beneficiaries are our customers, then in a private sector analogy, taxpayers are our shareholders. American families invest their tax dollars every year to support the Medicare and Medicaid programs; they expect these programs to not only perform well today but to be available for them when and if they need them in the future. 

On any given day, you’re not going to make everyone happy in a job like this. I just need to go to sleep every night feeling like we’ve done the best job possible for the people who count on us the most and will count on us in the future. 

5. What motivated you to join the team at CMS?

I have been working in health care my entire career. As a country, we are transitioning from a time when the action was all about debating policy to a time when the focus needs to be on getting it done and making it work. I believe in the adage that success is 90% about implementation. From overseeing the health insurance exchanges to implementing Accountable Care Organizations and making improvements to the long term health of Medicare, Medicaid or CHIP, I have this vision of CMS as an arm of government that is all about providing access to quality health care to millions of Americans but also getting the job done right. We have a lot of important things to accomplish. If we can bring the speed, the focus, the accountability and the transparency that exists in the best of organizations to the job we’re doing every day at CMS, millions of people benefit. Before I took this job, I don’t think I realized how many good things could get done every day. It’s one reason why I love this job. 

6. Finally, how about something personal. How does your family feel about your taking this new role?

I’m not going to pretend that being away from my wife and my two teenage sons is easy. I fly home to Minnesota every weekend. We’re quite aware that the kids’ time at home is limited and precious. The four of us are extremely close and spend a lot of time laughing together, having serious conversations about the world, and finding ways to support one another. My wife knows what it’s like for people who struggle economically and health wise and she’s one of the smartest and most capable people most people know. Doing public service is something of great importance to both my wife and me and she does everything in her power to make sure I can focus on the important opportunity I have to do the job in front of me.

See also:

Affordable Care Act initiative supports care coordination in rural areas

– By Patrick Conway, M.D., Deputy Administrator for Innovation and Quality and Chief Medical Officer, Centers for Medicare & Medicaid Services

While we have accomplished a lot to make sure Americans have access to good, quality health care, continuing to reform our health care system by increasing quality and lowering costs will need everybody to be a part of the effort.  Part of that will mean continuing important work with health care providers to reform health care delivery, efforts that have already shown promising results, including through Accountable Care Organizations (ACOs).  ACOs are groups of doctors, hospitals, and other health care providers, who come together voluntarily to provide coordinated, high-quality care to their Medicare patients to help them deliver better care at lower cost.  Learn much more about ACOs in our fact sheet out today.

The Centers for Medicare & Medicaid Services (CMS) today announced two modifications to the design of the ACO Investment Model, which will help rural areas and small group practices gain more access to the benefits that ACOs have shown across the country.  These two changes will newly allow ACOs starting in the Medicare Shared Savings Program in 2015 to apply in the upcoming application round, and it will remove the 10,000 or fewer assigned beneficiary eligibility criteria for rural ACOs that started in the Medicare Shared Savings Program in 2015 (or will start in 2016).

These two changes reflect the Innovation Center’s commitment to listening to suggestions and ensuring that demonstrations are widespread, including rural providers and smaller physician groups.

The application for the second round of the ACO Investment Model was made available for viewing on  June 2nd. On July 1st, 2015, the application will open for ACOs that started in the Shared Savings Program in 2014 and 2015 – or are scheduled to start in 2016.

The ACO Investment Model is expected to provide a total of $114 million in upfront investments to up to 75 ACOs across the country. Making payments of shared savings in both upfront and ongoing amounts will help these ACOs invest in care coordination, health information technology, and population health platforms to help shift our health care system from one that provides reactive care to one that provides proactive, preventive care.

Through the CMS Innovation Center, this initiative will provide upfront and ongoing investments in infrastructure and redesigned care process to help eligible ACOs continue to provide higher quality care. This will help increase the number of beneficiaries that can benefit from lower costs and improved health care through Medicare ACOs. CMS will recover these payments through an offset of an ACO’s earned shared savings.

ACOs are one part of the overall effort provided by the Affordable Care Act to help lower costs and improve care and quality. For example, the Affordable Care Act has helped reduce hospital readmissions in Medicare by nearly eight percent between 2012 and 2013 – translating into 150,000 fewer readmissions – and quality improvements have resulted in saving 50,000 lives and $12 billion in health spending from 2010 to 2013.

For more information on the ACO Investment Model, please visit:


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