The CMS began its star-rating system for Medicare's private insurance coverage about a decade ago as a way to encourage insurance companies to provide high quality care to Medicare beneficiaries. Companies are assigned a star rating on a scale of one to five. Many measures determine the composite score, including those involving the care process.
Richard Lieberman, chief data scientist at Mile High Healthcare Analytics, said it's not surprising that the figures have remained largely stagnant in recent years. Insurers that invested in the infrastructure and culture to improve quality of care did so years ago and continue to perform at four stars or higher, he said. On the other hand, some insurers still haven't made the investments needed to achieve higher performance.
"There are those plans that focus on it … and there are others that can't do it," he said. "I think 73% on an enrollment-weighted basis is probably where it is going to be."
The CMS also makes it harder every year to perform well on the various measures, which pushes out bad performers from the program, Lieberman said. Just 12 contracts for 2018 have 2½ stars while 61 have three.
Plans that earn at least four stars receive a 5% boost to their monthly per-member payments from Medicare, while those with lower scores receive nothing extra. The CMS bonus for a lot of plans is the "difference between profitability and not," Lieberman said.
The bonuses have allowed insurers to foster plans with additional benefits that are appealing to beneficiaries.
In addition, the CMS found that the number of Medicare Advantage contracts with dual Part D prescription drug coverage rose by 21 from 2017 to 2018. Medicare Advantage contracts have become a lucrative revenue opportunity for insurers with many increasing enrollees in such plans.
"More high-quality choices mean improved quality care and better customer service at lower cost. Medicare open enrollment begins soon and the star ratings help people with Medicare shop to find the best choice possible," CMS Administrator Seema Verma said in a news release.
Unlike the dual Medicare Advantage and Part D contracts, the number of Part D plans declined from 59 in 2017 to 55 for 2018. For enrollees in Part D plans, 47% will be in contracts with four or more stars in 2018.
For the first time, no insurers were labeled consistently low performers. Low performers—contracts with ratings of 2½ or fewer stars for three years in a row—can be terminated from the CMS program. Only two contracts—Phoenix Health Plans and GHS Managed Health Care Plans—were low performers in 2017.
Anthem touted its high star ratings Wednesday. The Indianapolis-based insurer said in a news release that more than 60% of its Medicare Advantage members will be in enrolled in plans with four stars or higher.
Humana, which saw its plans with four stars or higher drop in 2017, said its number of four-star plans increased for 2018. Humana has 12 contracts with a rating of four stars or higher, representing 74% of its 3.3 million Medicare Advantage members.
St. Louis-based Centene saw a drop in its star rating from four stars to 3½ for 2018. The insurer said that its Medicare Advantage plan, Health Net of California, saw its star rating drop because of a penalty stemming from a 2015 performance audit. The penalty will only affect the 2018 star rating, and it intends to appeal the decision, according to a news release.
An edited version of this story can also be found in Modern Healthcare's Oct. 16 print edition.
