Star Ratings: What’s Ahead

Each year as Q4 approaches potential and current Medicare enrollees look forward to the publication of Star Ratings tool that helps them compare Medicare Advantage (MA) health plans and find which plan is best for them. Star Ratings is a program operated by the Centers for Medicare and Medicaid Services or CMS and is based on relative quality and performance at contract level – not plan level.¹ It is the tool that measures a Medicare enrollee’s experience with a health plan and their health care system.

The Star Rating cycle has a two-year lag between the performance and rating period. For example, the measurement period for 2023 ratings primarily occurs in 2021.² 2023 CMS Star Ratings comprise 40 Star measures across nine domains, sourced from multiple datasets.³ Different measures have different weights, with the overall calculation based on a weighted average.⁴ Each metric is measured on a relative basis to other contracts and not to a predetermined performance target.⁵ Star thresholds, or cut points, are determined using algorithms using data collected from all qualified contracts, they are then utilized to determine relative performance.⁶

In this article we discuss the current Star Ratings landscape around star cut points, guardrails and outliers, and member experience measures go to 4x weight.

Drop in Star cut points (Exception: Medication Adherence measures)

For the bulk of the Star measures during the 2020 and 2021 measurement years, more cut points have declined than increased, indicating a decline in performance across the industry.⁷

The Managed Care Year End Recap 2022 Read Now

One big surprise, though it seems to be a constant surprise each year, is that the medication adherence measure cut points keep going up. For the measurement year 2020 (2022 Star Ratings), CMS permitted removing refill too soon edits, which pushed health plans to take all required steps to enable programs like home delivery. As a result of these modifications, some of those higher cut points for these measures increased by four- or five-points last year. Additionally, the Medicare Advantage Prescription Plan (MAPD) average according to Acumen, the CMS contractor that provides health plans and CMS with an analysis of pharmacy data, for the measurement year 2021 was not indicating the cut points would see any increase. Unfortunately, this may have caught health plans off guard. The trend continues to go up with four- and five-star cut points.⁸

Health plans could argue that at a certain point, you must hit that level where you just cannot get that many more people adherent. However, for many years CMS has continued to weigh these adherence measures significantly.⁹ Therefore, for health plans, these adherence measures should continue to be at the top of their Stars strategy. Year-over-year, these measures have seen an inch-by-inch progression, and it would be safe to assume this trend will continue next year with at least a one percentage point increase in the cut points for medication adherence measures.¹⁰

Installed Guardrails to limit cut point movement

This is the first year that guardrails have been used by CMS in an effort to increase the stability and predictability of measure level cutoffs. These barriers prevent non-CAHPS measure cut points from moving more than 5% in each direction.¹¹ Due to the CMS-imposed guardrails, it is important to keep in mind that changes in contract-level performance may have called for a larger cut point movement.

It is not all bad news, with guardrails in place, plans will now be able to better predict their performance on each measure and incorporate more fine-tuned strategies to achieve their desired star rating.

Tukey Outlier Elimination - Challenge to keep up with future star ratings

Starting with the rating year 2024 (the current ongoing measurement year – 2022), CMS will make it more difficult for plans to meet the performance standards necessary to retain or raise Star ratings by removing performance outliers of non-CAHPS measures from the Tukey methodology’s calculation of Star rating cut points. This is because among contracts with poor performance, outliers are more frequently identified towards the bottom end of performance.¹²

While adjustments to the cut point might provide some perspective on the overall market Star Rating performance, it is vital to keep in mind that significant program and regulatory changes are also likely to affect the Medicare Advantage organization (MAO) Star Rating performance.

End of Extreme and Uncontrollable Circumstances (EUC) - aka COVID protection

Because of the effect that COVID-19 had on the quality of performance in 2020, CMS implemented their EUC policy to all MA contracts for the 2022 Star Ratings, giving each contract the higher measure level star rating compared to the previous year.¹³ In essence, this increased the overall star ratings in 2022 for a large majority of the health plans in the nation. Therefore, the elimination of this safeguard for 2023 Star Ratings will likely fall in the overall star ratings for many MAOs, which could also translate to a reduced spending for Medicare in 2024.

Member Experience measures are now 4x weight

The CAHPS Patient Experience and Access to Care Indicators are now the most highly weighted non-improvement measures under the Overall Star Rating after CMS boosted their weight from 2 to 4.¹⁴ Although the overall effects of this modification are projected to be positive, there may be considerable performance fluctuation at the CAHPS contract level, which might result in a drop in Star Rating for some MAOs.

The considerable policy changes implemented this year may cause MAOs to experience any degree of improvement or degradation in their 2023 Star Ratings, even if it looks from the most recent cut-points that 2021 quality performance may have generally decreased. Overall Star Ratings for 2023 at the contract level are projected to change significantly for the industry.

Summary

Many MA plans that used the “best of” technique from prior years would have reduced Star ratings in 2023. The financial cost might be significant, especially for plans that suffered with diminishing performance quality during the pandemic. Although the trend for star cut points to get harder every year is not new, plans should anticipate the rise in difficulty and pick up speed now.

The ratings of other plans will not be boosted by underperforming plans anymore following the new Tukey outlier removal methodology going into effect for star rating year 2024 (based on the measurement year – 2022). In the long run, MA plans will not have to estimate which measures’ cut points will vary significantly since, new guardrails will limit those changes. This stability will likely result in an increase in the return on investment for non-CAHPS measure enhancements. The guardrail clause does not apply to CAHPS measures, and these measures will have a weight of 4 moving forward, therefore investments in these measures will remain crucial for stars strategy.

MA Plans - Act Now!

