Among the significant perks of being a five-star plan is the ability of payers to enroll members throughout the year rather than only during the seven-week Medicare open enrollment period.
Finally there is some positive news about health plans coming out of Washington.
The federal shutdown earlier this month and ongoing problems with the healthcare.gov have overshadowed the annual announcement by the Centers for Medicare & Medicaid Services of the star quality ratings for Medicare Advantage health plans.
Now in its sixth year, the ratings program created by CMS to monitor plan quality and performance for beneficiaries. The program was greeted with a collective yawn among health plans until the Patient Protection and Affordable Care Act sweetened the pot with bonus payments.
Since 2012, health plans with at least a three-star rating have shared billions of dollars in bonus payments. With that kind of money on the line it comes as no surprise that health plans keep a watchful eye on those star ratings, which often play a strategic role in the development and growth of their Medicare Advantage book of business.
During a recent conference call with stock analysts, Mark Bertolini, chairman, CEO and president of Aetna Inc., stated that a "key component of Aetna's Medicare strategy includes the substantial investment we have made to improve our star ratings." He noted that based on the new 2014 ratings data, Aetna has over 60% of its Medicare Advantage members in 4- and 4.5-star plans.
This year, CMS awarded five-star quality ratings to 14 Medicare Advantage plans covering about 5.6 million enrollees. Among the significant perks of being a five-star plan: the ability to enroll members throughout the year rather than only during the seven-week Medicare open enrollment period. That means five-star health plans "are always open for [new] business," says Matthew Eyles, executive vice president of Avalere Health, a healthcare consulting group.
He explains that for many health plans the Medicare Advantage premiums collected tend to be higher than what they command in the commercial marketplace, so being able to market and enroll members throughout the year is attractive.
This year's 5-star plans:
- Kaiser Foundation Health Plans; CA, CO, GA, HI, OR, WA and the Mid-Atlantic states
- KS Plan Administrators; TX
- Group Health Cooperative; WA
- Gunderson Health Plan; IA, WI
- HealthSpring of Florida
- Providence Health Plan; OR and WA
- Medical Associates Health Plan; IA, IL
- Dean Health Plan; WI
One thing I noticed is the lack of for-profit national players among this elite group. Although these big players are willing and able to throw resources at the star rating program, it is simply not that easy to become a five-star plan, explains Eyles.
The CMS star rating system is based on 48 quality measures for Medicare Advantage plans with prescription drug programs (MA-PD) and 36 measures for MA plans without a drug plan. The measures fall into several broad categories, including health screenings, managing chronic conditions, and member satisfaction.
In addition, making the grade often depends on how common managed care is in a geographic area. "It's not just the actions by the health plans, although that's certainly the most important element," says Eyles. "But you have to have providers who are your partners, who understand what drives quality, and who do what they are supposed to do to drive those high star ratings."
Eyles says that overall the 2014 star ratings show improvement among the 3- and 3.5-star plans. "CMS is pushing plans and the plans are clearly responding. They have been making investments in quality and improving those star ratings. Their investments are paying off. It's an intensive effort to focus on improving and to actually be able to implement the systems, programs, and outreach with beneficiaries, to make a meaningful difference one year to the next.
For the 2014 plan year, the number of 4- and 4.5-star plans available increases to 151 from 116 the previous yea. Moving from three to four stars is important because in 2015 the minimum rating to qualify for a bonus will be four stars.
"The bonus can be the difference between an MA plan making money or not, says Eyles.
Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.
