Resolving Health Disparities with the Health Equity Index for Medicare Advantage Plans

Published on .

CMS is upping the ante on resolving health disparities with its latest proposed rule for the Medicare Advantage (MA) Star Ratings system. The proposal, which follows major changes introduced in the 2023 Star Ratings, aims to establish a new Health Equity Index (HEI) for MA plans that serve populations of members with certain defined social risk factors (SRFs).

The HEI will challenge health plans to more closely examine the social risks of their members. Then, they will need to take coordinated, proactive actions to address the social determinants of health (SDOH) that contribute to worsened health outcomes and experiences.

“This is a big deal for MA plans, because the Health Equity Index is poised to replace the existing reward factor,” said Nate Lucena, Senior Consultant at Rex Wallace Consulting, in a recent AdhereHealth webinar.

“The reward factor is the biggest driver of Quality Bonus Payment (QBP) increase—we know there are even some 5-Star plans that only get there because of the reward factor boost.  Changing that equation and shifting the focus even more to health equity is going to really redistribute the playing field among plans that haven’t dug in deep on equity yet.”

To succeed under this new structure, which is slated to begin in calendar year 2024, MA plans will need to deeply understand their socioeconomically vulnerable populations and develop targeted, high-impact interventions to close existing SDOH gaps that impact health equity.

What is the Health Equity Index?

The HEI reward is designed to reduce disparities in MA Part C and Part D for members with SRFs. Initially, CMS is focusing on a limited pool of members with easy-to-identify markers for socioeconomic vulnerability: beneficiaries who receive a low-income subsidy (LIS), those who are dual eligible (DE), and those who are disabled.

The first calculation of the index will be based on two years of data, starting with calendar year 2024 and 2025, even though the reward isn’t being put into place until Stars performance year 2027. The HEI will be calculated from existing Stars measures. The included measures are going to be announced annually.

“That means you have to start right now to understand what’s happening in your data this year and put processes in place so that you’re not caught flat-footed next year,” cautioned Lucena.

Performance buckets will be divided into thirds, he explained. Plans in the top third on a given measure will receive one point. Plans in middle will get zero points, and those in the bottom third will get a score of negative one point. CMS will then aggregate the scores across measures to create a weighted overall score, which will be applied to the Star Ratings calculations. Plans must have a total score greater than zero to qualify for any reward.

CMS states that the index will be designed so as not to penalize small plans with large proportions of vulnerable members or over-reward larger plans with fewer qualifying beneficiaries. The goal is to fairly compare plan performance to one another while adequately adjusting for differences in member burdens and plan capabilities.

Additional health equity provisions to consider

The HEI isn’t the only equity requirement MA plans will need to consider. CMS is also planning to require that plans identify providers who speak languages other than English in their provider directories, as well as include information about physical accessibility of practice locations for people with disabilities in the directory.

In addition, CMS will require organizations to develop and maintain procedures to offer digital health education to members.

“Telehealth and digital literacy are a huge focus for CMS,” noted Lucena. “They understand that a lot of the health equity tools we’re putting into place are not accessible equally across all Medicare populations—and in fact, some of the highest-risk populations have the hardest time accessing digital resources to extend care into non-traditional settings. Digital health education and resources are important for combating that.”

Lastly, plans will be required to incorporate disparity reduction initiatives into their quality improvement programs. Some examples may include efforts to hire more bilingual staff, conducting enhanced community outreach, and developing linguistically and culturally appropriate outreach materials for members.

Leveraging analytics tools for identifying and address barriers to health equity

Scoring highly on the HEI will require plans to zero in on their most challenging populations, including the historically unengaged and the most clinically complex cases.

The first step to success is the ability to granularly identify LIS/DE and disabled members, and the unique factors that affect their daily functioning and engagement with healthcare, including Social Determinants of Health (SDOH) indicators.

“You need a very thorough understanding of these members so that you don’t create interventions that are too broad to be truly effective, particularly for the most marginalized groups,” said Kempton Presley, Chief Analytics Officer at AdhereHealth.

“There is a lot of value in pinpointing populations based on what we know about them and being able to adjust programs to deal with various types of barriers that may exist, not just at the population level, but at the specific cohort and member level.”

“Tools such as the CDC Social Vulnerability Index are a good place to start but may still be too high-level to guide very targeted interventions,” Presley said. Plans will also need to augment their analytics with more detailed proxies for SRFs.

“If you’re able to identify that someone lives in a pharmacy desert, for example, you may be more likely to be prepared to offer transportation benefits or home delivery of medications to address that specific gap,” he said.

To build further on risk stratification capabilities, plans will need to get predictive. “The HEI isn’t going to be static, and neither will your population,” he continued. “Implementing tools that can forecast shifts in the common chronic conditions you’re likely to see and the number of patients likely to qualify for programs like medication therapy management (MTM), you’ll have a better idea of how to model your financials and get ahead of equity gaps.”

The right predictive analytics tools can be a powerful differentiator for plans that are looking to leverage the HEI and other calculations to score highly on Stars.

“With access to data-driven forecasting, plans can start to think more proactively about their performance across their populations,” Presley said. “They can begin to define detailed goals around specific factors, such as reaching their ideal medical loss ratio for their diabetes program or designing new case management initiatives for CHF patients. And they can start to turn MTM into what it’s intended to be, which is a vehicle for changing the trajectory of health—that’s going to be critical when the HEI comes into play.”

“We need to start having these conversations and getting more holistic and preventive with our strategies instead of just checking regulatory boxes. That’s why the HEI is going to be such a game changer for Medicare Advantage, and it’s going to be a significant undertaking for plans to develop the strategies and implement the tools to get them to that very precise view of their vulnerable populations.”

To learn more about how AdhereHealth can help Medicare Advantage plans like yours improve health equity and maximize Star Ratings performance, request a consultation today.