How COVID-19 Policies May Affect Medicare Advantage Star Ratings

As the coronavirus pandemic continues to rage across the US, the payer industry must consider how the current environment will affect Medicare Advantage Star Ratings for years to come. The industry may need to adapt their engagement strategies around public policies, Avalere explained in a recent analysis.

The analysis unpacked the policies that are reshaping Medicare Advantage Star Ratings during the coronavirus pandemic and glanced into the long-ranging effects that these policies could have.

CMS has taken two major actions to try to counteract the long-ranging effects that the coronavirus pandemic could have on the Medicare Advantage Star Ratings Program.

The agency released its Contract Year 2021 Medicare Advantage and Part D Final Rule, which not only addressed the Medicare Advantage Star Ratings system but also controversially expanded end stage renal disease eligibility and expanded telehealth and rural health plan options.

The rule changed star rating cut points. It also shifted greater emphasis to patient experience and complaints along with adding more significance to access measures.

More recently through the Interim Final Rule, CMS took its second step in reforming star ratings to account for the effects of the coronavirus pandemic.

“The IFR suspends reporting requirements for Star Ratings in 2020, allowing the CMS to continue to use their 2020 scores,” explained experts from Avalere in a recent analysis. “Notably, a suspension in MA Star Ratings data could impact the market for several years as measurement data is collected 2 years in advance of Star Ratings being released.”

On top of these CMS actions, the Medicare Payment Advisory Commission (MedPAC) Medicare Advantage value incentive program proposal could also have far-ranging impacts.

MedPAC has been pushing this proposal since long before the coronavirus pandemic. In June 2019, the commission recommended replacing the Medicare Advantage quality bonus program with the value incentive program, a plea which it reiterated in its June 2020 report.

In its 2020 report, MedPAC argued that the quality bonus program does not satisfy MedPAC’s principles for a quality incentive program. The Medicare Advantage value incentive program, on the other hand, incorporates five key features.

First, the value incentive program would not overly emphasize beneficiary experience, but rather it incorporates population-based measures to assess patient outcomes. Furthermore, the set of measures would need to be reduced, MedPAC stated.

Second, MedPAC suggested analyzing performance on the basis of the local Medicare Advantage market.

Third, the value incentive program contextualizes patient data by implementing peer-grouping. This method incorporates social risk factors, for example factors that may particularly influence fully dual-eligible beneficiaries. The commission suggested that by comparing similar groups of beneficiaries, the scores would both account for plan performance differences and social risk.

Fourth, plans should receive funding for quality improvement, not just for hitting above a certain benchmark. This would help save plans from experiencing a “cliff” whereby they suddenly lose extra funding after not hitting a specific benchmark. Instead, improved performance should improve points and, as a result, rewards.

Finally, MedPAC recommended that the funds accrued from plan payments should be distributed at the local market level in rewards and penalties based on each plan’s performance compared to its competitors.

Aiming for budget-neutral quality bonuses would affect all Medicare Advantage plans and could have negative impacts.

“Plans with 4 stars or higher that receive an increase in their benchmarks could be at risk for losing part or all of their payment ‘bonus,’” the Avalere experts warned.

Additionally, these impacts go beyond simply the star rating to also affect plans’ enrollment, premiums, and supplemental benefits.

Other factors that could influence the level of impact include how many enrollees are low-income or disabled, the plan’s own local market, and how the plan performs on a population health level, as opposed to specific conditions or processes.

“Stakeholders can anticipate that these proposed changes may move separately and can develop customized engagement strategies with the CMS and Congress around certain components,” the Avalere experts projected.