Star Ratings

“Subpar” Medicare Advantage provider networks are costing the Medicare Advantage industry approximately $23 billion a year, according to Quest Analytics. That was just one of the staggering statistics shared at the 7th Annual Medicare Advantage Leadership Innovations forum, held Jan. 30 and 31 in Scottsdale, Arizona. As speakers discussed common industry themes of health equity, member engagement and quality improvement, the following percentages and dollar amounts helped to illustrate the impact of addressing (or failing to address) these and other health care issues. Click the quote icons below to see what presenters had to say about each one.

For our annual series of outlook stories on the year ahead in Medicare Advantage, AIS Health, a division of MMIT, asked multiple experts what they view as MA organizations’ “keys to success” in 2024 and what critical investments will help them unlock their goals. Responses ranged from using artificial intelligence and other digital tools to improve the member experience to strategically striking value-based agreements with providers.

“If health plans don’t do a good job of educating or empowering the members with information, then the member effort increases, which frequently leads to member churn,” observes Srikanth Lakshminarayanan, senior vice president of the Center of Excellence for Healthcare Engagement Services at Sagility, a tech-enabled business process firm that supports payers and providers. “With MA membership increasing literally day by day, it’s important for health plans to make a conscious effort at doing a good job on member onboarding and retention. People who come out of their commercial plan into a Medicare plan need handholding of a different kind. They often need to know how Medicare works, what’s the supplemental spend, etc.”

After a significant decline in Star Ratings performance for 2024, Elevance Health, Inc. and its affiliates have filed a lawsuit challenging CMS’s implementation of the Tukey outlier deletion methodology. Intended to infuse more “predictability and stability” into the Star Ratings by removing outliers from the cut point calculations for certain measures, its introduction was “fraught with errors and ambiguities during rulemaking” and marks a violation of the Administrative Procedure Act (APA), contends Elevance. And according to a leading Star Ratings expert, Elevance may not be the only MA insurer to sue CMS over its controversial implementation of the methodology.

The suit was filed by Elevance and affiliated entities in 18 states on Dec. 29 in the U.S. District Court for the District of Columbia. In its complaint, Elevance contends that CMS’s actions were “unlawful, and arbitrary and capricious” when it applied Tukey to the 2024 Star Ratings while contradicting its own policy of establishing “guardrails” for determining Star measure cut points. It also alleges that CMS was arbitrary and capricious when calculating the cut points and determining the plaintiffs’ Star Rating on a single Part D measure — Call Center-Foreign Language Interpreter and TTY Availability.

As changes such as the application of the Tukey outlier deletion methodology and the introduction of the Health Equity Index stand to make the Medicare Advantage landscape more competitive, CMS in recent weeks issued three contract terminations based on poor performance over a three-year period. While the COVID-19 public health emergency afforded MA and Part D insurers certain flexibilities, experts say the recent enforcement actions signal a tougher CMS coming out of the PHE.

Modern Healthcare on Jan. 8 broke the news that consistently poor Star Ratings for Centene Corp.’s WellCare Health Insurance of Arizona and WellCare Health Insurance of North Carolina would force the exits of two Medicare Advantage Prescription Drug (MA-PD) contracts from the MA market. According to separate letters to the subsidiaries dated Dec. 27, CMS decided to impose intermediate sanctions after WellCare failed to achieve a Part C summary Star Rating of at least 3 Stars in three consecutive rating periods for the specific contracts. That means the contracts had to stop enrolling new Medicare beneficiaries and cease all marketing activities, effective Jan. 12.

From Star Ratings and risk model changes to a significant overhaul of the Medicare Part D benefit that will take effect over the next few years, Medicare Advantage insurers this year must anticipate the potential impact of major changes and ensure their products and services continue to satisfy members. Investment priorities highlighted by three influential MA carriers include digital solutions, member engagement strategies and value-based care.

Humana Inc., for one, took a “thoughtful approach to bids to ensure we were meeting members’ needs while balancing the rate environment,” says George Renaudin, president and Medicare and Medicaid. That included maintaining or enhancing key benefits that were identified by consumers and brokers as most critical to members, such as $0 premiums, dental and Part B “givebacks.”

For our annual series of outlook stories on the year ahead in Medicare Advantage, AIS Health, a division of MMIT, spoke with more than a dozen industry experts on the challenges facing MA insurers and the potential strategies to stay ahead of them. One running theme from this year’s conversations is the sheer level of uncertainty MA organizations are facing in 2024 and beyond, from revenue headwinds driven by changes in risk scoring and the Star Ratings to yet-to-be-finalized proposals around broker compensation and supplemental benefits. And that’s all while managing an overhaul of the Medicare Part D benefit, thanks to the Inflation Reduction Act (IRA) of 2022. And many of these changes “could have substantial impacts on revenue, which impacts benefit design, supplemental benefits, and so on,” says Steve Arbaugh, managing principal and CEO with ATTAC Consulting Group.

