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MedHOK Strategic Insights Blog

Mixed Star News for Medicare Advantage and Standalone Part D Plans

Marc Ryan | October 14, 2017


star ratings image-1.bmpWith its announcement of Star ratings for the 2018 enrollment season this week, the Centers for Medicare and Medicaid Services (CMS) can continue to be happy about the progress it has made in improving healthcare quality outcomes in the Medicare Advantage (MA) and Part D (PDP) programs. However, the 2018 Star announcement shows that many plans continue to struggle with quality. This is the case not only in terms of achieving 4-Star-or-greater performance but also maintaining those levels. 

Before we get into details, let’s examine the overall positive and negative news coming from Star ratings. We think CMS has done a tremendous job in crafting an incentive plan to drive quality in the managed Medicare program. Because CMS rewards performance, plans have generally taken notice and driven outcomes. And the fact that bonuses go to member benefits and not in the pockets of shareholders, members too have taken notice. We like to benchmark the progress back to 2010, when Medicare Advantage quality was overhauled in the Affordable Care Act (ACA). At that time, just 14 percent of Medicare Advantage Part D (MA-PD) plans had 4-Star-or-greater ratings and just 24percent of all MA enrollees were in such plans. In 2018 44 percent of plans earned four or more Stars and 73 percent of beneficiaries are enrolled in high-quality plans – a record number.

On the flip side, the year-over-year progress we had seen from 2010 – 2016 leveled off in 2017 and continues in 2018. The average MA-PD Star score increased from 4.02 for 2017 to 4.06 for 2018, which is a modest increase, but there are some negative trends. This does not mean that quality is declining in the program, but it may indicate that the trend of higher achievement is tempering somewhat.

  • While a greater percentage of members will be in 4-Star or greater plans (73 percent in 2018 vs. 69 percent in 2017), the total number of 4-Star plus plans will drop from 50 percent of MA-PD plans in 2017 to 44 percent in 2018.
  • The smaller percentage of 4-Star or greater plans is partly due to the fact that the number of MA-PD contracts will increase from 363 in 2017 to 384 in 2018. But the actual number of 4-Star-and-greater plans dropped from 180 in 2017 to 170 in 2018. 
  • There is significant volatility in Star achievement. We analyzed approximately 450 Regional and Local coordinated care plans in the program for changes in Star ratings from 2017 to 2018. These are the popular MA-PD and MA only (no Part D) plans that are Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), Point of Service Plans (POS), and Special Needs Plans (SNPs). Sixty-five plans that were 3-Star or above gained so-called Star power while 88 plans lost Star power. 
  • Once again, there is significant churn in and out of the 5 Star rating. Of the 15 5-Star MA-PD plans in 2018, only 7 were Star achievers in 2015. And, more significantly, following the 30 plus coordinated care plans that dropped below 4 Stars and lost their 5 percent quality bonus from 2016 to 2017, another 38 MA plans will do so going into 2018. 

Star table 1.png 

So, the conclusion is that MA-PD plans as a whole have never been able to get over the 50 percent hump in terms of 4-Star-plus achievement and still have significant challenges maintaining high ratings when they get them. Why? There are two reasons:

  • While health plans can positively move scores from year-to-year, a fair number of them seem unable to lock in the positive performance on certain measures. In short, after a major advance plans’ attention went away.
  • But even more important, Star does not stand still. A reduction in the average Star rating for a given measure may or may not mean major changes in overall performance by a plan. Pre-determined thresholds used to set the Star levels were removed in 2016 and performance thresholds can now “inflate” from year to year, based on overall attainment in measures by all plans. Star measures are essentially on a bell curve, so very high performing plans can move overall measure achievement requirements upward each year. So, even if other plans perform exactly the same on these measures in the prior year, their scores on these measures may slip. And if this occurs with too many measures, the overall rating slips as well. Indeed, that is what happened with the 2018 Stars. While known cut points (attainment percentages for each numeric score in given measures) for most Star measures did not change much, some of them did change significantly, which resulted in many plans that performed the same on these measures receiving a lower rating this year.

This raises the question as to whether some plans have the rigorous infrastructure – in the quality, analytics, care management, and provider relations areas – to maintain higher and higher performance. This is the sole purpose of the Star program designed by CMS. 

