Are Medicare Advantage star rankings counterproductive?

The Medicare Advantage star rankings system doesn't serve its intended goal of rewarding quality and may even be counterproductive, the American Action Forum (AAF), a policy institute, said in a Tuesday report.

"Rewarding quality health plans is an admirable goal for the Medicare Advantage program," AAF said in the report. "Unfortunately, the current system of linking star ratings to bonus payments and rebate adjustments, which was established under the health reform law, fails to achieve that goal."

The problem, says the conservative think tank, is that evaluation criteria aren't published until after the period for which performance is evaluated. For example, the Centers for Medicare & Medicaid Services measured Medicare Advantage plans in late 2010 and early 2011, published the star ratings in 2012 and will award bonuses to five-star plans in 2013. The delays in rewarding bonuses, however, make it difficult for Medicare Advantage plans to adjust to the CMS criteria, reported The Hill's Healthwatch.

AAF further argues that changes made to the star ranking program could actually reduce plan choice and direct Medicare resources away from low-income areas, according to Investor's Business Daily. "Medicare Advantage is a program that is used disproportionately by low-income and minority seniors," AAF President Douglas Holtz-Eakin said in a statement. "It turns out the plans that low-income seniors choose are not the ones likely to be rewarded by CMS. Over time, we could expect those plans to disappear and, in effect, harm low-income seniors."

AAF isn't the only organization that thinks the star rankings system isn't viable. The Government Accountability Office in March called on CMS to cancel the program, alleging that the "ineffective" program has wasted more than $8 billion, FierceHealthcare previously reported.

To learn more:
- read the American Action Forum report
- read The Hill's Healthwatch article
- see the Investor's Business Daily article