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The Centers for Medicare & Medicaid Services has revised the Medicare Advantage star ratings system in a final rule that is expected to give MA insurers $18.6 billion over the next decade.
The changes are expected to boost star ratings, which will increase insurers’ quality bonus payments. CMS estimates the revisions will increase federal spending by $18.6 billion over the next decade.
CMS has removed 11 administrative measures it considered burdensome and the previously planned Health Equity Index. Revisions focus more on clinical outcomes. The changes take effect in 2027.
Star ratings currently rate Medicare Advantage prescription drug Part D contracts on up to 43 measures. MA-only contracts are currently rated on 33 measures, and Part D plans on up to 12 measures.
Two major changes are the elimination of the Excellent Health Outcomes for All reward, previously called the Health Equity Index reward. This was developed to incentivize improved performance for a subset of enrollees. CMS will continue the historical reward factor that encourages consistently high performance for all enrollees across all quality measures.
Secondly, CMS is removing 11 measures focused on administrative processes in areas where it said beneficiaries cannot distinguish between performance between plans due to high performance and little variation.
These changes refocus the program on clinical care, outcomes and patient experience where meaningful performance differences exist across contracts, CMS said.
CMS is touting MA plans as an alternative to fee-for-service Medicare. The agency is reportedly considering a policy to automatically enroll seniors in a Medicare Advantage plan rather than original Medicare, according to comments made by Chris Klomp, director of Medicare and deputy administrator for CMS.
WHY THIS MATTERS
Insurers have run into headwinds with their MA plans due to rising medical costs, reduced federal reimbursement and more stringent star ratings criteria.
Some major insurers have dropped plans and have cut back on MA benefits.
Reimbursement rates for 2027 are expected to remain roughly flat compared to the prior year, according to Seeking Alpha.
The final rule offers MA insurers needed financial relief. MA plans that receive four or more stars in the annual Part C and D star ratings receive bonus payments from the government.
THE LARGER TREND
The CMS final rule also revised the Medicare Prescription Drug Program and the Medicare Cost Plan Program.
Additionally, CMS is adding a new Part C Depression Screening and Follow-Up measure to address behavioral health gaps starting with the 2027 measurement year and 2029 Star Ratings.
Other changes are in final rule on the Federal Register.
Email the writer: SMorse@himss.org