For Medicare Advantage (MA or Part C), CMS operates the Star Rating System. This system provides a relative quality score to Medicare Advantage Organizations (MAOs) on a 5-star scale based on their plans’ performance on selected criteria, and is now used to determine whether or not an MAO will receive bonus payments and/or rebates for their enrollees.
What is Medicare 5 star rating system?
The Centers for Medicare & Medicaid Services (CMS) publishes the Medicare Advantage (Medicare Part C) and Medicare Part D Star Ratings each year to measure the quality of health and drug services received by consumers enrolled in Medicare Advantage (MA) and Prescription Drug Plans (PDPs or Part D plans).
Why are Medicare star ratings important?
Jul 31, 2018 · Star Ratings are calculated at the contract level and apply to all plans that fall under the contract, regardless of quality differences between the individual plans. A plan that gets consolidated into an existing contract receives a Star Rating and quality bonus based on the score of the existing contract, even if its own score had been lower.
What do Medicare star ratings mean?
Medicare Advantage star ratings: Basics and best practices 3 NOVEMBER 2017 Star ratings affect Part C revenue for MA-PDs in two ways: 1. Quality bonus payment (QBP): Plans receiving a QBP have their MA benchmark amounts increased by the QBP percentage, as determined by their overall star ratings. A higher MA benchmark amount means that the plan can
What is the best Medicare plan?
Mar 24, 2022 · For Medicare Advantage (MA or Part C), CMS operates the Star Rating System. This system provides a relative quality score to Medicare Advantage Organizations (MAOs) on a 5-star scale based on their plans’ performance on selected criteria, and is now used to determine whether or not an MAO will receive bonus payments and/or rebates for their enrollees.
How are Medicare star ratings calculated?
Plans are rated on a one-to-five scale, with one star representing poor performance and five stars representing excellent performance. Star Ratings are released annually and reflect the experiences of people enrolled in Medicare Advantage and Part D prescription drug plans.Oct 8, 2021
What are Medicare Advantage star ratings based on?
Medicare uses information from member satisfaction surveys, plans, and health care providers to give overall performance star ratings to plans. A plan can get a rating between 1 and 5 stars. A 5-star rating is considered excellent. These ratings help you compare plans based on quality and performance.
How do I increase my star rating for Medicare Advantage?
7 Ways to Improve Your Star RatingEnsure Medication Benefits Are Central to the Consumer Onboarding Experience. ... Develop Targeted Outreach Programs Around Medication Adherence and Preventive Screening. ... Make Every Interaction Count. ... Be Proactive with Consumer Feedback. ... Communicate Consistently and in Different Channels.More items...•Nov 20, 2020
How many star measures are there?
Of the more than 40 measures used to determine a health plan's Star Rating, the measures we have listed below can have the greatest impact on Independence's Star Ratings during measurement year 2017.
Who sets the standards for Medicare star ratings?
The Centers for Medicare & Medicaid Services (CMS) publishes the Medicare Part C and D Star Ratings each year to measure the quality of health and drug services received by beneficiaries enrolled in Medicare Advantage (MA) and Prescription Drug Plans (PDPs or Part D plans).Oct 13, 2020
How do star ratings affect reimbursement?
Plans that are rated 3.5 stars or less are paid a base rate based on the county in which it enrolls beneficiaries. However, if the plan increases the rating to 4 stars or more, the plan is paid a 5 percent bonus in addition to the base rate.
What are CMS Medicare star ratings based on?
Medicare star ratings are calculated using 40 criteria across Part C and Part D coverage. This includes survey data about member satisfaction, calc...
What does a CMS 5-star rating mean?
A 5-star Medicare plan has earned the best-possible rating for quality and performance. If a 5-star plan is available in your area, you can switch...
What is the highest rating for a Medicare Advantage plan?
A 5-star Medicare Advantage plan has the highest possible rating. Plans are ranked on a scale of 1 star to 5 stars. Only 16% of contracts have achi...
Can you get a $0 Medicare Advantage plan with 5-stars?
Yes, in 92% of the counties where 5-star plans are available, you can get a free Medicare Advantage plan that also has 5 stars. However, the cost o...
Why are star ratings important when choosing a Medicare plan?
Medicare star ratings tell you about a plan's quality and performance across a range of criteria. This can tell you the rate of customer satisfacti...
Who is Stephanie Carlton?
Stephanie Carlton is a senior expert in the McKinsey Center for Healthcare Reform; Dan Jamieson is a partner in McKinsey's Chicago office; Monisha Machado-Pereira is a partner in the Silicon Valley office; and Cara Repasky is a consultant in the Washington, DC, office.
