The 2017 Star Ratings: A Contrast Between Macro Versus Micro

The more things change, the more they stay the same. Despite the many, often significant, changes amidst plan-specific 2017 Star Ratings, there is a surprising amount of stability in the 2017 Star Ratings. Stable performance is evident at the macro level:

• The 2017 average Star Rating is 4.00 (down only slightly from 4.03 in 2016).
• Approximately 49% of Medicare Advantage Prescription Drug plans (MA-PDs) earned ≥4 stars in both 2016 and 2017.
• Weighted by enrollment, approximately 68% of MA-PD enrollees are in contracts with ≥4 stars in 2017, down from 71% in 2016.
• The Consumer Assessment of Healthcare Providers and Systems (CAHPS^®) cut points for 7 measures again stagnated in 2017, and national average performance rates (not ratings) for 13 additional measures remain unchanged.

This stable performance seemingly contradicts the generally accepted notion that “quality is improving.” Indeed, a closer analysis of the many micro-level performance changes reveals many changes and fluctuations:

• United delivered perhaps the strongest performance in the 2017 Star Ratings among the largest industry players, showing strong performance improvement across all plans.
• Pending industry mega-mergers eroded Star Ratings performance of the plans being acquired while the acquiring organizations’ Star Ratings survived relatively unscathed.
• Thirty-four plans that earned  ≥4 stars in 2016 dropped below 4 stars in 2016 and will lose their Quality Bonus Payment (QBP) revenues. Eighteen of these 34 plans earned only 1 star on both the Part D Appeals Upheld and Appeals Autoforward measures, mostly, if not entirely, due to audit results. Because many plans rely exclusively on their Pharmacy Benefit Manager (PBM) for these measures, this is an opportune time to reevaluate the Centers for Medicare & Medicaid Services’ (CMS’) somewhat utopic expectation an MA plan has enough contractual and practical leverage to influence its PBM’s operations and performance in a way that prevents audit findings and delivers consistently high Star ratings within the plan’s MA population. Particularly given CMS’ ongoing, transparent acknowledgement that audited plans are disproportionately affected by audit findings, these plans face strong headwinds as they prepare to lose QBPs, even if only temporarily. With long-term PBM contracts already in place, most of the financial impact resulting from these pharmacy audit-related penalties will be felt by beneficiaries and the provider network if CMS does not reconsider its approach to capturing audit results within Star Ratings.
• The uncertainties associated with bell-curved Star Ratings continue to present serious challenges for health plans as they attempt to build sustainable benefits that meet member needs and expectations over the long term.
• Five of the 6 plans receiving the Low Performance Indicator (LPI) in 2016 were not rated in 2017, and 4 of these 5 remain active at present. The long-term future of these plans appears to remain at the mercy of Congress. Despite being slated for termination by CMS due to consistently low Star Ratings performance, a “hospital improvement” bill, which has passed the House and is currently in the Senate, includes a provision to delay CMS’ authority to terminate MA contracts based on poor Star Ratings. It is unclear when Congress will take up this issue, though the bill does have noteworthy bipartisan support. As with many of the important program changes on the horizon for next year, we’ll be watching this issue closely to determine the bill’s ultimate fate and to determine its impact within the parameters of Star Ratings.

So where do we go from here? At a macro level, significant evolution and effort lies ahead to accomplish the Triple Aim foundation of the Star Ratings program. But in order to do so, the micro-view is where we must focus our energy and effort. Successfully improving health, and thus Star Ratings, requires us to carefully decide when, where, how, who, and why to work with micro-targeted groups of members in micro-targeted, person-centered ways.

For questions or inquiries about how Gorman Health Group can support your organization’s Star Ratings efforts, please contact me directly at msmith@ghgadvisors.com.

Resources

New Webinar! The 2017 Star Ratings are out! Join John Gorman, Gorman Health Group’s Founder & Executive Chairman, and colleagues Melissa Smith, our Vice President of Star Ratings, Lisa Erwin, our Senior Consultant of Pharmacy Solutions, and Daniel Weinrieb, our Senior Vice President of Healthcare Analytics & Risk Adjustment Solutions, on Thursday, October 27, from 1-2 pm ET, for a cross-functional review of the 2017 Star Ratings. Register now >>

New Webinar! Each year, billions of dollars are set aside by investment banks and pension managers to invest in measurable social good. Gorman Health Group (GHG) is offering a new capability to connect health plans and providers with social impact investors to obtain capital for clinical innovations of which many plans have only dreamed. Join us on Tuesday, November 1, from 2:30 to 3:30 p.m. ET, to learn how social impact investing can be used to improve health outcomes and Star Ratings and how your organization can benefit. Register now >>

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