Medicare Advantage plan star ratings capture some key indicators of quality and member outcomes, according to a new study.
The research, published in February's issue of Health Affairs, examined 16 million Medicare Advantage members across 515 insurance contracts in 2014 and 2015. It found that people enrolled in plans with higher star ratings saw a 3.4% increase in the use of highly-rated hospitals.
In addition, the study found a 2.6% decrease in 90-day readmissions and a 20.8% decrease in members who either returned to traditional Medicare or switched to another MA plan.
The study team, led by researchers at Brown University and backed by a grant from the Agency for Healthcare Research and Quality (AHRQ), said this is evidence that beneficiaries will "vote with their feet" when choosing a plan.
"CMS provides five-star contracts with additional incentives, including the ability to communicate the higher rating to enrollees and special enrollment periods," the researchers wrote. "These factors also may translate to a greater proportion of enrollees remaining enrolled in higher-rated contracts."
The study said that while further study is warranted, network design is likely one of the main factors in why members in plans with high-ratings sought care and more high-quality providers. Plans with higher star ratings are also likely to have higher-quality provider networks, the researchers said.
The researchers also said that the bonuses associated with higher star ratings may be driving the improvements in outcomes. Medicare Advantage plans must allocate rebates to enhancing benefits, which could lead to better satisfaction and quality, according to the study.
However, they also warned that while the improvements are significant, they may not be especially meaningful clinically and that policymakers should weigh that in how star ratings work moving forward.
"Given that most MA plans receive bonus payments under the current system, there may be opportunities to modify the ratings to further build on the improvements in outcomes that we measured," the researchers said.