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Star Program Driving Quality in Medicare Advantage

Success in the future of healthcare means paying significant attention to quality measures today. The Centers for Medicare and Medicaid Services (CMS) has developed a robust Medicare program (Star) to raise the quality of care for beneficiaries – setting a precedent for Medicaid and Exchange in the future.

The CMS Star program rewards health plans for delivering high quality care. However, as the program evolves, it will be increasingly hard for health plans to achieve 4- and 5-star status, and even harder for them to maintain it. The financial incentives for high-performing plans (4- and 5-star rating) can be as much as 11% in additional revenue. Because the additional revenue goes right to member benefits, this considerable advantage will make it nearly impossible for plans with less than a 4-star rating to compete with the higher rated plans.

Health plans encounter many challenges in boosting Star scores and many more lie ahead. First of all, CMS will eliminate pre-determined thresholds for Star measures so now all measures will essentially “float” – making it hard to know just where measure thresholds may end up from time to time. CMS’ initial purpose for setting the pre-determined 4-star thresholds was to establish clear expectations about performance. As the program matures, healthy competition and quality innovation will push thresholds higher and higher.

Additionally, the 2016 Star measures include 32 Part C measures and 15 Part D. This means that about a third of the Star rating is tied to the performance of a health plan’s pharmacy benefit manager (PBM). It’s more important than ever to hold the PBM accountable and to be actively involved in Part D measure performance.

About two-thirds of overall measures are CAHPS/HOS and administrative rather than clinical. While weighting still means clinical measure achievement is job one for health plans, CMS is emphasizing member experience more and more in quality rating. This will mean plans will need to emphasize member, and indirectly provider, satisfaction to achieve 4 stars or greater in the future.

The 2016 Call Letter also shows how complex the Star program may become. Today, plans are battling to work with providers to reduce hospital readmissions on members with a set of conditions. The members are known and can be closely tracked. However, in the future, CMS intends to expand this to have plans avoid admissions for hospitalizations for potentially preventable complications. Plans will have to find a greater number of members who may or may not have set foot in a hospital. The measure may “penalize” plans if admission rates are over a given norm for a particular disease state.

So in the emerging value-based world, Star is morphing from a concentration on year-to-year achievement on a set of specific clinical measures to an emphasis on the whole member experience; in doing so, Star will demand keen attention to care coordination and ongoing intervention to close care gaps and promote member satisfaction.

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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