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Medicare Advantage Stars Program

By February 28, 2011Commentary

The Medicare program is largely fee-for-service, but a significant enrollment exists in the health plan variant known as Medicare Advantage.  Democrats have sought to make those plans less attractive and would probably like to do away with the program, but it is popular with many seniors and Republicans like its private market orientation.  Starting in 2012, Medicare Advantage programs will be able to receive rebates and bonuses bases on their overall quality rating under CMS’ STARs initiative.  This rates the plans on a 1 to 5 stars scale, looking at various quality and enrollee satisfaction measures.  A Kaiser brief covers the current status and upcoming changes in the program and looks at current ratings.  (KFF Brief)

The purpose of the system is to provide incentives for the plans to improve quality of care and service.  The higher the rating, the greater the rebates and bonuses a plan can achieve and CMS is proposing a demonstration for 2012 that will make the potential rewards even bigger.  CMS also intends to flag low-performing plans so that beneficiaries can be forewarned before signing up or staying in these plans.  Only 24% of enrollees are currently in plans with a rating of 4 or more, 60% are in plans with average ratings of 3 to 3.5.  Only three out of 523 MA plans have a 5 rating and 74 got a rating of 4 or 4.5.  Average ratings have increased in the last couple of years.

Among large players, Kaiser had an average rating of 4.53, Aetna 3.3, UnitedHealth 3.17, Humana 3.06, WellPoint 3.05.  Higher ratings were associated with non-profit status, longer time in the program, HMO versus PPO design, urban versus rural plans, high MA penetration in the market, higher income areas and more MA competition in the market.   Hopefully someone is doing the research to see if what CMS is measuring in STARS is actually correlated with better health outcomes for beneficiaries.

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