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Opportunity abounds for plans that formulate the right stars strategy to capture bonuses and retain and win members
The U.S. Centers for Medicare and Medicaid Services' (CMS) FIVE-STAR QUALITY RATING SYSTEM has been in place for years, but never have its implications been so important-both for plans to capitalize on opportunities and avoid falling behind. The financial impact of star ratings has been substantial for a while, but with today’s changes, the lack of a smart stars strategy is detrimental to the health of the plan itself.
A great deal is changing. First, as every MEDICARE ADVANTAGE (MA) plan in the country now knows, the CMS “pilot” program to incent improved performance is changing. After rewarding MA plans with “high performance” (defined as three stars or above) for years, CMS is now reducing Quality Bonus Payments, and even eliminating bonus payments, for plans with fewer than four stars. The pilot was one of the biggest changes to Medicare as a result of the Affordable Care Act (ACA), and it’s working: MA plan scores are on the rise. However, the impacts to three and 3.5 star plans are significant-affecting not just profits, but their ability to reinvest in driving the “virtuous cycle of success.” This means:
Below: Watch a video interview with Snezana Mahon, PharmD, senior director of Medicare Solutions For Express Scripts, a pharmacy management benefit organization.
In addition, since star ratings launched, CMS has not forcibly terminated for performance … until now. Starting December 31, 2014 CMS will terminate MA organizations and stand-alone prescription drug plan (PDP) sponsor contracts that fail to achieve three star or better ratings in any Part C or Part D rating, three times in three consecutive years. More than 37 CMS contracts for MA prescription drug and PDP plans are in the cross hairs today-creating significant business issues for those contract holders, but also potentially releasing 1.1 million Medicare members back onto the open market as of January 1, 2015.
Taken together, today’s stars changes mean that, while the path gets rough, opportunity abounds for plans that formulate the right stars strategy to capture bonuses and retain and win members.An ever-changing landscape: More change ahead
While some plans may experience “make or break” performance situations, all plans face perhaps the greatest challenge: keeping up with changing star measures. Even four-plus star plans may feel they are working toward a moving target.
For the upcoming 2015 ratings, CMS added a new Part C measure, made changes to seven of the current measures and retired another Part C measure. These changes mean that even strong plans cannot rest on past performance-ALL plans must adopt a continuous improvement mindset. For example, for 2015, metrics established for flu vaccines and diabetes medication adherence will have a favorable to neutral impact on a plan, while measures related to special needs care management and pharmacotherapy management of chronic obstruction pulmonary disease will be far more challenging.
In 2016, elimination of defined four-star thresholds in favor of a 'clustering' methodology for determining scores means that plans are not just aiming at aggressive metrics, they’re chasing a moving target that works essentially like a bell curve.
Looking across Express Scripts’ Medicare MAPD and PDP business, and across the industry, the high-performing plans are the ones that systematically develop, execute and refine strategies to keep up with changing performance measures. The bedrock of their strategy is data. If building strong stars is a thousand-step journey, know your data is the first one, the last one and quite a few in between.
Because we work with many regional and national plans, we can identify common characteristics among high performing plans:
High performing plans-and those that aspire to be-should use traditional sources (like CAHPS member survey, and ACUMEN) and non-traditional data sources (benefit and drug trend data, and industry studies like the 2014 AGING SURVEY).
From there, the best plans dig deep until they have enough insights around the four key cluster areas that ultimately drive most star ratings metrics: Member experience, member perception, member outcomes and member/provider decisions. For example:
Data should also help you define the most effective and efficient stars improvement strategies. Plans have limited resources, so it’s best to target efforts against moving measures that have the greatest impact to overall ratings and resulting financial reimbursements. Healthcare informatics teams and solutions, such as Express Scripts’ CONSTELLATION RATINGS ADVISOR, can help plans maximize their star ratings performance strategy.
Having both short- and long-term strategies is also important. For instance, back to CAHPs: Let’s say a plan wants to improve these survey responses:
In the short term, the plan might share CAHPs survey results within the organization and better educate service teams about why member experience matters. In the longer term, the plan might consider bigger ticket items such as implementing an employee incentive programs around stars improvement, or implementing social media channels to reach and educate members (and the caregivers supporting them) on simple ways to improve their health.
Once goals are defined, the next challenge is to drive organizational alignment around star ratings. Successful plans will:
The most important steps high-performing plans can take are to remove the silos and incent what matters most to make the organization accountable. For instance, when we conduct star ratings summits with clients, we strongly advocate for having all relevant parties there-including pharmacy and quality but also strategy, customer service, operations, compliance, marketing-even IT and finance.
Ultimately, a star ratings strategy is a Medicare plan management strategy. Actions to improve member perception, experience, outcomes and decisions is cross-functional by nature, so governance structures and incentives must be as well, requiring significant dialogue and alignment. Just think about customer service: Agents can push up your scores in hidden places (e.g. preventative care reminders) or pull them down (e.g. poor member interactions). Everything is a push forward or a step back.
Because this process can be complex, consider the following checklist as a way to help prioritize the direction forward and to chart a winning stars strategy over the next year.
While the updated 2015 October ratings will let you assess where your plan stands today, what’s most important is that you make a game plan to ensure your path forward for both short-term and long-term improvement based on data, and measured each step along the way.