While reporting quality measures to CMS is not a new requirement for many health plans, the increasing value of higher Star Ratings tied to these measures is becoming more apparent in a value-based healthcare system. As the system shifts to enforce the tenants of the Triple Aim—improving health outcomes, improving experience of care, and reducing overall healthcare costs—plans must now focus their interventions on these three components to achieve higher Medicare Star Ratings. By continuing to keep the Triple Aim as a focus and aiming to successfully provide quality healthcare at a lower cost, Medicare Advantage (MA) plans will see a healthier membership base, higher rebates, and quality bonus payments.
Melanie Richey is Verisk Health’s CMS Star Ratings expert. Prior to joining Verisk Health in 2012, she worked as a Quality Director for a Five Star plan in Colorado. She has over 20 years of experience in quality management strategies and regulatory compliance in the managed care and hospital settings. Below, Melanie addresses the top three questions all plans should be asking about Star Ratings:
Question 1: Why are Star Ratings important for health plans?
Star Ratings are important to health plans because they impact MA reimbursement, and as a result, the services that MA plans provide to beneficiaries. Beginning with the 2015 Star Ratings, only 4- and 5- Star plans will receive quality bonus payments. Plans with fewer than 4 stars will see a substantial decrease in payments from what they received under the three-year demonstration project that ended in 2014. It is more critical than ever for MA plans to understand their current star rating performance, develop a targeted plan to achieve their short and long term goals related to star ratings, and implement interventions where the plan can have the biggest impact and return on investment with the limited budget and resources available to them.
Question 2: What types of trends have you seen since the program was started?
CMS has been tracking and publishing MA plan star ratings since 2007, starting with Part D Performance Metrics, and then adding Part C metrics in 2008. The intent of the program was to educate consumers about the quality of care and services provided by the managed care plans in their area so that they could make informed decisions when choosing a plan. Consumers and MA plans didn’t pay much attention to star ratings initially. For consumers, this changed when CMS began imposing enrollment and marketing sanctions on contracts with consistently low Star Ratings and serious compliance issues, limiting the number of contracts available to consumers. For plans, this changed when the ACA tied star ratings to MA rebate rates and provided Quality Bonus payments to plans with 4 or more stars beginning with the 2012 Star Ratings. In addition to this, CMS launched a three-year demonstration project in 2012, which increased Quality Bonus Payments to plans with 4 or more stars, as well as provided bonuses to plans with 3 or 3.5 stars. The intent was to encourage average-rated plans to improve performance and test whether providing scaled bonuses would lead to more rapid and larger year over year quality improvements in MA plans compared to bonuses under the ACA.
CMS made a number of changes to Part C and D ratings in 2012 that limited the ability of plans to compare Star Rating performance to previous years. Therefore, I’ll focus on the trends from 2012 going forward, which have been very positive.
CMS has seen an increase in the number of high performing contracts and the number of beneficiaries enrolled in these contracts. There also has been improvement among plans that received the low performing icon (LPI) with many of the plans that received an LPI in 2014 not receiving one in 2015. Approximately 40 percent of MA-PDs that will be active in 2015 earned 4 or more stars, an 11 percent increase over plans active in 2012 (excluding contracts too new to be measured, didn’t have enough data for reporting, or were terminating at the end of the calendar year). Weighted for enrollment, these 2015 contracts serve nearly 60 percent of MA enrollees, a 31 percent increase over contracts active in 2012. For PDP plans, approximately 51percent of contracts that will be active in 2015 earned 4 or more stars, a 31 percent increase over contracts active in 2012. Weighted for enrollment, these 2015 contracts serve nearly 53 percent of PDP enrollees, a 44 percent increase over contracts active in 2012. A corresponding decrease in MA-PD and PDP contracts with 2.5 stars or less as well as the number of enrollees in these contracts has been seen since 2012. MA-PD contracts with less than 2.5 stars decreased from 16 percent in 2012 to 7 percent in 2015; enrollment in these contracts decreased from approximately 8 percent in 2012 to approximately 2 percent in 2015. A similar trend was seen for PDP contracts with 33 percent of PDP contracts receiving less than 2.5 stars in 2012 compared to 8 percent in 2015; enrollment in these contracts decreased from approximately 23 percent in 2012 to approximately 8 percent in 2015.
Question 3: What will the impact of Star Ratings be on healthcare over the next ten years?
Overall, CMS Star Ratings have moved the value driven model of healthcare forward by focusing on measures to improve the quality of care and services across healthcare settings while reducing costs. Historically, consumers purchased healthcare based on cost and assumed quality was part of the package. Star Ratings has changed this paradigm by making quality data and outcomes more apparent, providing Medicare consumers with information to make healthcare purchasing decisions based on quality outcomes and cost. As noted above, consumers have more plans available to choose from that have higher star ratings, and the consumers moving to them. Ultimately, Star Ratings will weed out low performing plans, many of which have already left the healthcare marketplace. Remaining plans will need to focus on engaging providers and members, as well as invest in services and programs to support achieving and maintaining higher quality outcomes for the populations they serve.
Star Ratings will continue to impact the quality of healthcare provided to Medicare beneficiaries. Additionally, there is an opportunity to focus on health disparities within the Medicare population by assessing the impact of Star Ratings on the dual eligible and Low Income Subsidy populations. An analysis of Star Ratings for plans serving these populations indicates that they under-perform other plans not focused on these populations. CMS is currently conducting analysis and research that demonstrates dual eligible status causes lower MA and Part D quality measure scores. CMS is also looking at research that demonstrates high performance in MA or Part D plans serving dual eligible beneficiaries and how that performance level is achieved.
Another area that will be impacted by Star Ratings is the exchange marketplace. The exchange marketplace is moving down the path of improved transparency of quality data and outcomes with the Quality Rating System (QRS). As with the Medicare Part C and D Star Ratings, the QRS measure set is expected to eventually tie reimbursement to Star Ratings. How this will look is unknown, but many within the industry anticipate that CMS will go down the same path as the Medicare Star Ratings as a way of achieving the goals of the Triple Aim within this population.
Check out how ratings have evolved over the past four years, and where you can find the top rated plans across the U.S., in our new infographic: