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In the 1860s, Charles Darwin advanced his groundbreaking theory of natural selection. Only the individuals best adapted to a specific environment would be able to survive the struggle for life and find the means to thrive. Those not able to keep up would quickly die out and fade away.
The concept can easily translate to the world of Medicare Advantage, where fierce competition over a finite marketplace is fueling an evolutionary arms race of clinical quality, attractive benefits and innovative marketing.
Unlike the wilds of untamed nature, this environment features rules, regulations and stopgaps. The Centers for Medicare and Medicaid Services (CMS) oversees the “battle for survival” with a strict set of guidelines and feedback mechanisms designed to safeguard beneficiaries and keep plans focused on providing tangible value to members.
The Medicare Advantage Star Ratings are CMS’s most powerful tool for steering the MA market in the right direction by encouraging “survival of the fittest”—and protecting beneficiaries from plans that haven’t shown evidence of delivering quality care. They also impact plans’ abilities to remain competitive. Research shows new enrollees are heavily influenced by plan benefits, as each 1 Star Rating improvement leads to an 8 percent to 12 percent increase in plan enrollment. From an MA plan revenue perspective, improving from 3 Stars to 4 Stars increases revenue between 13.4 percent and 17.6 percent, through increased enrollment revenue and additional bonus payments. Further, CMS also has the right to simply terminate plans that earn less than 3 Stars for three years in a row.
Over the past two years of the COVID-19 pandemic, CMS has provided a cushion for MA plans facing unprecedented circumstances. However, those flexibilities and relaxed rules have come to an end as the nation recovers. MA plans are once again under pressure to continue improving their quality to better serve beneficiaries and remain competitive.
The Urgent Imperative to Clear the 4-Star Threshold
Under the Star Ratings system, MA plans are held accountable to a wide range of quality measures and member experience scores, including measures gauging medication adherence rates, chronic disease care, and access to necessary care.
Higher Star Ratings unlock a number of benefits. Plans that score 4 or more Stars are eligible for a slice of the nearly $10 billion annual Quality Bonus Payments (QBP) pool. 5-Star plans can market their plan all year long (rather than just during the open enrollment period) to help increase their visibility in the market and attract more beneficiaries.
On the other end of the spectrum, plans that score below 3 Stars are subject to penalties and restrictions. In addition to facing a shutdown for sustained underperformance, plans that dip below the 3-Star threshold for even one year will find themselves in trouble.
CMS reserves the right to send a letter to the members of a low-quality plan that is less than 3 Stars, alerting them of the plan’s performance and actively encouraging them to switch to a plan with better scores. CMS even allows these members to make the change outside of the usual enrollment period to avoid any delays.
Impact of the Post-Pandemic Star Ratings System
Plans will also need to keep in mind that earning a 4- or 5-Star Rating one year doesn’t necessarily lead to keeping that rating forever. The Star Ratings system is continuously in flux and designed to challenge plans to keep improving their offerings and service.
The COVID-19 pandemic has shown just how much the Star Ratings can shift in a very short period of time—and just how influential a few rule changes can be. CMS implemented relief provisions during the crisis to prevent plans from slipping down the rankings en masse. As a result, the market experienced “artificial” Stars inflation in 2022 Star Ratings for the 2020 performance year.
Plans that may have benefited from CMS protections during COVID-19 could suddenly find themselves on the wrong side of the bell curve, as more plans may dip below the critical 4-Star threshold if they don’t rise to the occasion.
Without the provisions in place for performance year 2022, there’s likely to be a higher-than-normal number of plans with surprisingly lower scores in the soon-to-be-released 2023 Star Ratings. This translates to significantly less QBP payout and in turn, plans that won’t be able to compete on member benefits.
Action Steps for Improving Star Ratings in a Competitive Environment
To become a “leader of the pack,” achieve or maintain a 4+ Star Rating in upcoming years, avoid plan termination and continue to attract new members, plans will need to focus on improving performance in the measures that carry the most weight in the Star Ratings system: those that are adherence-related. These measures are currently triple-weighted, and cut points are getting harder to reach, as indicated by the recently released plan preview 2.
To remain competitive, plans will need to zoom in on medication adherence as a year-round initiative, with particular focus on high-risk, hard-to-engage members. As this member cohort typically struggles with SDOH barriers to care, providing engagement and support that helps them overcome health inequities is a major component of improvement in adherence and future Star Ratings success. As such, the topic is the focus of AdhereHealth’s upcoming webinar series, with the first event titled “2023 Star Ratings: Analysis of Notable Changes” happening on October 19.
Building a comprehensive, data-driven approach is a crucial strategy. Data is the starting point, as a diagnostic to assess current performance rates and identify members struggling with adherence, plus highlight areas for improvement. It’s important for plans to get a jumpstart now for improvement on 2024 Stars, and lay the foundation for a year-round ongoing adherence initiative.
Advanced data analytics platforms that leverage a member-centric patient relationship management (PRM) architecture help plans navigate targeted members to overcome barriers to care, such as SDOH factors, and this effort drives medication adherence. By offering tailored resources for each member through motivational interviewing, high-risk and unengaged members can be supported on their individual paths toward better outcomes. By embedding data-driven insights into the PRM clinical software workflows, plans can offer a personalized approach to engagement. Using motivational interviewing techniques from clinical professionals to provide a necessary human touch, plans can understand and overcome each individual’s unique barriers to care.
With cut point thresholds for adherence measures getting higher and marketing getting tougher in a world temporarily filled with a flush of newly minted 4- and 5-Star competitors, health plans will need to outperform their peers on adherence-related quality and outcomes in order to survive.
By incorporating technology-driven insights and support with seamless, wrap-around medication adherence services for members, plans can optimize their Star Ratings in an increasingly challenging and rapidly changing Medicare Advantage ecosystem.
Learn more about how your plan’s Star Ratings stack up to the competition and actionable steps you can take for future success by registering for our October 19 webinar, “2023 Star Ratings: Analysis of Notable Changes”.