Does MA plan quality improve?
Overall, these results show that, since the advent of the QBP system, MA plan quality (as measured by Star Ratings) has improved while controlling or reducing costs. Experience with Star Ratings indicates that health insurers can adjust and improve their performance over time based on incentives built into CMS-determined metrics.
What are the problems with the Star Rating System?
The Star Rating System has had other unintended consequences resulting from poor program structure and misaligned incentives. Some of the biggest problems with the program structure relate to timing. The measurements that will be evaluated each year are determined and announced after both the period from when the measurements are taken and after contract submissions for the following year are due. This leaves plans unaware of what they’re being evaluated on, which makes it difficult to know what they should be doing or to make appropriate changes for the next year resulting in a two-year lag on adjustments by plans and their providers, at best. Another concern is that the retrofitting of the evaluation criteria could allow for CMS to pick winners and losers by selecting criteria that specific companies perform particularly well (or poor) on. Further, the bonus payments are based on the benchmark price and enrollment in the following year from when the measures were taken, which means plans are rewarded for patients they weren’t necessarily covering at the time the reward was earned. Finally, not making the evaluation criteria known ahead of time and delaying the reward is inconsistent with all theories on how to make reward incentive programs effective.
Why is the Star Rating System unfair?
Many have expressed concern that the Star Rating System—because of how measures are evaluated and rewards are paid —unfairly punishes both low-income enrollees and the plan sponsors primarily serving such enrollees. It is argued that a significant portion of the measures evaluated are influenced by a patient’s socioeconomic conditions, yet very few of the measures are risk-adjusted to neutralize the impact of such differences between patients, thus not allowing for a fair comparison between plans with high versus low enrollment of low-income individuals. This concern has led to calls for either establishing a separate rating system for Special Needs Plans (SNPs) or any MA plan in which enrollees are predominantly low-income, or providing a score adjustment for such plans in order to compensate for those patient differences. [19] The National Quality Forum, in its report released in August 2014, notes the well-documented link between patients’ sociodemographic conditions and health outcomes, and recommends that such factors be included in risk adjustments for performance scores. [20]
What is geographic variation in fee for service?
Geographic variation in fee-for-service (FFS) costs is associated with geographic variation in plan ratings which will result in lower benefits in areas that disproportionately have higher poverty rates; thus, benefits will be lower where patients are poorest.
What is a reward plan?
Rewards are two-part: direct bonus payments to the plan operator and rebates which must be returned to the beneficiary in the form of additional or enhanced benefits , such as reduced premiums or co-payments, expanded coverage, etc.
What is MAO rating?
Ratings are set at the MAO contract level—not the plan level—meaning all plans under the same contract receive the same score. Stars are assigned to each contract for each individual measure being evaluated, based on relative performance compared to the other contracts. The overall summary score for each contract is then calculated by averaging ...
Why are all plans not able to achieve top ratings?
All plans will not be able to achieve top ratings, however, because the system uses relative scoring, essentially ranking plans in order of achievement— not everyone can be the best.
How many MA contracts received bonus payments in 2012?
In 2012, 91 percent of MA contracts received a bonus payment, but only 4 percent of the total bonus payments came from funds designated for these bonuses by the ACA—the rest of the bonuses were paid through the demonstration project which allowed for bonuses to be paid to 3-star plans. [12] Two thirds of total payments went to plans with less than 4-star ratings. [13]
Top 5-star Medicare Advantage plans
Medicare Advantage plans with five stars are top-tier plans that are considered "excellent" by the Medicare's administering agency, the Centers for Medicare & Medicaid Services (CMS).
5-star special enrollment period
If a 5-star plan is available in your location, you qualify for a 5-star special enrollment period (SEP) that allows you to switch to a 5-star plan at any time during the year.
How Medicare star ratings are calculated
Each Medicare plan's overall star rating is a weighted average of several different data points. This means it's a robust measurement that can help you understand which are the best-performing Medicare plans in your area.
Frequently asked questions
Medicare star ratings are calculated using 40 criteria across Part C and Part D coverage. This includes survey data about member satisfaction, calculations about the number of complaints, outcomes such as how often those with diabetes fill their prescriptions and more.
Methodology
Data and analysis is based on Centers for Medicare & Medicaid Services (CMS) public use files, fact sheets and technical notes. Medicare Advantage analysis only includes plans that include prescription drug coverage and excludes employer-sponsored plans, special needs plans, PACE plans, sanctioned plans and health care prepayment plans (HCPPs).
