Dual Eligibles and Star Ratings

Consistent with CMS general strategy to engage in value-based purchasing, Medicare Advantage and stand-alone Part D plans are judged on a Five-Star Rating System which incorporates quality of care and patient satisfaction scores.  The ratings may affect reimbursement or even the ability to continue to offer the plan and are also available to beneficiaries for plan comparisons in buying decisions.  Star ratings can be influenced by many things, including the makeup of a plan’s enrolled population, and the ratings often aren’t adjusted for these factors, which are usually beyond control of the plan.  An Inovalon report examines the effect of a dual eligible population (those enrolled in both Medicaid and Medicare) on Star ratings.  (Inovalon Report)   It builds on an earlier report that had confirmed that dual eligibles cause a lower Star rating for a plan and focuses on why that may be the case, using a database of 2.2 MA members.  The researchers first looked at whether the poorer outcomes might be related to being in a poorly performing plan or to characteristics of the dual eligible members.  The analysis showed that across five of the eight current Star measures, there was no association with the overall quality performance by the plan and that having a higher proportion of dual members did not appear associated.  So the other explanation, that lower Star ratings for dual members is associated with characteristics of those members, was then explored.

Overall, the analyses revealed that 70% of performance differences between dual and non-dual members could be attributed  to differences in clinical, socio-demographic and community resource characteristics.  Socio-demographics alone explained more than 30% of this performance difference.  Looking at hospital readmissions, for example, living in a neighborhood with a high poverty rate could explain 18% of the performance disparity between duals and non-duals and living in a country with a physician shortage, another 12%.  It was consistently clear that these factors, which are not adjusted for or are inadequately adjusted for in the Star measures, are associated with large differences in performance.  The upshot is that plans with large numbers of dual-eligibles are being treated as though they are providing worse quality than they actually are.  Since it is beneficial to have these people in managed care plans, as the care will almost certainly be better than they get in the fee-for-service programs, an unintended consequence is to have the plans avoid this population for fear of driving down Star ratings and reimbursement.  The measure makers, primarily the National Quality Forum, have belatedly recognized the issue and are expressing openness to adjusting the measures.  Not only would this seem fair, but it would be good policy.