As of January 1, 2015, the U.S. Centers for Medicare and Medicaid will only be awarding payments to MA plans that receive 4 stars or higher.
Now that the star ratings program run by the U.S. Centers for Medicare and Medicaid Services (CMS) is a formal program and no longer a demonstration, health plans need to quickly adjust to the program’s new and more stringent requirements.
“In January, CMS will only award payments to plans with ratings of four stars or higher,” says Mike Burgin, vice president and general manager of clinical and quality outcomes at Inovalon, a data analytics company in Bowie, Maryland. “That is likely to have a significant and adverse effect on the financials of any plan that does not meet that threshold.”
This is especially true as continued pressure on Medicare payments reduces plans’ already thin profit margins. “Many plans are profitable or unprofitable based on this bonus,” Burgin says.
NEXT: Getting Better
Maintaining and improving star ratings won’t be easy. The measures for attaining the four-star designation are only getting more difficult.
“For certain measures, raising the bar means higher cut-points, and also greater weights for measures that are no longer in their introductory year,” says Vanessa Pawlak, a senior manager in the healthcare advisory practice at Ernst & Young. “CMS is also making changes based on the lessons the demonstration has provided, such as considering modifications to the methodology for calculating Part D measures and including measures for complex care-for example, within special needs plans.”
To drive better Medicare star ratings in this environment, Pawlak suggests that plans increase integration between medical and pharmacy.
“Some of the highest rated plans over the demonstration period were contracts that had more integrated healthcare benefit designs,” she says.
To enable this type of integration, she recommends leveraging programs or improvement initiatives that have multiple impacts points.
“For example, influencing the medication therapy management program not only helps with managing chronic conditions, where plans have traditionally struggled, but also helps with the member experience, patient safety, drug pricing and so on,” says Pawlak. “The idea is to enable programs and improvement initiatives that simultaneously impact clinical, administrative and operational aspects of the care continuum and the stakeholders within it.”
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From an administrative standpoint, plans must make sure they have the data and technology infrastructure necessary to track and manage performance measures. If plans do not have access-relevant data or have the tools to help analyze that data, monitoring and measuring performance becomes much more difficult.
Citizens Choice, a Medicare Advantage plan in southern California, has developed an alert system to ensure that the plan knows where it stands on each measure on a daily, weekly and monthly basis.
“This way, monitoring performance becomes part of the daily routine and not just a two-month project to meet a number,” says Ken Kim, MD, chief medical officer for Alignment Healthcare in Irvine, California, which recently acquired Citizens Choice. “I would like to know on a daily or weekly basis where I stand with all the measures.”
For example, to improve care management for patients with rheumatoid arthritis, Kim says that the plan needs to know immediately whenever patients are diagnosed to ensure they are on the proper medication and getting the necessary physical therapy.
“If your reports are run months after the diagnosis, the resulting intervention could be too late,” he says. With a daily alert, “it becomes part of the clinical delivery system.”
NEXT: Influencing Outcomes
Health plans cannot improve their star ratings on their own. Many of the measures will depend on the actions of providers and plan members. Therefore, “a strong clinical connection and working relationship with providers is essential,” says Kristen Neal, vice president for Stars Part C & Clinical at Cigna-HealthSpring. This helps the plan keep performance high on clinical measures and provides a clear link to members.
“We emphasize the clinical measures because we have that interaction with the physician,” says Neal. However, a plan’s link to patients is also critical. After all, it’s the patient who has to get that prescription filled and follow the physicians’ directions for their day-to-day care. Having clear ways to maintain communication with members is crucial for follow up and reminders. For example, patients may not be taking their medication or may be experiencing side effects that they do not communicate to their providers.
Some plans have invested heavily in provider liaisons and case managers to support members. This is not limited to large plans. Kim notes that Citizens Choice’s small plan size can be an advantage.
“We can afford to be a little more personal and individualized,” he says. “We have hired a physician liaison who makes in-person visits to doctors’ offices rather than just sending them a bunch of data or making a phone call.”
In many ways, the star-rating program now defines Medicare Advantage plans in the eyes of potential members and other stakeholders.
“The stars are almost like your reputation,” said Kim.
However, the ratings program is not static and the changes taking hold in January are not likely to be the last for the program. Like most areas of healthcare, the star ratings program is likely to continue evolving over time, and plans need to pay attention to those changes.
“The stars program seems like just another small program,” says Pawlak. However, its ratings stand out in the healthcare marketplace that is becoming increasingly focused on quality, outcomes and helping consumers take a more active role in their care.
“It’s only a matter of time before stars spreads to Medicaid, the exchanges and commercial business,” she says.
Joanne Sammer is a freelance writer based in Kansas City, Kansas.