Winning on Stars: It Starts and Ends With Providers

Star Ratings are critical for Medicare Advantage carriers. For many, the 5 percent reimbursement bonus for four- and five-star contracts determines whether or not the plan will turn a profit.

As ongoing regulatory changes and competitive pressure make high ratings even harder to achieve, plans must understand exactly where and how to invest in their performance to maximize impact and ROI.

The top three concerns: providers, providers, and providers

Almost twenty percent of the evaluation criteria for determining Part C Star ratings is comprised of metrics traditionally viewed as explicitly payer-driven. And—given a greater perceived ability to impact—many payers have traditionally focused in on these consumer-centric member experience measures.

But in practice, scores are determined almost entirely by the performance of contracted physicians rather than the payer itself. The chart below illustrates the point: there is a nearly perfect correlation between county average Part C Star ratings for all measures vs. provider-driven measures only (e.g., clinical quality / outcomes). The conclusion: success on Stars starts and ends with your provider network.

1CMS revises its Star Ratings system each year. What changes are important this time around?

Removal of predetermined thresholds is a big one. In prior years, most four-star cut points were held constant – so over the course of the year you knew with certainty whether you were on track to reach the minimum. But as of 2016, all thresholds will be determined on a relative basis. This makes it more challenging to plan and intelligently allocate resources / investment since you don’t necessarily know how much uplift you need to drive.
2There are a handful of measures that are concerned with what consumers think of the health plan itself. Should plans focus on them?

You certainly can’t ignore them—you can’t ignore any of the measures. But we’ve found that those payer-oriented measures are often secondary priority relative to the clinical metrics. It’s partly about how the measures are weighted and partly because it’s difficult to differentiate oneself on the domain since average performance tends to be high and homogenous.
3How do you plan a strategy in this sort of environment?

It’s not easy. You need to make some hard choices – choices made even harder by the uncertainties of the evolving scoring system. You have to understand your network, your market, and the full range of tools you can deploy – from incentive programs to in-office intervention to network sculpting.