The Changing Landscape of Star Ratings: Challenges Ahead for Payers

Star ratings have long been a cornerstone of assessing the quality and performance of health insurance plans from the Centers for Medicare & Medicaid Services (CMS). These ratings play a crucial role in helping beneficiaries make informed decisions about their healthcare options. For payers, Star ratings bring incentives to improve their services and member outcomes to achieve higher ratings.

However, recent developments in the Star ratings program are set to bring about significant challenges for many payers.

One of the most notable changes is the introduction of a health equity index in 2027. Social risk factors, such as income, education, housing, and access to transportation, can significantly impact individuals’ health outcomes. The health equity index aims to evaluate how well health plans are addressing these factors and working towards reducing health disparities among their beneficiaries. However, this presents signification challenges for payers.

Challenges in CMS Star Ratings

• Data Collection and Standardization: Assessing social risk factors requires reliable and comprehensive data. Payers will need to collect and analyze data from various sources to accurately evaluate their performance. Standardizing the data collection process across different plans and regions may also prove to be a complex task.

• Resource Allocation: Addressing social risk factors often involves implementing community-based programs, outreach initiatives, and partnerships with social service organizations. Payers will need to allocate resources effectively to support these efforts while balancing their financial viability and sustainability.
• Collaborative Approach: Tackling social determinants of health (SDoH) requires collaboration among multiple stakeholders, including healthcare providers, community organizations, and government agencies. Payers must foster partnerships and cooperation to drive meaningful change in social risk factors, which may require navigating complex networks and overcoming potential resistance.
• Long-Term Impact Measurement: Evaluating the impact of interventions targeting social risk factors requires a long-term perspective. Changes in health outcomes may not be immediately evident, requiring payers to invest in ongoing monitoring and assessment to accurately gauge the effectiveness of their efforts.
• Addressing Inequities: The health equity index aims to reduce disparities in health outcomes among beneficiaries. However, payers may encounter challenges in identifying and addressing specific inequities within their member populations, as these disparities are influenced by a range of complex and interconnected factors.

Other proposed changes to Star ratings:

• Limited Application of the “Better of” Methodology: In response to the COVID-19 pandemic, CMS allowed all contracts to use the existing disaster provision in 2022. This provision enabled contracts to choose the “better of” current or historical performance for most measures. However, in 2023, this methodology will no longer apply universally.
• Implementation of Upper and Lower Limits (Guardrails): Starting in 2023, CMS will implement annual guardrails on changes in cut points for non-CAHPS measures. Cut points define the ranges within which a contract’s score on a specific measure needs to fall to achieve each Star value. These guardrails will introduce more challenging cut points, potentially impacting the ratings of MA plans.
• Removal of Performance Outliers: In 2024, CMS will use the Tukey outlier deletion method to remove performance outliers from the calculation of non-CAHPS measure rating cut points. This change aims to enhance the accuracy of the ratings but may pose additional challenges for MA plans.

Medicaid Advantage Health Plans Need Modern Care Management

To mitigate negative impacts, Medicare Advantage plans must turn to modern care management systems that support the growing complexities of performance measurement programs. Payers should embrace these challenges and use them as opportunities for growth and improvement. The journey towards achieving higher Star ratings and ensuring equitable healthcare requires dedication, innovation, and a deep understanding of the diverse needs of the communities they serve.

To learn more about how HealthEdge’s GuidingCare care management solution suite can help your organization address the growing challenges associated with Star ratings.