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Medicare Advantage Program Standards Tightening

Christopher Cheney, for HealthLeaders Media, April 7, 2014

The most significant change on tap to the ratings system is expected to be an increase in the star threshold for bonus payments to health plans, based on a wide array of quality standards.

In addition to a widely anticipated cut to the Medicare Advantage payment rate in 2015, the Centers for Medicare & Medicaid Services are expected to announce Monday several changes to the MA five-star ratings program.

The most significant ratings change on tap to the ratings system is expected to be an increase in the star threshold for bonus payments to health plans, based on a wide array of quality standards.

When the star ratings program's three-year demonstration period comes to a close at the end of this year, three-star ratings will no longer make the bonus payment cut; four-star ratings will become the new gold standard.


Medicare Advantage Cuts Expected


The bonus payments are  a "the big driver" of the MA star ratings program, according to Michael Kavouras, VP of star ratings at the Connecticut-based insurer, Aetna. "There are revenue opportunities for health plans," he said in a phone interview.

The pay-for-performance program can earn insurers a five percent bonus on top of the benchmark payment rate in the particular county or counties where an MA health plan is offered. The benchmarks set the maximum amount Medicare will pay a health plan in an area.

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