Andy Slavitt, the acting administrator of the US Centers for Medicare and Medicaid Services (CMS), told health plans at an America’s Health Insurance Plans (AHIP) conference last week that the agency may change how it calculates Medicare Advantage (MA) star ratings. CMS is considering adjusting how it factors socioeconomic characteristics of beneficiaries into the system. Slavitt said that CMS plans to propose policy changes and request industry feedback later this fall.
CMS research found that health plans that enroll more low-income and disabled individuals score worse on certain measures in the star rating system. CMS conducted similar research in 2014, but found only a small effect on health plans with greater proportions of low-income subsidy (LIS) and dual-eligible enrollees, individuals eligible for both Medicare and Medicaid.
The Medicare Payment Advisory Commission (MedPAC) has also found that plans with more young, disabled enrollees have lower star ratings. To analyze this, MedPAC looked at 19 out of the 42 measures that are not case-mix-adjusted. It found that six of the 19 measures showed differences between low-income enrollees. MedPAC discussed several different strategies to alleviate this, including separately calculating scores for peer groups of plans based on their enrollee population and setting thresholds and performance levels based on population groups.
Background: MA plans receive ratings on a one-to-five star scale. Plans with four stars or higher receive bonus payments. Health plans with three or fewer stars over three consecutive years will be flagged as low performers and can be removed from MA. Many analysts and health plans have said that star ratings should be risk adjusted based on the proportion of low-income subsidy (LIS) or dual-eligible enrollees they enroll because otherwise they are more likely to look like low quality plans and miss out on bonuses.
–Deloite – Health Care Current