What is in store for the future? For plans now challenged with maintaining and building on achievements to ensure no slippage in rating, it will only get worse because CMS is coming out with incredibly complex measures over time. We will begin to see them in 2019 and beyond. Based on the recent Call Letters and Star roadmap announcements, consider the measures that plans will need to perform well on in the future to achieve or maintain high ratings:

  • Perform well on the current readmissions measure by monitoring and coordinating care for people with certain conditions and preventing readmission within 30 days.
  • Closely manage entire populations with certain chronic conditions and keep them from entering a hospital for exacerbation of those conditions.
  • Ensure seamless care transitions post hospitalization.
  • Ensure appropriate follow-up after ER visits or inpatient stays.
  • Adequately assess members post-acute stay and communicate to providers.
  • Notify providers in a timely fashion of IP admission, discharge and follow-up care.
  • Engage in medication reconciliation and medication therapy management.
  • Manage ever-more-complex suites of measures covering physical and mental health conditions.

In short, the future of exemplary Star performance evolves from mobilizing on and remediating discrete measures (although these will still be in play) to daily collaboration across health plan departments and with providers to manage chronic conditions of each and every member.

And if you don’t achieve consistently high ratings you lose a huge marketplace advantage. As we have written often, the financial advantages of achieving 4-Star status are numerous.Plans with 3.5 Stars and higher are allowed to keep more premium dollars (known as the “rebate”), which is passed through to members in terms of better benefits. Plans with 4 and greater Star achievement also get an additional 5 percent premium bonus to pass through to members in benefits. Plus, 5-Star plans get the supreme advantage of marketing to beneficiaries year-round, rather than just for 7 to 9 weeks, for non-dually eligible Medicare enrollees. We estimate that the rebate and quality bonus monies give plans up to an 11 percent benefit advantage in the marketplace. 

The publicity behind the quality program ensures that seniors, who are increasingly savvy, know what plans to enroll in.Thus, the best performers are benefiting while the poor performers are slowly being displaced and run out of the market.

That ends the quick analysis. Please read on if you would like additional details.

2018 STAR Details

Here is how MA-PD plans faired year over year:

  • Plan contracts for MA-PD increased from 363 in 2017 to an expected 384 in 2018.
  • The total number of 4-Star-or-greater MA-PD plans will drop from 180 in 2017 to 170 in 2018.
  • The good news is the number of 5 Star MA-PD plans increased from 14 to 15. However, as we noted last year, there is extreme volatility in 5 Star attainment. 5 MA-PD plans lost their 5 Star rating from 2017 and 6 new plans achieved it. 
  • One MA only (no Part D benefit) plan achieved 5 Star status (and the plan was new as a 5 Star), up from 3 in 2017.
  • The number of 4.5 Star MA-PD plans will decrease from 70 to 57, a huge loss.
  • The number of 4 Star MA-PD plans increased only slightly from 96 to 98.
  • 38 coordinated care plans that earned 4 Stars or greater in 2017 dropped below 4 and will lose their 5 percent quality premium bonuses.
  • A number of the biggest and most prominent plan names that had previously scored high in Star have lost major ground (including plans that lost 5 Star this year and last and others that have dropped within the 4s and even gone below 4 over the past several years). At the same time, other big names saw great improvement from 2017 to 2018.
  • The number of 3.5 Star plans grew by 30 to 139.
  • Those plans with 3 Stars and below increased from 74 to 75.
  • 2 MA-PDs were rated low performing three years in a row (2.5 Stars or below) in 2017. No plans were low performers for 2018. 

PDP achievement:

The PDP Star achievement has been a particularly sore spot for CMS. Results from 2017 to 2018 is relatively flat: average PDP Star scores increased from 3.55 to 3.62, but still is well below 4 Stars. The number of 4-Star-or-greater plans went from 27 to 28, which is about 52 percent of plans (up from 49 percent). Due to LIS auto-enrollment, the number of members in high-achieving plans has always been below 50%. But in 2018, those enrolled in 4 Star or greater plans will increase from just below 41 percent to just above 47 percent. The number of 5 Star PDPs will increase from 6 to 7 in 2018 (and two of the plans are new 5 Star plans), but the number of 4.5 Star drops from 8 to 5.

Part D scores for MA-PD plans still tend to drag down overall MA-PD achievement. MA-PDs dropped in about half of Part D measures from 2017 to 2018, compared with 35% of Part C measures. 

star table 2a.png 

Achievement factors

As with the past many years, there is significant correlation between tenure in the MA or PDP program and Star achievement, although even some new plans are achieving well and quickly. Two plans with less than five years in the program achieved 5 Star, with two more that are between five and 10 years in the program gaining the coveted status. However, 11 plans with 10 or more years achieved the 5 Star rating. 

