Medicare Advantage, Drug Plans: Achieving, Maintaining a Five Star Rating

By Anil Kottoor, president and CEO MedHOK

For Medicare Advantage and prescription drug plans, the pressure is on to improve quality or miss out on incentives under the Centers for Medicare & Medicaid Services (CMS). Specifically, under the agency's Five Star Quality Rating System, plans that achieve and maintain a rating of 4.5 or above will have the opportunity to enroll beneficiaries throughout the 2013 plan year under a newly created special election period.

Already, 127 Medicare Advantage plans and 26 Medicare Advantage Prescription Drug and Prescription Drug plans have achieved four- or five-star ratings for the 2013 plan year. In addition to year-round enrollment, these high-performing plans receive additional marketing privileges and payment bonuses of up to 5 percent in additional reimbursements and 10 percent in certain “double bonus” counties.

For those plans that fail to live up to quality expectations, CMS is wielding a rather large stick. Specifically, CMS will discourage enrollment in those plans rated at three stars or less. Those beneficiaries enrolled in low-ranked plans will also be given the opportunity to switch to a higher-quality plan if they so choose.

Over the next three years, CMS is also reducing the amount plans can keep under cost-sharing or for providing expanded member benefits, with the new percentage now tied to their star rating. Ultimately those with three or fewer stars will be allowed to retain only 50 percent of the difference between their base bid and benchmark. Plans with 3.5 or four stars will be allowed to keep 60 percent and those with 4.5 and five stars will be allowed to keep 70 percent. Further, CMS will terminate contracts with plans that earn a summary rating of less than three stars for three consecutive years, once non-compliance has been confirmed.

Achieving a Five Star Rating
This new carrot-and-stick approach from CMS ups the ante for Medicare plans that wish to remain competitive. Success requires meeting or exceeding performance standards in a number of categories set forth by CMS.

For Medicare Advantage health plans, performance standards are based on 50 measures in five different categories, focusing primarily on coverage and customer service. Categories include:
1.    Preventive screenings, tests and vaccines
2.    Management of chronic (long-term) conditions
3.    Plan responsiveness and care
4.    Member complaints, problems getting services, and choosing to leave the plan
5.    Customer service

Medicare drug plans are rated on their performance in four categories:
1.    Customer service
2.    Member complaints, problems getting service, and choosing to leave the plan
3.    Member experience
4.    Drug pricing and patient safety

Performance is assessed and an overall rating is determined that summarizes all categories and measures into a single “star” rating. A classification of five stars indicates that the plan’s overall performance is excellent. A four star rating is above average, three stars is average, two stars is below average and one star designates the plan as a poor performer.   

Poor performance in just one category could significantly impact plan’s opportunity to take advantage of incentives available to those plans designated as a 4.5 star performer or above. That is why it is imperative that Medicare Advantage plans take the steps necessary to monitor and track performance in each of these key areas. To do so most efficiently, many plans are turning to software that identifies deficiencies and opportunities for improvement on a year-round basis.

Maintaining a Five Star Rating
By deploying integrated actionable healthcare solutions that monitor and track quality data—such as HEDIS®, pay-for-performance (P4P), proprietary quality and performance measures and event patient/provider/population profiling—in real-time, Medicare plans will be armed with the information they need to achieve and maintain a  five star quality rating.  

These solutions connect disparate data sources and seamlessly integrate information such as quality measures, administrative data, performance metrics and care management data to create patient-centric, actionable information. This information is shared with all participants in the healthcare continuum, giving providers a clear understanding of the quality and utilization metrics, individual performance in relation to those metrics and the relationship between outcomes and payments.

By connecting and presenting this information in a meaningful way, Medicare plans can identify and close gaps in care and pinpoint areas that may need improvement on a year-round basis. Further, information on current star scores is provided based on the state, contract number or product, to be measured against target numbers, with the status of each measure and progress toward goals displayed.

By deploying these comprehensive solutions, Medicare plans will ensure that any oversights or performance issues can be assessed and corrected before they affect the plan’s star rating and jeopardize their chances to receive incentives under the Star Quality Rating Program.

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