• Dmitry Khodyakov, Christine Buttorff, Kathryn Bouskill, Courtney Armstrong, Sai Ma, Erin Audrey Taylor, and Christine Eibner.
• RAND Corporation, 1776 Main St, Santa Monica, CA 90401. Email: Dmitry_Khodyakov@rand.org.
• Am J Manag Care. 2019 Jul 1; 25 (7): e198-e203.

ObjectivesValue-based insurance design (VBID) lowers cost sharing for high-value healthcare services that are clinically beneficial to patients with certain conditions. In 2017, the Center for Medicare and Medicaid Innovation began a voluntary VBID model test in Medicare Advantage (MA). This article describes insurers' perspectives on the MA VBID model, explores perceived barriers to joining this model, and describes ways to address participation barriers.Study DesignA descriptive, qualitative study.MethodsIn spring/summer 2017, we conducted semistructured interviews with 24 representatives of 10 nonparticipating MA insurers to learn why they did not join the model test. We interviewed 73 representatives of 8 VBID-participating insurers about their participation decisions and implementation experiences. All interview data were analyzed thematically.ResultsFewer than 30% of eligible insurers participated in the first 2 years of the model test. The main barriers to entry were a perceived lack of information on VBID in MA, an expectation of low return on investment, concerns over administrative and information technology (IT) hurdles, and model design parameters. Most VBID participants encountered administrative and IT hurdles but overcame them. CMS made changes to the model parameters to increase the uptake.ConclusionsThe model uptake was low, and implementation challenges and concerns over VBID effectiveness in the Medicare population were important factors in participation decisions. To increase uptake, CMS could consider providing in-kind implementation assistance to model participants. Nonparticipants may want to incorporate lessons learned from current participants, and insurers should engage their IT departments/vendors early on.

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