2016 Star Ratings are Working, and the Bar is Rising

The Centers for Medicare & Medicaid Services (CMS) released the 2016 Medicare Advantage (MA) Star Ratings early this year, on Thursday morning.  The usual practice is to wait until Friday after the close.  It was a shift designed to move markets, and the news was mixed. Overall, Star Ratings are working to improve quality in many areas of health plan performance, but insurers and their provider and pharmacy benefit partners are struggling on a similar number of metrics. What is clear is that Star Ratings are now the fulcrum of competition in government health programs — and man, this stuff is hard and getting tougher.

There are clear winners and losers in this release.  There is a “Divine Dozen” of 5-Star-rated plans, including a couple of new arrivals to the 5-Star world. CIGNA traded its 5 Stars in FL (the legacy HealthSpring plan at the legendary Leon Clinic) for its Arizona plan. Sierra (9 states), Tufts (MA), Group Health of MN, and Essence (IL and MO) made it into the Pantheon.  Repeat 5-Star rock stars include Kaiser in 8 states, Martin’s Point (ME and NH and will soon own Medicare in Northern New England), and Gunderson in IA and WI.

The half-dozen “walking dead” — plans scoring below 3 Stars for 3 consecutive years —included Wellcare of LA, Sierra Health, Touchstone, Cuatro, Windsor, and GHS (owned by HCSC).   Three will be terminated by CMS at the end of 2016.

Star Ratings are proving to be tremendously effective in moving markets and forcing industry investments in population health and the member experience and are driving big improvements in Medicare quality.  Roughly half of MA plans (179 contracts) earned 4 Stars or higher for their 2016 overall rating, a nearly 9% increase in a year and the first time a majority scored over 4.  On an enrollment-weighted basis, over 70% of MA enrollees are in contracts with 4+ Stars, a nearly 11% increase year over year.

But below the water line, at the metric level, the news was mixed and cautionary:

• The good news: Average Star Ratings increased for 10 Part C measures and 5 Part D measures. We saw significant improvements in several challenging, longitudinal Health Outcomes Survey (HOS) measures: Improving/Maintaining Mental Health, Monitoring Physical Activity, Part D Appeals Autoforwards, and High Risk Medications. There were smaller improvements on many other measures, where removal of the 4-Star thresholds helped plans improve ratings.
• The bad news: Average Star Ratings DROPPED for 16 Part C measures and 6 Part D measures. We saw significant decreases in several screening measures (colorectal cancer screening, diabetes kidney disease monitoring) and the HOS measure of improving/maintaining physical health.  And there was a big drop on the Medicare Plan Finder (MPF) Price Accuracy measure, where the cut points have gotten so small that 97% accuracy only gets 3 Stars, 99% results in 4 Stars, and it literally takes a perfect 100% to earn 5 Stars.

We knew the removal of the 4-Star thresholds would produce a tremendous amount of fluctuation in the measure cut points, and that’s exactly what happened.  It’s like playing “Pin the Tail on the Donkey” during an earthquake, making it really hard for health plan leaders to predict where their ratings will ultimately land while they still have time to influence them.  For example:

• The average rating on the Diabetic A1c Control measure increased from 3.3 in 2015 to 3.9 in 2016.  But there was no change whatsoever in the average performance rate for this measure — in both 2015 and 2016, the average compliance rate was 76%.  The improvement on this measure can be entirely attributed to CMS relaxing the cut points once the predetermined threshold was removed.
• In contrast, the Controlling Blood Pressure measure rating dropped from 3.7 in 2015 to 3.4 in 2016.  The compliance rate actually increased from 65% in 2015 to 71% in 2016.  This is an example of where the removal of the predetermined thresholds tightened the pressure on this measure — in fact, the 4-Star threshold increased 12% upon removal of the predetermined thresholds.

The Star Ratings data for 2016 pretty much emasculated industry arguments for relaxing metrics for Special Needs Plans (SNPs).  SNPs saw improvement in their quality scores roughly equal to that of HMOs and PPOs: MA plans operating SNPs averaged a 3.61 rating in 2016 (up from 3.47 in 2015), while plans with HMO/PPO-only contracts averaged 3.87 in 2016 (up from 3.79 in 2015).

Non-profit MA plans are pounding for-profits into the sidewalk on quality. About 70% of non-profit MA plans received 4+ Stars vs. 39% of the for-profits. Much of that discrepancy is due to culture. Non-profits tend to be far more focused on the all-important member experience measures and are more collaborative with their provider networks.

Methodological changes by CMS ensure the Star Ratings bar will continue to rise.  2016 is the first year plans with 500-999 members were rated. Only 369 Medicare Advantage Prescription Drug Plans (MA-PDs) were rated in 2016. 188 more plans weren’t rated, but may be in 2017 — and this dilution will warp the bell curve plans are graded on, especially when considering most of those 188 are provider-sponsored, and strong performers will emerge. 4+-Star plans have the most to lose in this environment, and no one can afford to get comfortable.

Some takeaways:

• Stars must be managed as a program and a corporate priority, not as a group of measures.  The effort must be directed by dedicated executive leadership and support.  No plan improves Star Ratings doing it off the side of their desks.
• The removal of the remaining predetermined thresholds means there is no way for plans to “pick and choose” a subset of measures to focus on.  It has to be improvement across the board.
• The bar continues to rise fast among Part C Star Ratings measures.  The “low hanging fruit” has been eaten. Part C Star Ratings success is no longer easily influenced by slick reports provided to physicians. Plans need to help providers execute on gaps in care plans and eliminate barriers to care for the vulnerable. There’s a reason the 5-Star plans are mostly provider-sponsored, vertically integrated, collaborative, and member-centric by nature.
• Star Ratings measures need to be woven into every department’s work streams.  This includes not only quality, care management, health services, and pharmacy, but also risk adjustment, network operations, and compliance.
• Lagging SNPs need to work harder and smarter and assume no CMS help on the measures for the low-income and disabled.  To the contrary, recent draft measures for dual eligibles from the National Quality Forum focus on mental and behavioral health and will prove an enormous challenge.

If you achieved 4+ Stars this year, congratulations, it’s an increasingly impressive accomplishment.  Now get back to work.  There are 178 plans at 3-3.5 Stars who are close on your heels and feeling the urgency.  Now add the 188 unrated plans who will smash the bell curve in 2017.  A 4-Star plan’s equal effort in 2016 only guarantees a score that starts with a 3 the next year.  Keep. Moving. Forward.

If you missed your 4^th Star this year, panic a little, but then get it together. Fast. In a competitive market, you’re circling the toilet bowl but aren’t flushed yet.  You still have time to influence your 2017 Star Ratings and must make improvement the focus of your benefit, formulary, and network designs in the months ahead. You have big decisions to make and must invest time and resources wisely and with a sense of urgency.

Once again, the 2016 Star Ratings prove the world’s biggest experiment in performance-based payment is working and forcing insurer evolution.  And evolution isn’t about size, it’s about continuous adaptation.

Resources

Whether your plan missed the overall 4-Star Rating necessary to earn Quality Bonus Payments, or whether the new 4-Star cut points have introduced new risks of maintaining your overall 4-Star rating, we can help.  Our team of experts understands the Star Ratings program and knows how to influence performance.  Contact us to learn more >>

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