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2016 Star Announcement Shows CMS’ Continued and Remarkable Progress With Quality Performance

2016 Star Announcement Shows CMS’ Continued And Remarkable Progress With Quality Performance

In past blogs, we noted the phenomenal progress the Centers for Medicare and Medicaid Services (CMS) has been making in the Medicare Star program. Last week’s announcement of 2016 Star ratings simply adds to this tremendous success and further disproves the critics, who once declared that the aggressive plan could bring the private Medicare plan system to its knees.

For 2015, CMS rated about 40% of plans with 4 or 5 Star ratings and 60% of beneficiaries were enrolled in these plans. CMS announced that for 2016, 49% of Medicare Advantage-Part D (MA-PD) plans would now be rated 4 or greater. More importantly, about 71% of enrollees are expected to be in such plans. The most startling statistic is that this is up from just 14% of plans and 24% of enrollees before major reforms began in 2010.

The average Star rating has steadily increased too, from 3.71% in 2013 to 4.03% in 2016. Still this achievement is mixed, with about half of all plans failing to obtain the 4 Star threshold and six plans are eligible for termination due to low performance. Most of the progress has been with 3.5 Star plans moving into the 4 Star category.

Showing that high performance is becoming more complex, there were 11 5 Star MA-PDs last year and 12 this year; but only about half of the plans maintained their 5 Star status, with some newcomers getting the best rating for 2016.

Four and 5 Star achievement tends to be linked to several factors. A majority of 5 Star plans continue to be plans associated with integrated delivery systems (IDS), but IPA-network plans are starting to make inroads. Tenure of contract and tax/profit status also play a factor. Higher-achieving plans also tend to be grouped on the West Coast, Midwest, and Northeast.

One blemish on CMS’ record and progress is that standalone Part D (PDP) plans as well as overall Part D Star performance for MA-PDs is problematic. The actual average Star rating for PDPs will drop from 3.75 in 2015 to 3.40 in 2016. Just 41% of PDP plans have achieved at least 4 Star status and just 32% of standalone Part D members are in such plans.

In looking at the Part D measures versus Part C measures, Part D measure achievement is noticeably lower for MA-PD plans. Again, the average MA-PD score is just over 4; however, Part D measures perform well below 4. Eight of 15 Part D measures are below 4, with 5 of them at 3.5 or below.

Plans are concerned that some Pharmacy Benefit Managers (PBMs) are paying too little attention to the Star measures as well as compliance duties related to authorizations, appeals, grievances, and formulary management. This has led to in-sourcing of certain functions by plans, or at the very least, much more aggressive oversight of the delegated functions. Interestingly, MA-PD outcomes tend to be much better than the same measures for standalone PDPs.

On the new Medication Therapy Management (MTM) Comprehensive Medication Reconciliation measure, plans overall scored just 2.3. MTM has been a major focus of reform for CMS, although it recently backed off of major changes. But CMS will look to see significant improvement in this measure over time.

One explanation for the lower Part D achievement is that one measure, Diabetes Treatment, was retired, while three measures were included that were not used in the prior year. Further, it is also important to note that reductions in any Star measure does not always signify a true reduction in performance as pre-determined Star thresholds were removed for the 2016 Star Ratings. The thresholds moved and are no longer arbitrarily set at a given performance level.

The financial advantages of achieving 4 Star status are numerous. Plans with 3.5 Stars and higher are allowed to keep more premium (known as the “rebate”) that is passed through to members in terms of better benefits. Plans with 4 and greater Star achievement also get an additional 5% premium bonus to pass through to members in benefits. Plus, 5 Star plans get the supreme advantage of marketing to beneficiaries year-round, rather than just for 7 to 9 weeks for non dually eligible Medicare enrollees. CMS’ craftily-developed structure should continue to push the boundaries of quality in the future.

Marc Ryan

Marc S. Ryan serves as MedHOK’s Chief Strategy and Compliance Officer. During his career, Marc has served a number of health plans in executive-level regulatory, compliance, business development, and operations roles. He has launched and operated plans with Medicare, Medicaid, Commercial and Exchange lines of business. Marc was the Secretary of Policy and Management and State Budget Director of Connecticut, where he oversaw all aspects of state budgeting and management. In this role, Marc created the state’s Medicaid and SCHIP managed care programs and oversaw its state employee and retiree health plans. He also created the state’s long-term care continuum program. Marc was nominated by then HHS Secretary Tommy Thompson to serve on a panel of state program experts to advise CMS on aspects of Medicare Part D implementation. He also was nominated by Florida’s Medicaid Secretary to serve on the state’s Medicaid Reform advisory panel.

Marc graduated cum laude from the Edmund A. Walsh School of Foreign Service at Georgetown University with a Bachelor of Science in Foreign Service. He received a Master of Public Administration, specializing in local government management and managed healthcare, from the University of New Haven. He was inducted into Sigma Beta Delta, a national honor society for business, management, and administration.

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