skip to Main Content

What is in the Stars: Medicare Advantage Star Ratings Take Leading Role, Part 2

As we discussed yesterday, passage of the health reform bill created a quality bonus system using the CMS ratings. In Part I of this post, we touched upon the quality ratings and bonuses of premium reductions and rebates. Today, we will look at contract renewal and special election periods.

Contract Renewal, Special Election Periods and Quality Ratings

In the recently released draft 2012 Call Letter, CMS indicated that low-quality Part C and Part D plans could face non-renewal of their contracts. For plans with a summary rating of less than three stars for three consecutive years, CMS will terminate contracts following confirmation that the data reflects non-compliance.

CMS also announced that individuals would have a Special Election Period (SEP) to enroll in a five-star quality rating, essentially allowing these plans to continuously market to Medicare eligibles. Medicare beneficiaries are eligible for this SEP only if they are enrolled in a Medicare Advantage (MA) plan with 4.5 or fewer starts or in original Medicare.

Star Struck

It’s no secret that Congress wants to reduce overpayments to MA plans, limit the number of plans in the marketplace and reduce membership in Medicare managed care. Obviously, the biggest drivers of reducing and slowing MA membership growth are the reduction in rates, massive restructuring of the Private Fee-For-Service (PFFS) program and restrictions and changes allowed during election periods. But the focus on quality will also likely have a dramatic impact on the number of plans available and where the membership enrolls.

Congress and CMS are right to demand and reward high-quality care for Medicare beneficiaries and to develop a system where prospective members can make apples-to-apples comparisons of health plans. The quality provisions in the legislation, and regulations and guidance reinforced by CMS, have created a more favorable environment for quality plans by providing higher rates and rebates and a continuous SEP.

But, what about original Medicare? When is CMS going to develop a star rating for itself and allow members to make an apples-to-apples comparison between original Medicare and MA plans? How do beneficiaries decide which plan is best for them if original Medicare is not held to the same quality ratings and standards?

While Congress and CMS have done a great deal to improve the delivery of care to MA members and offer transparency into the care these plans provide, much still needs to be done to bring original Medicare up to those same quality standards. PPACA seeks to begin doing this through various reforms, including Accountable Care Organizations, quality incentives and disincentives, and programs aimed at promoting quality and reducing waste and inefficiency. But these reforms are a long time in the making and success is far from certain.

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.

Back To Top