The Demonstration


Medicare Advantage Value-Based Insurance Design (VBID) Model was developed for CMS to test a broad array of Medicare Advantage (MA) health plan innovations designed to reduce Medicare program expenditures, enhance the quality of care for Medicare beneficiaries, and improve the coordination and efficiency of health care service delivery. The goal is for the VBID Model to contribute to the modernization of MA and test whether these model components improve health outcomes and lower expenditures for MA enrollees.

For plan year 2021, out of the 19 Medicare Advantage Organizations (MAOs), 9 are participating in the Hospice Benefit Component (VBID).  There are 53 plan benefit packages (PBPs) offered by these 9 participating MAOs, which includes coverage in 206 counties throughout the nation.  It is important to remember that even if the MAO that is participating has coverage in your state, they may not be participating in PBPs that cover the entire state.

The VBID Model is set to be in place from January 1, 2021 through December 31, 2024.  There is currently an application process in place for more MAOs to be added to the VBID Model for 2022.


 Six Main Elements of the Demonstration:


  1. Participating plans must provide the full scope of hospice benefits
  2. Palliative Care services
  3. Transitional concurrent care services
  4. Care Transparency for Beneficiaries, Families and Caregivers
  5. Ensuring Beneficiary Access/Network Requirements:

Phase 1:  For CY2021 and 2022, a first-year model participant must offer access to in-network hospices as well as out-of-network hospices, and an enrollee may secure hospice care from any allowed Medicare-certified hospice provider, except to the extent that the provider has been excluded by the plan based on concerns regarding risk of harm to patients.

Phase 2:  For CY2022, plans participating for their second year may have a more formal version of the consultation program, which could include a requirement that enrollees electing hospice have a consultation prior to electing hospice with an out-of-network provider. For enrollees utilizing an out-of- network provider, hospice services must be paid at the traditional Medicare rates, but enrollees must be informed of their ineligibility for hospice supplemental benefits or concurrent care.

Phase 3:  For CY2023 and future years, plans will be permitted to offer a hospice-specific point of service benefit for enrollees, but will be subject to a network adequacy requirement of having at least one Medicare-certified hospice that will provide access to services in the county and provide the full range of covered services. Relative to cost-sharing, plans may not charge higher cost sharing than levels permitted under traditional Medicare (outpatient drugs and biologicals and inpatient respite). No other coinsurance or deductibles may be imposed for hospice services.

6. Payment Requirements: Participating MA plans cannot require prior authorization or implement other utilization management protocols that create inappropriate barriers to care. CMS will allow plans to implement program integrity safeguards in line with the plans policies and procedures. MAOs could implement the following prepayment review policies:

  • Prepayment review strategy to ensure that their out of network hospice providers are providing drugs covered under the hospice benefit as necessary and that the cost of drugs covered under the benefit are not inappropriately shifted to Part D.
  • A prepayment review to address long lengths of stay (for example, greater than 180 days) to assess whether recertification was appropriate.


CMS expects plans to impose timely submission requirements consistent with claims processing requirements under traditional Medicare which includes timely filing of Notices of Election (NOE).  CMS indicated that it would expect late submission of NOEs to be accompanied by payment penalties.

Participating MAOs will be paid a monthly hospice capitation payment for each month that an enrollee is treated in hospice.  For the first month of hospice care, the hospice monthly capitation rate will be adjusted depending on the length of time that a patient is on hospice care.


The most important take-aways from this article:


  • MAOs elect to participate in this demonstration. If your patient is enrolled in a participating MAO the hospice cannot avoid providing care and getting paid by the MAO.
  • Hospices do NOT have to be in-network to receive full payment equivalent to the Original Medicare payments for hospice. However, the patient may not have access to all benefits offered by the MAO if the patient choses an out of network hospice.
  • No prior authorization can be required, but the MAO can require prepayment review of documentation prior to paying claims.
  • When billing for services that were provided to a patient under this demonstration, the agency must bill the MAO and Original Medicare. The NOE timeliness is in effect for the MAO and the hospice will be penalized if the NOE is not timely.
  • In 2022 the MAOs will be allowed to require counseling between the patient and the MAO prior to the patient selecting an out of network hospice.
  • More MAOs will be added for 2022 and forward.

HPS is here to HELP!


As always, HPS tries diligently to keep agencies current with material that will assist in every aspect of providing care and getting paid to do so. If you are an HPS Alliance Member you can view our recent webinar on Medicare Advantage VBID – Update on Medicare Advantage (MA) & Hospice Demonstration. Not a member? Sign up today!

If we can assist you in any way, please don’t hesitate to give us a call or send us an email.