Why do Medicare Advantage plans get stars?
Medicare Advantage plans receive a star rating based on performance measures that are intended to help potential enrollees compare plans available in their area as well as encourage plans to compete based on quality. All plans that are part of a single Medicare Advantage contract are combined when calculating the quality rating ...
What is the MLR for Medicare Advantage?
However, plans’ ability to keep these and other payments as profit is not unlimited – Medicare Advantage plans must meet medical loss ratio (MLR) requirements of at least 85 percent, and are required to issue rebates to the federal government if their MLRs fall short of required levels.
How much is the bonus for Medicare 2021?
UnitedHealthcare and Humana, which together account for 46% of Medicare Advantage enrollment, have bonus payments of $5.3 billion (46% of total bonus payments) in 2021. BCBS affiliates (including Anthem BCBS) and CVS Health each have $1.6 billion in bonus spending, followed by Kaiser Permanente ($1.1 billion), Cigna and Centene ($0.2 billion each).
What percentage of Medicare Advantage plans will receive bonus payments in 2021?
In 2021, 81 percent of all Medicare Advantage enrollees are in plans that receive a bonus payment from Medicare based on star quality ratings (or because they are new), substantially higher than the share in 2015 (55 percent). Annual bonus payments from the federal government to Medicare Advantage insurers have increased correspondingly, ...
How much is Medicare Advantage rebate in 2021?
Additionally, as more enrollees are in plans that are in bonus status, the average rebate per Medicare Advantage enrollee has more than doubled, rising from $184 per year in 2015 to $446 per year in 2021.
Why are bonus payments increasing?
The rise in bonus payments is due to both an increase in the number of plans receiving bonuses, and an increase in the number of enrollees in these plans. Because unrated plans also receive bonus payments, a total of 85 percent of enrollees are in plans that are eligible to receive quality bonus payments, and 81 percent ...
How much is the average bonus for 2021?
The average bonus per enrollee in an employer plan is $886 in 2021, more than 2.5 times higher than for enrollees in either individual plans ($351) or SNPs ($309). While average bonuses in employer plans have consistently been higher than for other plans, the gap has increased substantially in recent years, driven by a rapid rise in the average bonuses for employer plans. Both the high share of enrollees in group plans that receive bonus payments (98% in 2021), as well as changes to the payment methodology for group plans implemented starting in 2017 contribute to this trend.
What is the difference between MA and Medicare?
What a difference a year makes! This time last year, Medicare Advantage (MA) plans were reflecting on their 2020 Star Ratings performance as competition stiffened among plans with 4 or more stars. The MA market was growing rapidly, as baby boomers aged into Medicare and increasingly selected MA plans over traditional Medicare offerings. MA plans fine-tuned their quality measurement, reporting and improvement strategies and kicked off the 2020 year strong.
Who is Kristopher Volrath?
Kristopher Volrath serves as vice president, products & services, Inovalon, and is responsible for product revenue, design, strategy, and product execution with the payer business unit, supporting multiple products within his portfolio, including Quality Spectrum ®, Data Visualization and Reporting, Clinical Data Extract (CDE), and the Inovalon ONE ® Platform. In this role, Mr. Volrath and his team partner with clients to provide deep insights into quality measurement, drive quality improvement strategy and execution, deliver integrated member and provider engagement solutions, analyze and visualize information for rapid consumption, and achieve meaningful quality outcomes for Medicare Advantage, state-based Medicaid, and Commercial Health Insurance Exchange plans.
What are CMS Star Ratings?
When comparing either Medicare Advantage (MA) plans or Prescription Drug Plans (PDPs) you may have heard or come across the ‘Star Rating’ for a plan. The Star Rating of a MA or PDP plan is given by the Center for Medicare and Medicaid Services (CMS) which is the federal agency that administers Medicare to measure how plans perform.
How are CMS Star Ratings Calculated?
Medicare Advantage plans are given an overall rating based on 5 key categories:
How many 5-star plans are there in 2021?
According to the latest CMS data released in October 2021, quality ratings of Medicare Advantage and Medicare Part D drug plans remain strong. For 2021:
How do I enroll in a 5-star plan?
Unlike other Medicare Advantage (MA) or Medicare Prescription Drug (Part D) plans, if a 5-star plan is available in your area, you can enroll in the plan any time of the year using the enrollment periods below:
Final Words
Star ratings can be an important factor when selecting your Medicare Advantage or Prescription Drug Plan. While star ratings should not be the only factor in selecting your plan, they provide additional points of comparison. You should check your plan’s star rating on an annual basis to see if there have been any significant negative changes.
