A Majority of Medicare Advantage Beneficiaries Are Enrolled in Plans with Medium to Low Quality as Ranked by the Government

Contact: Lindsey Spindle, 202.207.1337, [email protected]

04.29.10 

Washington, DC -The majority of people in the Medicare Advantage (MA) program are currently not enrolled in the highest-quality plans, despite the existence of a star rating system that assesses quality for MA plans, says a new analysis released by Avalere Health. 

The star rating system is run by the Centers for Medicare and Medicaid Services (CMS), and was put in place as part of an effort to help educate consumers on quality and make quality data more transparent.  Its summary ratings are based on five major domains:  staying healthy via preventive services such as screenings and vaccines; managing chronic conditions; ratings of plan responsiveness and care; complaints, appeals, and voluntary disenrollment; and telephone customer service. 

Avalere analyzed the CMS 2010 Part C Report Card, released in November 2009, and enrollment data released in April 2010 to see whether beneficiaries' plan selections correspond with 5-star quality ratings assigned by the government.  According to Avalere's analysis, 47.2% of MA enrollees are in plans with a ‘3' or below rating, while 38.7% are in plans rated ‘3.5' and up.  Only 0.3% of MA enrollees are in a ‘5' star, or top-rated, plan.  Another 14.1% are unaccounted for, due to a plan being too new to measure or having insufficient data to calculate the contract score. 

Currently star rating scores are assessed and routinely published on CMS's website and Plan Finder, a web tool designed to help beneficiaries select MA plans.  The scores will continue to be published annually.  However, new starting in 2012, plans' payments will be tied to their scores. Plans receiving 4 or more stars will be eligible for quality bonuses of up to 5 percent of local fee-for-service costs when fully phased in; higher-rated plans will also be able to keep a larger percentage of the rebate dollars plans use to reduce beneficiaries' cost sharing and enhance benefits. Together, these incentives may blunt some of the estimated $200 billion in cuts to MA plan payments for the highest-quality plans, and may prompt shifts in enrollment as plan benefit designs become increasingly reliant on their performance. 

"The government clearly intends to use the star rating program more aggressively to reward plans focused on quality and weed out those that are not meeting certain measures," said Bonnie Washington, a vice president at Avalere Health.  "Many plans are likely to be focused on improving their scores as payment becomes increasingly tied to quality.  In the short term, that may mean more attention on dealing with complaints or their customer service.  Long-term, we'll likely see more focus in areas such as outcomes, improving beneficiary experience, and disease management, which may ultimately benefit consumers."

 


Avalere Health is an advisory services company whose core purpose is to create innovative solutions to complex healthcare problems. Based in Washington DC, the firm delivers research, analysis, insight, and strategy for leaders in healthcare business and policy. Avalere's experts span 125 staff drawn from the federal government (e.g., CMS, OMB, CBO, and the Congress), Fortune 500 healthcare companies, top consultancies, and nonprofits. The firm offers deep substance in areas ranging from healthcare coverage and financing to the changing role of evidence in healthcare decision-making. Its focus on strategy is supported by a rigorous, in-house analytic research group that uses public and private data to generate quantitative insight. Through events, publications, and interactive programs, Avalere also translates real-time healthcare developments into actionable information.

Learn more at www.avalerehealth.net.

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