MA plans have until December 2022 to act before the measurement period Star Rating year 2024 concludes. Plans can consider the following actions:

Evaluate prior performance to uncover underlying issues

Plans might undertake diagnostic evaluations to uncover underlying performance difficulties that lead the plan to employ the “better of” technique in 2022. While some issues may have been transitory as plans were changed to accommodate the pandemic, others may have been essential and may jeopardize future Star performance. For instance, plans that are experiencing high complaint volumes should investigate the fundamental causes of such complaints and conduct focused measures like as member engagement campaigns to prevent negative member experiences from occurring.

Year-End Push: HEDIS/Pharmacy/Operational star measures

Plans might include specific actions to address at-risk indicators. Even if the measurement period for a metric is already underway, establishing a team dedicated to certain measures might significantly enhance star performance. In the past, for example, Plans have effectively developed midyear efforts aimed at HEDIS (e.g., call campaigns encouraging statin use and preventive screenings), pharmacy measures (e.g., incentive programs with pharmacies), and operational metrics (i.e., secret shoppers evaluate call-center performance).

Invest for the future

Plans should think about creating a systematic approach to quality spending or boosting expenditure if they currently have one. The return on investment of such investments will likely grow in the future as cut points are becoming more difficult and less erratic. Successful plans have provided front-office workers with quality-focused training, used engaged text messaging, and utilized predictive analytics to initiate call campaigns targeted at patients’ medication adherence.

The forthcoming years might be challenging for MA plans as CMS switches to a more stringent Star rating system that will expect improved performance from contracts to keep existing ratings. The financial effect will be significant for many plans, particularly those that have yet to establish a footing in their quality initiatives following the pandemic.

Yet, quality can become a source of competitive advantage for programs that successfully adjust to a stricter Star ratings environment. Retaining a Star rating of four or above can benefit plans in being financially stable, providing rich additional benefits to members, and competing for enrollees who place a high value on Star ratings. Plans that prioritize quality will have a significant advantage in better serving their members.

2023 Part C & D Star Ratings Technical Notes can be found here: https://www.cms.gov/files/document/2023-star-ratings-technical-notes.pdf¹⁶

Footnotes:

1: Medicare Star Ratings. Medicare Resources.Org (Last visited October 10, 2022). https://www.medicareresources.org/glossary/medicare-star-ratings/

2: 2023 Medicare Advantage and Part D Star Ratings. Fact Sheet. CMS (October 6, 2022). https://www.cms.gov/files/document/2023-medicare-star-ratings-fact-sheet.pdf

3: Ibid.

4: “Redesigning the Medicare Advantage quality bonus program.” Chapter 8. MedPAC Report to the Congress: Medicare and the Health Care Delivery System. MedPAC (June 2019). https://www.medpac.gov/wp-content/uploads/import_data/scrape_files/docs/default-source/reports/jun19_ch8_medpac_reporttocongress_sec.pdf.

5: Ibid.

6: Trends in Part C & D Star Rating Measure Cut Points. CMS. (December 13, 2021). https://www.cms.gov/files/document/2022-cut-point-trend.pdf

7: Increased Weights, Cut Points Likely Led to Drop in 2021 Stars. AIS Health. (October 15, 2020). https://www.healthmine.com/resources/news/ais-health-increased-weights-cut-points-2021-medicare-advantage-star-ratings-drop

8: Trends in Part C & D Star Rating Measure Cut Points. CMS. (December 13, 2021). https://www.cms.gov/files/document/2022-cut-point-trend.pdf

9: “Four Elements of a Successful Medication Adherence Strategy.” RxAnte. (Last visited October 12, 2022) https://www.rxante.com/health-plans/4-elements-of-a-successful-medication-adherence-strategy/

10: “Trends in Parts C & D Star Rating Measure Cut Points. Centers for Medicare and Medicaid Services.” (December 13, 2021) https://www.cms.gov/files/document/2022-cut-point-trend.pdf

11: 42 CFR § 422.166 - Calculation of Star Ratings. Cornell Law School: Legal Information Network. (Last visited October 10, 2022).https://www.law.cornell.edu/cfr/text/42/422.166

12: 3 Impacts of COVID-19 on Your Star Rating Strategy. Outcomes MTM, A Cardinal Health Company. (Last visited October 10, 2022) https://outcomesmtm.com/wp-content/uploads/2021/06/Star_Rating_Cut_points_whitepaper_final.pdf

13: CMS Changes to the Medicare Advantage Star Rating Program Drive Significant Increases to Overall Star Ratings. Wakely, an HMA Company. (January 2022). https://www.wakely.com/sites/default/files/files/content/impact-covid-2022-medicare-star-ratings.pdf

14: 2021 Medicare Advantage Star Ratings Changes and CAHPS Improvement. Adhere Health. (December) https://adherehealth.com/2021-medicare-advantage-star-ratings-changes-and-cahps-improvement/

15: Updates to the CMS Star Rating System And Methodology. For Cigna Medicare Advantage Providers. (January 2022). https://medicareproviders.cigna.com/static/medicareproviders-cigna-com/docs/star-rating-system-practice-impact-fact-sheet.pdf

16: Medicare 2023 Part C & D Star Ratings Technical Notes. Centers for Medicare and Medicaid Services. (Last visited October 10, 2022). https://www.cms.gov/files/document/2023-star-ratings-technical-notes.pdf

© Copyright 2022. The views expressed herein are those of the author(s) and not necessarily the views of FTI Consulting, Inc., its management, its subsidiaries, its affiliates, or its other professionals.

Related Insights

Related Information

Published

November 03, 2022

Key Contacts

Mark A. Van Ert

Managing Director

Mark A. Fish

Senior Managing Director

Krunal Patel

Director

Star Ratings: What’s Ahead