Seventeen plans with tenure of under five years achieved 4 Star or greater, with 26 between five and 10 years achieving it and 127 with more than 10 years achieving 4 Stars. A similar pattern is seen for PDPs. Like last year, the West Coast, Midwest, and Northeast MA-PD plans tend to have highest quality.

Puerto Rico has been devastated by a hurricane on top of a massive outflow of medical professionals over the past few years.  But it has proven to be the little engine that could. Despite massive reductions in rates in the Affordable Care Act (ACA), Puerto Rico’s MA-PD plans are excelling on quality. Three of the four major plans on the island have 4 plus Star status, with one reaching 4.5 Stars. Amazing performance!

Individual measure scores

The troubling aspect of the Star measure results for 2018 is that there was significant volatility, especially for MA-PDs. There were many positive showings year-over-year in some measures but reduction (sometimes significant) in others. One cause is that that cut points for some measures increased, leading to average drops in these measures. About a dozen of the Part C measures saw significant increases in cut points, while more than half of Part D measures saw significant increases.

There are 48 MA-PD measures, 34 on the Part C side and 14 on the Part D side. Seventeen scores improved, 19 scores fell and 12 stayed steady. Breaking the measures out, for MA-PD plan’s Part C side scores:12 improved, 12 fell, and 10 stayed the same. On the Part D side of MA-PD: 5 improved, 7 fell, and 2 stayed the same.

In the PDP world, there are 14 measures: 5 improved, 7 fell, and 2 stayed steady.

Major measure gainers for MA-PDs:

  • Appeals Auto-Forwarded
  • Appeals Upheld
  • MTM Comprehensive Medication Review increased dramatically from 2.5 to 3.5
  • The Comprehensive Diabetes Measures overall inched toward 4 or went over 4.

The appeals and CMR measures increased despite increases in cut points. On the appeals meaures, tt appears that plans are doing better in terms of meeting CMS compliance and timeliness requirements. 

Major measure losers for MA-PDs:

  • Breast Cancer Screening – after improving a great deal, the measures dropped by a whole Star due to the cut point increasing dramatically. In fact, a plan that scored 5 Star in 2017 would now score 3 Star if measure performance stayed the same. 
  • Controlling Blood Pressure dropped significantly.  Similar to the above measure, a plan that scored 5 Star in 2017 would now score 4 Star if measure performance stayed the same.
  • All three of the medication adherence measures dropped some, in part due to inflation of the cut points.
  • Rheumatoid Arthritis Management dropped significantly, again due to cut point inflation.

Major measure gainers for PDPs:

  • Appeals Auto-Forwarded
  • Appeals Upheld

Major measure losers for PDPs:

  • Members Choosing to Leave the Plan
  • All three of the medication adherence measures dropped some

CMS has to be delighted by the MA-PDs jump in MTM Comprehensive Medication Reviews performance, although completion rates even at 5 Star are still at only 53%. Surprisingly, though, the PDP measure held at just 2.8. This could be because more and more plans are in whole or part bringing MTM in house due to poor outcomes from PBM-based programs.

star table 3a.png

Star Rating, Medicare, CMS, MA Star Bonuses, Medicare Advantage

About The Author

Marc Ryan

Marc S. Ryan serves as MedHOK’s Chief Strategy and Compliance Officer. During his career, Marc has served a number of health plans in executive-level regulatory, compliance, business development, and operations roles. He has launched and operated plans with Medicare, Medicaid, commercial and Exchange lines of business. Marc was the Secretary of Policy and Management and State Budget Director of Connecticut, where he oversaw all aspects of state budgeting and management. In this role, Marc created the state’s Medicaid and SCHIP managed care programs, and oversaw its state employee and retiree health plans. He also created the state’s long-term care continuum program. Marc was nominated by then HHS Secretary Tommy Thompson to serve on a panel of state program experts to advise CMS on aspects of Medicare Part D implementation. He also was nominated by Florida’s Medicaid Secretary to serve on the state’s Medicaid Reform advisory panel. Marc graduated cum laude from the Edmund A. Walsh School of Foreign Service at Georgetown University with a Bachelor of Science in Foreign Service. He received a Master of Public Administration, specializing in local government management and managed healthcare, from the University of New Haven. He was inducted into Sigma Beta Delta, a national honor society for business, management and administration.

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