Don't leave money on the table: Improve your Medicare Advantage quality rating


Dina Overland

Not improving your Medicare Advantage star quality rating is like leaving money on the table and walking away; it just doesn't make sense. I reached that conclusion after speaking with L.E.K. Consulting's Joe Johnson, who laid out a clear explanation of why the Medicare Advantage 5-Star Quality Rating System, in particular, is beneficial for insurers and why improving overall quality care is also worth the time, resources and financial commitment necessary to reap big rewards.

Through its quality ratings, Medicare Advantage pays bonuses to private insurers that receive 3 to 3.5 stars out of 5 on Medicare's rating scale, which includes more than 50 measures from five different rating systems.

By simply improving from a 3-star to 4-star rating, insurers can accrue an additional $50 per member per month, on average.

"There are certainly benefits when it comes to the revenue generation standpoint," Johnson, who is senior manager with L.E.K.'s healthcare services practice, told FierceHealthPayer.

Many health plans have embraced the Medicare Advantage star quality program. "They are making bets and doubling down on efforts internally to support star quality ratings," he said.

But if you think quality improvement is only for Medicare Advantage plans, think again. "We're going to start to see quality take hold in other elements of healthcare delivery" as the entire health insurance industry ramps up its focus on improving quality care, such as the patient-centered medical home or accountable care organization, according to Johnson.

In other words, if you're not already on the quality improvement train, it's time to get aboard.

So how can a health plan improve its Medicare Advantage star rating and its ability to ensure quality care overall? Johnson says the first step is to understand that because Medicare's star rating criteria aren't all created equal, insurers must "identify and target the specific star measures that could contribute in the most meaningful way to their overall scores."

Next, health plans should focus on particular membership and provider segments that would respond to quality improvement campaigns.

For example, an insurer could work toward better prevention of osteoporosis in women with fractures by searching out those members, doctors and hospitals caring for them who aren't living up to the average score compared to other providers within that criteria.

"They will be the members and providers that will benefit the most from mail campaigns or provider engagement campaigns and where you're going to get the most bang for your buck and return on investment (ROI) when you implement quality improvement campaigns," Johnson said.

"The best way to do that is to drill down your membership at a member cohort level," he added, explaining that insurers can rank the order of different opportunities within a certain quality improvement initiative by the potential positive impact of that opportunity.

Some of the "best-in-class" health plans have established enterprise-wide or cross-functional programs to identify the biggest addressable gaps among their member population across different functions. These insurers are "collaborating across member services, care management teams and customer service teams to really take advantage of every individual member touch point and find opportunities to use those touch points as a way to improve their quality improvement initiatives," Johnson said.  

One challenge that many insurers face, however, is obtaining buy-in from senior leadership to allocate necessary resources and investments behind quality improvement programs.

"We're in an early adoption phase of quality improvement campaigns across health plans so there may be some skepticism internally around the returns that can be achieved through quality star ratings or quality improvement campaigns," Johnson said. "But once the ROI is laid out for senior management, it becomes pretty clear that there's money being left on the table and there are, in fact, revenue-generating opportunities to reap."

Now maybe the time to take advantage. --Dina (@HealthPayer)