Will COVID-19 and CMS’s Latest Stars Guidance be a Boom or Bust for MA plans? | Deloitte US has been saved
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By Danielle Moon, specialist leader, and Akhil Rao, manager, Deloitte Consulting, LLP
In response to the COVID-19 pandemic, the US Centers for Medicare and Medicaid Services (CMS) recently told Medicare Advantage (MA) plans that it would use last year’s Healthcare Effectiveness Data and Information Set (HEDIS) and Consumer Assessment of Healthcare Providers & Systems (CAHPS) survey data for determining 2021 Star ratings. The guidance follows other policy changes included in CMS’s 2021 Final Rate announcement that was released in April.
Lockdowns and quarantines prompted by the public-health emergency have severely inhibited Star operations. It has become nearly impossible for MA plans to gather clinical HEDIS data from provider offices, deploy CAHPS surveys, or encourage members to seek preventive care. In its latest guidance, CMS explained that MA plans won’t be required to submit 2020 HEDIS or 2020 CAHPS survey data for inclusion into 2021 Star-rating calculations. This means roughly 50-55 percent of 2021 Star ratings will be calculated using on 2018 performance data, which was used for the 2020 plan year. Between 45 and 50 percent of 2021 ratings will be based on 2019 data.
This guidance is likely to benefit larger, more established, and higher-rated MA plans than low-performing plans. Large multi-state and national plans significantly outperformed state and regional MA plans on HEDIS and CAHPS measures on 2020 Star ratings, according to Deloitte’s analysis of the MA Stars landscape. National MA plans performed 3 percent to 5 percent higher across HEDIS and CAHPS measures than single-state and regional plans.
With MA plans not reporting new data, improvements made during the 2019 performance year, or planned for 2020, won’t be reflected in Star ratings impacting future MA payments. This could significantly affect low-performing MA plans that had made investments to improve their scores. Most national MA plans already have an edge when it comes to Star ratings. They’re also likely to fare better at weathering some of the negative impacts from COVID-19.
Recent changes to Star ratings
Over the last few years, most of the changes to Star ratings have aligned with CMS’s emphasis on the member experience. In line with this, CMS has increased the relative weighting of measures of patient experience (obtained through CAHPS), complaints, and access from 1.5 to 2, starting with the 2021 Star ratings. This has increased the proportion of these measures by about 4 percent on the overall Star score for the same level of performance. CMS recently finalized its proposal to further increase the weight for these measures from 2 to 4, starting with the 2023 Star ratings. In response to comments in the Final Rule, which was published June 2, CMS cited the importance of plans enhancing their focus on patient experience during the current COVID-19 pandemic.
The agency also removed the “all-cause readmission” measure from HEDIS due to methodology changes, and reclassified Statin Use in Persons with Diabetes measure as a process measure (weighted at 1), starting with the 2023 Star Ratings. CMS also recognized the expanded data sources MA plans can use to fulfill numerator requirements for HEDIS measures to incorporate additional sources of data from patient-used devices (e.g., for the Controlling High Blood Pressure measure, readings are allowed from home blood-pressure machines).
How will guidance impact MA plans?
Two to three percent of overall MA payments are made through Quality Bonus payments to high-performing MA plans. MA plans that receive those bonuses are required to invest them to enhance benefits and to keep costs competitive, which can make those MA plans more attractive to potential members.
According to Deloitte research, about 60 percent of all MA enrollees are enrolled in a multi-state or national plan, and nearly 85 percent of those members are covered by an MA plan that has at least a 4-Star rating. The relationship between Star ratings and enrollment growth is undeniable. Nearly 80 percent of Baby Boomers who became eligible for Medicare in 2019 enrolled in an MA plan that had a rating of 4 Stars or more. MA plans that had a rating of 4 Stars or higher saw a year-over-year enrollment growth of 4 percent during the annual election period. That is substantially higher than the 0.17 percent annual growth seen across MA plans that had a rating of 3.5 Stars or less.
CMS’s COVID-19 guidance, along with annual final rate changes, favorably impact national plans and could encourage them to make bold growth plays through expansion and enhanced product benefits at competitive prices compared to regional plans, funded through Star ratings-driven revenue.
How can MA plans thrive?
Taking advantage of CMS’s flexibilities could help low-to-average-performing MA plans offset the negative impacts of the recent guidance while still focusing on Stars during an uncertain future. Here are a few suggestions that MA plans can consider as they recover from the pandemic: