CMS Unveils 5-Star Medicare Advantage Plans

Officials at Martin's Point Health in Portland, ME learned Wednesday that its Medicare Advantage health plans scored two five-star ratings from the Centers for Medicare & Medicaid Services.

A five-star designation is a rarity; only 12 out of 446 plans rated achieved it in 2011. The rating means that Martin's Point's Value and Prime Medicare Advantage plans will qualify in 2012 for a cut of an estimated $3 billion in bonus payments. Also, the two plans will be able to enroll members throughout the year rather than only during the seven-week Medicare enrollment period.

The other Medicare Advantage plans with a five-star ratings for 2011 are Advocare in Wisconsin; Dean Health Plan in Wisconsin; Group Health Cooperative in Washington; Gunderson Lutheran Health Plan in Iowa and Wisconsin; Health New England in Massachusetts; and Kaiser Permanente in California, Colorado, Hawaii, Oregon and Washington.

Larry Henry, vice president of Medicare at Martin's Point, said the rating will provide a strategic advantage for the small plan, which has only 12,500 Medicare Advantage members. "Now we'll be able to tell our story and market our plans year-round. We'll be able to separate ourselves from the other Medicare Advantage health plans that can sell their products for only a short time each fall."

He said the plans were close last year –they were received 4.5 stars—and some tweaking helped kick them into star status. The plans posted important gains in preventive services thanks to a campaign to increase flu shots among its Medicare Advantage members.

The ratings program, created to help CMS monitor plan performance, has been around for four years, but it only began to generate real interest among health plans when the bonus payments were added as part of the Affordable Care Act.

The CMS star rating system is based on more than 40 quality measures, including preventive screenings, managing chronic conditions, and customer service.

Now the star rating system plays a strategic role in the development and growth of Medicare Advantage business.

During a recent conference call with stock analysts, Angela Braly, the president and CEO of WellPoint Inc., said the insurer's acquisition of CareMore, a Medicare Advantage plan, would "lead to higher quality star ratings that will be an increasingly important part of the Medicare program in the future."

During a similar call, Michael McCallister, Humana's chair of the board and CEO, said Humana "plans to reinvest heavily in improving our stars' processes, procedures and infrastructure to position us for further improvements in star metrics."

In addition to the dozen plans at the five-star level, another 97 achieved at least a four-star rating, which is the minimum number of stars needed to qualify for a bonus.

Unlike previous years when health plans were allowed to maintain their Medicare Advantage status despite poor quality ratings, CMS has proposed a rule that will give it the authority to terminate poor-performing Medicare Advantage and Part D sponsors that fail to achieve at least a three-star rating for three consecutive years.