The Value-Based Insurance Design (VBID) model: Everything to know for year three

September 28, 2022
Categories: Hospice, Palliative care
Reading Time: 4 minutes

By: Rachael Feeback, Revenue Cycle Product Manager, MatrixCare

Beginning on January 1, 2021, through December 2024, CMS is testing the inclusion of the Part A Hospice Benefit within the Medicare Advantage benefits package through the hospice benefit component of the Value-Based Insurance Design (VBID) model. This test allows CMS to assess the impact on care delivery and quality of care, especially for palliative and hospice care, when participating Medicare Advantage (MA) plans are financially responsible for all Parts A and B benefits. This will be the first time the hospice benefit is being tested in Medicare Advantage.

The VBID model is entering its third year in CY 2023, and its growth is projected to double in coming years. In CY 2021, there were nine MA organizations with a total of 53 plans offering the benefit in 206 counties within 13 states and Puerto Rico. Compare that with CY 2022, with now 13 participating MA organizations with a total of 115 plans offering the benefit in 461 counties in 21 states and Puerto Rico.

This is a significant shift in the way hospice agencies will bill and be paid. Here, we’ll explain the importance of the NOE electronic transaction standard and how providers will be impacted by these changes.

Relating to benefit coverage, this model:

  • Maintains the full scope of the current hospice benefit (Part A)
  • Through Part B benefits with providers who are contracted as in-network:
    • Focuses on improved access to palliative care
    • Enables transitional, concurrent care for enrollees
    • Introduces additional hospice-specific supplemental benefits

How to participate in the VBID model

Medicare Advantage organizations offering eligible MA plans in all states, DC, and territories can apply to participate. MA plans must permit access to all Medicare-certified hospice providers and are paid a monthly capitation amount.

Hospice providers servicing beneficiaries within an area where a VBID is being offered by an MA can contract in-network with the MA organization to provide additional Part B benefits in addition to Part A. Out-of-network providers can only provide original Medicare hospice Part A services and MA plans must pay at least original Medicare rates for out-of-network hospice care.

Beneficiary enrollment in a VBID plan when offered in the beneficiary area is voluntary, and when enrolled, will choose either an in-network or out-of-network provider. Enrollees of participating plans can choose any Medicare-certified hospice provider they want (including those outside their plan’s service area). Also, the VBID benefit remains with the enrollee if they move out of the area.

Factors to consider for the VBID model

Should a VBID plan be offered in your area, know who is participating.

  • The benefit is only offered within specific counties and states, so be sure to understand the plans unique to your area.
  • Just because an MA plan that is part of a large national MA organization participates in the hospice benefit component of the VBID model does not mean that all of the MA plans for that MA organization are participating.
  • If a hospice does not service patients in an MA plan service area, there should be little to no impact to the hospice from this model.

VBID plan enrollees have the right to choose MA plan out-of-network hospice providers that are not in the plan service area.

  • Always conduct eligibility checks to determine if the patient is enrolled in an MA VBID plan, which is in addition to Medicare Part A eligibility checks.
  • Prior authorization requirements are not permitted under the model for hospice-related care, but the VBID plan might have other specific notification requirements.
  • How you will bill depends on whether you have a contract with the participating MA plan. With a contract or in-network, just follow the agreed upon terms for billing and payment. Without a contract, also known as out of network, bill the participating plan the same way you bill your Medicare Administrative Contractor (MAC) for hospice care.
  • Out-of-network providers can only provide original Medicare hospice Part A services and MA plans must pay at least original Medicare rates.
  • The use of electronic NOE transactions for both Medicare and MA organizations are encouraged. However, MA organizations may require the use of other tools for submission as well.

Expect new VBID requirements for CY 2023.

  • CMS will require each applicant for the hospice benefit component to provide a detailed strategy for advancing health equity.
  • CMS is using an updated two-phase structure for network adequacy, rather than the prior three-phase approach.

The 2-phase groupings for network adequacy

Phase 1 This group includes plan benefit participants in their first year of participation, in a service area the MA organization has not participated in under the model component.

Phase 2 This group includes plan participants that will enter their second or third year of participation in a service area the MA organization has participated in under the model component. These phase-two participants will need to meet two model-specific requirements:

  1. Create and maintain a network of hospice providers so that enrollees in each county of an MA plan’s service area(s) have access to a minimum number of network hospice providers.
  2. Describe their comprehensive strategy for forming a network of hospice providers to ensure that enrollees receive a set of timely, comprehensive, and high-quality services aligned with enrollee preferences in a culturally sensitive and equitable fashion.

This evolving VBID model can be difficult for organizations to keep up with—especially with so much changing regulation. Schedule a demo with MatrixCare to see how we can help you navigate compliance with ease through innovative technology.


Racheal Feeback
Racheal Feeback

Rachael Feeback is a Revenue Cycle Product Manager with 19+ years of experience in accounting. For the last 13 years, Rachael has specialized in EMR healthcare technology and services, implementing processes improvements for enterprise-level home health and hospices. Rachael has deep experience leading high-profile clients with compassion.


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