Those crafting healthcare policy, as well as those entrusted with making sure that the system works as it should for everyone, have long had as their goal the multiple aims of controlling costs, improving access, and enhancing quality. And there is near universal agreement that quality must be the driver as it is the foundation for nurturing trust in a system most badly in need of public confidence.
Toward this end, the Centers for Medicare & Medicare Services established a star-rating system to help consumers compare quality among Medicare Advantage plans. Plans are graded on a one- to five-star rating based on more than 50 quality metrics and weighing such factors as clinical outcomes, access to preventive services, managing chronic conditions and consumer satisfaction.
The Affordable Care Act transformed the star ratings from a “nice to have” into a critical component of Medicare Advantage payment as CMS now pays plans based on the quality of care provided to their members – the higher the star rating, the more dollars plans receive. Starting next year only four- and five-star plans will receive any quality bonus payments at all, and CMS will terminate contracts with plans that are consistently low performing.
Plans and beneficiaries are responding to this in impressive numbers. This year more than one-third of Medicare Advantage contracts have a rating of four or more stars, compared to 14 percent three years ago. What’s more, 53 percent of Medicare Advantage beneficiaries are now enrolled in plans with four or more stars, compared to just 24 percent in 2011.
This quality bonus program has encouraged health plans and providers to work together as never before. With plans and providers encountering harsh financial challenges – sequestration, rate cuts, specialty drug trends and more – achieving four or more stars and earning the bonus payment has become a necessary way to mitigate at least some of the cuts. The ultimate beneficiary of this intense focus on quality is the patient.
Thanks to the five-star system, unprecedented creative collaboration between health plans and physicians is taking place. We are seeing the development of affordable programs that meet the needs of Medicare beneficiaries, including those that are healthy and active as well as those living with multiple chronic conditions or frail. We are seeing research into best practices in geriatric care and then sharing that information across the industry. And we are seeing an improvement in administrative efficiencies with a particular focus on data exchange that can support better systems of care and service.
In testifying recently before the House Ways and Means Subcommittee on Health, I expressed support of the five-star program as it serves as a powerful incentive for plans to adapt best practices to meet specific quality metrics. But I also noted that Congress and CMS must be vigilant regarding the long-term future of the program. Attention must be paid in two key areas.
First, each year CMS makes changes to the criteria and its weighting and that is often counterproductive. Plans need stability to allow for better long term planning and investment. Second, there is far too long a lag between experience, reporting and quality rating as stars-based payments are actually based on data collected three years earlier. Viewed together, that means that plans are often making investments to comply with measures that cease to exist before those investments are ever realized. To ensure that star ratings reflect plans’ actual performance on current measures, CMS should seek consistency in its criteria and should shorten the time between reporting and ranking.
There is nothing more important than quality care and treating individuals with respect and dignity. Five Stars is helping to make this happen. With a little refinement, those stars will shine even more brightly than ever.
Chris Wing is president and CEO of SCAN Health Plan, one of the nation’s largest not-for-profit Medicare Advantage plans.