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Medicare Advantage Quality Ratings

By September 24, 2010Commentary

CMS rates the quality of Medicare Advantage plans across several dimensions, including quality of care, access to care, responsiveness, beneficiary satisfaction and customer service.  Beginning in 2012, plans with high ratings will get bonus payments.  The data is collected through HEDIS, CAHPS, HOS and CMS administrative data.  The data are scored on a curve to get a star ranking, with five stars being the highest.   A brief from Kaiser looks at the program and how many enrollees are currently enrolled in high-ranking plans.   (Kaiser Brief)

Currently, about a fourth of Medicare enrollees are in plans with four or more stars and nearly half are in plans with 3 or less stars.  The enrollment weighted average for all plans was 3.32 stars in 2010.   The availability of plans with high rankings varies widely across the country and in many regions there are not many options to begin with, much less highly rated ones.  The quality rankings also have significant variability across the nation.    Generally, quality ratings are higher where there is greater Medicare Advantage penetration.  Quality rankings for special needs plans have been difficult to come by.

Especially in the context of generally reduced payments for Medicare Advantage plans starting next year, the bonus payments can be meaningful.  A plan with four or more stars can get bonuses of 1.5% in 2012; 3% in 2013 and 5% in 2014 and later years.  In some counties plans can get double bonuses.  In addition, highly rated plans will get to keep more of any difference between their bids to CMS for coverage and the benchmark cost.  As with many of the CMS quality improvement programs, this one will provide opportunities for vendors to  assist the plans in raising their scores on various measures.  The nature of the curving of the measures doesn’t make sense, however, since it fails to adequately incent and reward all plans that may make significant quality gains or those that have high quality and maintain it.

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