Consolidated Medicare Advantage Plans See Quality Improvement

CMS Medicare Advantage Star Ratings accurately indicate patient outcomes, a Health Affairs study recently confirmed.

“Higher star ratings have been found to be associated with increased enrollment, better access to higher-quality nursing homes and hospitals, and lower disenrollment among patients with complex health care needs,” the researchers acknowledged. “However, many of the measures in the star ratings are correlated with sociodemographic characteristics and geography. Therefore, the rating of a contract may reflect the composition of its enrollees rather than the quality of its care.”

Researchers also noted that Medicare Advantage plans can consolidate plans in order to raise health plans’ star ratings in a practice known as “crosswalking.”

To better assess how Medicare Advantage Star Ratings reflect quality of care, the study analyzed Medicare Beneficiary Summary Files from 2014 to 2016 and focused on plans that had eliminated plans with lower ratings and migrated the enrollees to a plan with a higher Medicare Advantage star rating. The study also examined changes in enrollees’ behaviors.

Of the 515 contracts in this sample, 42 had been involved in a Medicare Advantage health plan consolidation. Over 1.3 million of the more than 16 million enrollees in the data were in plans that had been part of a consolidation.

For plans that had consolidated, on average there was a 0.7-star increase, as opposed to an average 0.1 star increase for plans that did not consolidate.

The researchers also looked at hospital admissions patterns among consolidated Medicare Advantage plans’ enrollees as opposed to enrollees in non-consolidated Medicare Advantage plans.

Enrollees in consolidated Medicare Advantage plans who were hospitalized were more likely to be admitted to higher-rated hospitals after the consolidation. The researchers interpreted this as indicating that higher-rated health plans may contract with higher-rated hospitals.

“The associations we found between star ratings and network quality are further bolstered by our analysis only of consolidations that occurred within the same state; when a consolidation occurs in the same region, it may be more likely to result in an actual change in networks,” the study added.

However, it was unclear what motivated the shift in quality. The improvement may indicate how essential provide networks are to quality of care. Alternatively, the data could also point to the effectiveness of care management strategies.

Healthcare Effectiveness Data and Information Set (HEDIS) quality measures also increased with consolidations, but that should be expected since star ratings are anchored in HEDIS measures. Thus, if a plan’s HEDIS measure or star rating rises, the other metric should follow suit.

Also, this metric is not entirely reliable since plans report their own quality measures for HEDIS, the researchers argued.

Additionally, more capitated payments and rebates may have propelled the increase in quality of care after health plan consolidation. With these extra funds set aside for member benefits, health plans may be able to improve the quality of their networks and supplemental benefits.

The researchers indicated that there is a lot of federal funding staked on Medicare Advantage plans’ quality of care, largely due to the quality bonus payment program.

Before the Trump administration left office, it enacted changes to the quality bonus payment program as part of its Contract Year 2022 Medicare Advantage and Part D final rule. Those changes will likely be stalled, however, due to the Biden administration’s recent executive order which required a review of the previous administration’s actions.

“Although we found that increased MA star ratings were associated with reductions in disenrollment and switching, as well as improvements in both the use of higher-quality providers and some quality measures, it is important that policy makers weigh these benefits against the costs of running the program,” the researchers concluded.

“Many of the associated improvements we found were small and might not be clinically meaningful. Also, although consolidations may have given enrollees access to higher-quality care, there may be more cost-effective and targeted ways to achieve the same results.”