McKinsey Report on MA Star Ratings

By August 20, 2018 Commentary

CMS created the “star” ratings for Medicare Advantage plans to collect data on supposed quality performance and provide that information to beneficiaries to help them make informed decisions about which plan to enroll in.  In addition, generally the higher the rating, the more a plan may get paid in premiums, as plans with a certain rating get a bonus.  McKinsey & Co. issued a report on star rating trends.   (McKinsey Report)   The star rating scale is one to five stars; plans with 4 stars or more are defined as high performers.  McKinsey finds that since inception of the stars system in 2009, the percent of plans with such ratings has risen significantly, as has performance overall and on the 22 quality measures that have been used since the start of the program.  Between 2011 and 2018, average plan score for MA plans with a drug benefit rose from 3.18 to 4.06, even after considering membership shifts and changes to scoring criteria.  (I am somewhat dubious, not clear that McKinsey adequately took into account the multi-plan insurers habit of combining low-ranking contracts into higher ones, which would obviously raise the score considerably, although they did acknowledge this was a factor.)  The percentage of members in a plan with a rating of 4 or more went from 24% to 73%.  This has some direct benefit to MA enrollees, as plans have to use the extra premium to add benefits or reduce beneficiary premiums or cost-sharing.

Of the 22 individual stars measures that have been used since the start, performance has risen on all but two.  For example, improving or maintaining mental health rose from an average of 3 in 2009 to 3.8 in 2018.  Osteoporosis management in women with a fracture increased from 1.5 to 3.1.  Improving bladder control grew from 2.2 to 3.2.  And perception of getting needed care went from 3.1 to 3.7.  On the other hand, what would seem to be the very important measure of improving or maintaining physical health declined from 3.4 to 2.8 and reducing the risk of falling went from 3.1 to 2.2.  McKinsey’s analysis suggests that MA plans experienced the greatest improvement after CMS began providing the financial incentive for better stars ratings.  The biggest change was in the category of process measures, which are the easiest to influence.  The lowest was in regard to patient experience, which had pretty high ratings from the start so room for improvement was limited.  You would expect strong patient satisfaction since the beneficiaries had to affirmatively enroll and to be satisfied would indicate they made a bad decision.  CMS has raised the scores needed to get 4 stars on a number of measures, but improvement still occurred, which is encouraging.  And McKinsey found that the plans had lowered the cost of providing benefits compared to FFS benchmarks.  Overall, based on this and other research, we can feel pretty comfortable that MA plans are doing a good job for members from a quality perspective, at least compared to FFS Medicare.

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