Star Ratings

Signaling what some say is an unusual move, CMS late last month released a request for information (RFI) in which it encouraged a variety of stakeholders to submit responses to questions related to nearly every aspect of the Medicare Advantage program, from supplemental benefits and social determinants of health (SDOH) to risk adjustment and other payment-related policies. And while that could mean CMS is looking to change multiple aspects of the program, industry experts say the agency is asking the right questions, and they are encouraged that it signals a willingness to understand the potential impact of program changes on MA organizations.

Although previous administrations have issued more general RFIs on Medicare and the Biden administration in February released an RFI specific to Medicaid and CHIP coverage and access, Avalere Senior Consultant Tom Kornfield says he can’t recall seeing one that was so explicitly focused on MA. When asked whether he thinks the request was prompted by a recent hearing on Capitol Hill regarding MA oversight and beneficiary access, Kornfield suggests it’s more likely that CMS is seeking information as it works on a proposed MA and Part D rule that would come out in the fall and contain policies for plan year 2024. “They could be using this opportunity to collect information that could then help them determine what types of policies to put into that proposed rule,” he tells AIS Health, a division of MMIT. And the RFI could generate a lot of feedback, he says.

When it comes to medication adherence rates, disparities among racial and ethnic groups pose a common challenge to health plans. But leaders in the Medicare Advantage space are working to disrupt the status quo with patient-centric, data-driven solutions that are helping to bridge the gap.

A recent initiative at SCAN Health Plan, a not-for-profit insurer serving 270,000 MA members in Arizona, California and Nevada, sought to narrow the gap between member groups by engaging in a top-down endeavor that wrapped in multiple departments, from human resources to pharmacy. “Our goal was to improve adherence,” relays Romilla Batra, M.D., chief medical officer with SCAN, “and to reduce gaps among African American and Latinx [members].”

Serving as a timely companion to its comment letter on the 2023 Advance Notice for Medicare Advantage and Part D plans, the Medicare Payment Advisory Commission (MedPAC) on March 15 released its 2022 March Report to the Congress: Medicare Payment Policy. The first of two annual reports containing policy recommendations, it echoed many of MedPAC’s prior points regarding MA plan reimbursement, namely that plans are overpaid for delivering services at below the cost of fee-for-service (FFS) Medicare.

MedPAC observed that MA plan bids continue to trail FFS, with the average plan bid coming in at 15% below FFS Medicare costs for 2022. When accounting for coding intensity, Medicare payments to MA plans this year will average 104% of FFS spending, like 2021, MedPAC estimated. In other words, “Medicare currently pays 4% more to MA plans for the average enrollee than it would have had that enrollee remained in traditional fee for service,” explained MedPAC Executive Director Jim Mathews, Ph.D., during a March 15 press briefing on the new report.

Aside from a headline-grabbing estimated pay boost of nearly 8% for Medicare Advantage organizations next year, the Biden administration’s first preliminary rate notice didn’t include many surprises for MA and Part D sponsors. Instead, the notice focused largely on potential changes to star ratings in the name of advancing health equity and monitoring member experience. At the same time, the notice addressed one aspect of payments for insurers serving a large portion of patients diagnosed with end-stage renal disease (ESRD) but left another to future policymaking.

With 74 Medicare Advantage Prescription Drug plan contracts earning a 5-star rating for 2022, compared with just 21 such plans last year, an unprecedented number of MA-PD plans have the ability to market 5-star products throughout the year — thanks in large part to COVID-related adjustments to the star ratings that are not likely to reoccur. According to multiple industry experts, that anomaly presents a unique set of challenges for plans that weren’t expecting to be 5 stars and could create some unusual midyear enrollment shifts.

That all depends, however, on how aggressive 5-star plans are with their marketing and how many enrollees take advantage of the so-called 5-star special enrollment period (SEP). While MA insurers have the advantage of marketing their 5-star plans year round, enrollees who are in a service area where a 5-star plan is available may switch from their current Medicare plan to a 5-star contract one time between Dec. 8 and Nov. 30.

The pandemic-fueled boom in 5-star rated Medicare Advantage contracts could cause “significant market disruption” in 2022, suggests a new report from Wakely. In an analysis of enrollment data from CMS, the actuarial consulting firm found that 5-star contracts account for 19% to 30% of MA intra-year enrollment growth (i.e., enrollment gains occurring between February and December of a particular year), with 5-star contracts growing between 3.8% and 5.1% midyear. Since 5-star plans have the advantage of marketing their products all year long and enrolling members who qualify for the 5-star special enrollment period, the major increase in the number of available 5-star plans has the potential to create unprecedented enrollment shifts later this year. The report warned, however, that midyear plan switchers may have a less-than-favorable risk profile.

In addition to floating a variety of potential changes aimed at advancing health equity in the Medicare Advantage and Part D programs, CMS in its Feb. 2 release of the 2023 preliminary rate notice estimated that MA plans will see an average pay boost of 8% in 2023. And that estimate could change: CMS for 2022 originally estimated that plans would receive an average reimbursement increase of 2.8%, then bumped that estimate up to 4.08% in the final rate announcement.

To Evercore ISI, the 2023 estimate isn’t far off from the “all-in” rate increase of 7.6% in 2022, when considering average risk coding trend, which varies by company.

CMS on Jan. 6 released a 360-page proposed rule largely aimed at increasing Medicare Advantage plan accountability and strengthening beneficiary protections, particularly for patients who are dually eligible for Medicare and Medicaid. As the first major MA and Part D rulemaking under the Biden administration, the proposed rule would reinstate several policies that were unwound by the Trump administration, such as the return of detailed reporting medical loss ratio (MLR) requirements and provider network reviews for new and expanding MA plans.

The proposed rule, Medicare Program; Contract Year 2023 Policy and Technical Changes to the Medicare Advantage and Medicare Prescription Drug Benefit Programs (87 Fed. Reg. 1842, Jan. 12, 2022), also revisits a Trump-era plan to reform pharmacy direct and indirect remuneration (DIR) — a topic that has long been a thorn in the side of community pharmacies. Specifically, CMS proposed to include all pharmacy price concessions — removing an exception for those that cannot be reasonably determined — at the point of sale in the definition of “negotiated price,” which is the primary basis for determining a beneficiary’s cost of obtaining a Part D covered drug.

With continued emphasis on member experience, several new Part C measures and a directional shift to closing health care inequities, 2022 stands to be a landmark year in terms of changes to Medicare Advantage organizations’ star ratings strategies, industry experts tell AIS Health, a division of MMIT.

“There is so much earth-shattering change on the horizon that most plans are just not thinking about,” cautions Melissa Newton Smith, executive vice president, consulting and professional services with Healthmine, Inc. “We’re worried that COVID took up way too much airtime and that plans have lost sight of the forest through the trees in MA a little bit.”