Here, in no particular order, are the major challenges and unknowns facing MAOs in 2024 and beyond:

In a Nov. 15 rule proposing policy and technical changes for the 2025 Medicare Advantage and Part D plan year, CMS made numerous changes aimed at protecting beneficiaries from “predatory marketing” and ensuring they enroll in the MA plans that best meet their needs. And depending on how plans execute these new provisions, some have the potential to impact Star Ratings, industry experts observe. At the same time, the rule proposed several methodological enhancements, clarifications and operational updates to the 2025 Star Ratings.

For example, CMS provided an update on its plans to include the Universal Foundation of quality measures that would align across all CMS programs and to provide a “building block to which programs will add additional aligned or program-specific measures.” As part of this plan, CMS said it has submitted the Initiation and Engagement of Substance Use Disorder Treatment (IET) Part C measure to the Measures Application Partnership (MAP) for review as a measure under consideration. Additionally, CMS indicated that it will submit three other Universal Foundation measures — Adult Immunization Status, Depression Screening and Follow-Up, and Social Need Screening and Intervention, which are now reported as display measures — to MAP prior to proposing the use of those measures in future rulemaking.

Only 2% of Medicare beneficiaries who enrolled in a stand-alone Prescription Drug Plan (PDP) in 2024 will be in contracts with 4 or more stars, compared to 42% in the 2022 plan year and 9% in 2023, according to CMS’s recently released estimates. The average Star Rating for PDPs dropped to 3.11 in 2024 from 3.70 in 2022, with two contracts receiving 1.5 stars.

The distribution change is largely fueled by methodology changes in how many of the Star Ratings are calculated. Known as Tukey outlier deletion, the changes center on removing outlier contract scores when determining the cut points for all non-Consumer Assessment of Healthcare Providers and Systems measures.

Despite declines in the average overall Star Rating for Medicare Advantage Prescription Drug plans and the number of MA-PD contracts earning 4 stars or higher, the 2024 Star Ratings data released by CMS last month indicates that about two-thirds of performers held onto their 5-star rating from the previous year. For our annual series on the success stories of highly rated MA plans, leadership at several repeat 5-star performers touted comprehensive, integrated and localized approaches to continually delivering quality care.

For Quartz Health Plan, simplifying the member journey and working closely with its provider owners have been two areas of focus, according to Christina Ott, chief growth officer. Formed by the 2017 combination of Gundersen Health Plan, UnityPoint Health and Physicians Plus Insurance Corp., and then rebranded as Quartz, the insurer’s MA-PD contract serving enrollees in select counties of Minnesota has earned 5 stars for the 16th time, according to Ott. Quartz also has MA membership in Illinois, Iowa and Wisconsin; Advocate Aurora Health joined as a minority owner in 2021. While Quartz is focused on selling its products where its provider owners can best serve seniors and “has a narrower network than most,” it does have other providers in the network and it “aligns with providers in ways that work for the individual,” she tells AIS Health, a division of MMIT.

As publicly traded insurers report their third-quarter 2023 financials this fall, two of the Medicare Advantage organizations most impacted by the 2024 Star Ratings recently expressed confidence in their ability to regain higher marks, driven in part by increased adoption of value-based care models.

For the quarter ending Sept. 30, Elevance Health, Inc. beat Wall Street expectations with adjusted earnings per share (EPS) of $8.99, an increase of roughly 20% over the third quarter of 2022, and recorded operating revenue of $42.5 billion, up 7.2% from the prior-year quarter. Its health benefits operating margin of 5.0% was also above consensus, aided by a medical loss ratio of 86.8%, which came in lower (better) than 87.2% reported in the year-ago quarter — fundamentals that Goldman Sachs viewed as “generally favorable” in an Oct. 18 note to investors. The insurer ended the quarter with 47.3 million medical members, a year-over-year increase of 42,000 lives, reflecting growth in its Affordable Care Act, BlueCard and MA businesses. During the quarter, however, membership fell by 664,000, driven by attrition in Medicaid due to eligibility redeterminations and a new entrant into one of the insurer’s state programs in July, explained Chief Financial Officer John Gallina during a conference call held on Oct. 18 to discuss third-quarter 2023 earnings.