Summary
Medicare Advantage program offers Medicare beneficiaries the option of enrolling in a private health plan as opposed to the traditional fee-for-service system. The Centers for Medicare and Medicaid Services (CMS) applies a Star Rating system to Medicare plans based on defined quality measures that range from one to five stars. The stars are assigned on a contract rather than an organizational basis. The main source of Medicare Advantage star ratings is performance measure data collected from five different types of research. The Healthcare Effectiveness Data and Information Set (HEDIS), evaluates plans accessibility to members, clinical effectiveness, and resources utilization. Consumer Assessment of Healthcare Providers and Systems (CAHPS) assess a patient’s care experience. Health Outcome Survey (HOS) collects status information from Medicare beneficiaries. CMS administrative data support measures such things as beneficiary disenrollment and complaints volume. Part D measures that were developed by Pharmacy Quality Assurance are included in the rating of Medicare Advantage Prescription Drug Plan.
In previous years, CMS used to communicate predefined thresholds values to plans before the measurement period. However, it was realized that plans have greater levels of improvement without predefined thresholds and as a result eliminated them. Every year CMS uses a document called the “Call Letter” to communicate with Medical plan sponsors regarding considerations for preparing their bids for the following year. CMS also issues an “Enhancement to the Star Ratings” asking for comments on proposed changes to the rating system.
Star ratings also exist for nursing homes, some large physician group facilities, home health agencies and hospitals. However, star ratings for these other systems have not received wide spread acceptance like Medical Aid ratings and Part D plans.
Report on the Article
The rationale for selecting the article was that it discusses the star rating of Medicare Advantage plans and the importance of the rating systems to consumers. Typing the zip code and medication list in the Finder at Medicare.gov presents information that includes a summary of plans rating system and what they measure. It is believed that the use of symbols like stars is valuable to customers in plan and provider selection.
The article also contains key information such as the popularity of Medicare Advantage plans that rose from 28% in 2013 to 30% in 2014. The average rating per contract of a Medicare Advantage plan also increased from 2.56% in 2012 to 3.92% in 2015. In the same year, 40% of Medicare Advantage Prescription Drugs Plans earned four stars or higher, 11 among them having five stars. Of 39 contracts that had received a rating of 2.5 stars or lower, 32 have either improved their rating performance or withdrawn their contracts. A study conducted on the first time Medicare Advantage enrollees showed that a one star increase in the rating of a plan is associated with 9.5% increase in enrollment likelihood (Sprague, 2015).
The Star Rating system is very valuable since it guides consumers in choosing a Medicare Advantage plan system and determines their payments. Steps to discourage low performing plans have been initiated with plans averaging less than the three-star rating for three consecutive years being issued with a non-renewal notice for the following year. On the other hand, plans with high-quality and stable performance get a reward factor applied to their rating that can amount up to 0.4 stars. The Star Rating system also has a direct impact on the amount Medicare pays Medicare Advantage plans meant to cover beneficiaries. Plans with lower than 3.5 stars get a rebate of 50% while those with 4.5 stars or more getting 70% (Sprague, 2015). There is also a Quality Bonus Payment that is mostly 5% paid to plans with four stars or more. Plans with five stars also get the additional benefit of accepting enrollees any time rather than only during the annual open enrollment period.
References
Sprague, L. (2015). The Star Rating System and Medicare Advantage Plans. National Health Policy Forum. Retrieved from https://www.nhpf.org/library/issue-briefs/IB854_StarRatingMAPlans_05-05-15.pdf
