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2016 Medicare Advantage Plan Star Ratings

By October 27, 2015Commentary

The Medicare program has a fee-for-service arm and a private health plan option called Medicare Advantage.  Medicare Advantage has grown rapidly, today covering almost a third of beneficiaries.  In an effort to maximize quality, CMS rates plans on a variety of process of care, outcomes, patient satisfaction, administration, and soon, economic measures; ending up with a composite “Star” score, which can be 5 or below.  Plans with a 4 or higher score get bonus payments and other benefits.  The Star ratings are widely publicized and beneficiaries are encouraged to use them in making Medicare Advantage choices.  CMS recently released the ratings for 2016, which are actually based on 2014 data.  Consultant McKinsey provides us with an analysis of the 2016 results. (McKinsey Analysis)

About 625 Medicare Advantage and Prescription Drug Plans were rated.  The enrollment weighted average across all plans rose from 3.92 to 4.03.  50% of plans were at 4 or higher, compared to 40% for 2015.  Plans with less than a 4 Star rating are giving up $2 billion in potential bonus payments for 2016.  The improvement in overall Star ratings is due to actual performance improvement on the measures, not measure, methodology or cut point changes, although some of those changes were made, they tended to cancel each other out in direction.  PPO plans outperformed HMO-model plans for 2016, a switch from 2015, although the lines between plan types are pretty blurred at this point.  Integrated delivery network plans, which includes most of the Kaiser and Group Health options, as they have in the past, had the highest average Star ratings at 4.45, while the large commercial carrier plans averaged 3.96 and Blues plans 3.86.  Small plans, those with less than 20,000 beneficiary members, had the lowest ratings, 3.45; mid-sized ones, with 20,000 to 100,000 members achieved at 4.12 rating, the best of the categories; while the large plans with over 100,000 members came in at 4.03.  If the Star ratings are truly meaningful in ascertaining health outcomes for beneficiaries, then the steady improvement is a good sign.

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