New Avalere Analysis Shows Notable Increase in Medicare Plan Quality Performance

New Avalere Analysis Shows Notable Increase in Medicare Plan Quality Performance

Contact: Erica Garland, 202-745-5119, egarland@gymr.com

10.16.12

Washington, D.C. – According to a new Avalere Health analysis of the Centers for Medicare & Medicaid Services' (CMS) recently released data on plan quality performance, 28 percent of Medicare Advantage (MA) plans and 49 percent of stand-alone Part D plans (PDPs) improved their star ratings from 2012 to 2013.

"This is good news for Medicare beneficiaries," said Bonnie Washington, Avalere senior vice president. "In 2013, beneficiaries will be able to choose from a greater number of high quality plans that best meet their health care needs."

Of the 419 MA plan contracts that received star ratings in both 2012 and 2013, 119 improved their star ratings in 2013. At the same time, 50 MA plan contracts had lower ratings in 2013 as compared to 2012. For PDPs, of the 59 PDP contracts that received ratings in both 2012 and 2013, 29 improved their star ratings while six saw a decline.

CMS has created incentives for plans that increase their star ratings. For example, there are special enrollment periods for five-star plans and low- and high-performance icons on the plan finder website and CMS will now consider removing consistent low performers from the market.

For 99 of the MA contracts that improved their star ratings from 2012 to 2013, these gains will translate into a higher bonus payment applied to their benchmark for 2014. Among the 50 MA plan contracts with lower ratings in 2013 as compared to 2012, 40 of these contracts will see a decrease in their benchmarks as a result. In 2014, MA plans will be paid based on their performance on the 2013 star ratings just released by CMS.

2012 Score	Total MA contracts with ratings in 2012 & 2013	Number of MA contracts that improved in 2013	Number of MA contracts with higher benchmark bonuses in 2014	Number of MA contracts that declined in 2013	Number of MA contracts with lower benchmark bonuses in 2014
2	5	5	1	0	0
2.5	58	26	26	0	0
3	139	40	40	16	16
3.5	115	32	32	9	9
4	50	13	0	15	15
4.5	43	3	0	8	0
5	9	NA	NA	2	0
Total	419	119	99	50	40

Source: 2012 and 2013 Part C and D Performance Data. Available at http://www.cms.gov/Medicare/Prescription-Drug-Coverage/PrescriptionDrugCovGenIn/PerformanceData.html.
*The analysis does not include contracts that did not have enough data or were too new to be rated in a given year.

MA plans with ratings above 2.5 stars are eligible for increases to their benchmark depending on their star rating. Plans with 3 stars will receive a 3 percent bonus, plans with 3.5 stars will receive a 3.5 percent bonus and plans with 4, 4.5 or 5 stars will all receive a 5 percent bonus. Thus, the impact on plan payment from a star rating improvement is dependent on the plan’s previous and current rating. Additionally, high quality plans operating in certain counties are eligible to receive a double bonus.

In addition, Avalere found that plans were improving on all measurement categories. CMS groups the star ratings measures into three categories: process measures (e.g., cardiovascular care/cholesterol screening), patient experience and access measures (e.g., overall rating of health care quality), and outcomes measures (e.g., diabetes care/cholesterol controlled). Outcomes measures are weighted three times as much as process measures while patient experience and access measures are weighted 1.5 times as much as process measures. Comparing the average rating of measures from 2012 to 2013:

Of the 18 process measures, MA plans improved on nine of them (50%); of the 21 patient experience and access measures, MA plans improved on 12 of them (57%); and of the 11 outcomes measures, MA plans improved on five of them (45%).
There is one process measure for PDPs and PDP plans improved on this; of the 10 patient experience and access measures, PDP plans improved on seven of them (70%); and of the 10 outcomes measures, PDP plans improved on five of them (50%).

Avalere Health is an advisory services company whose core purpose is to create innovative solutions to complex healthcare problems. Based in Washington DC, the firm delivers research, analysis, insight, and strategy for leaders in healthcare business and policy. Avalere's experts span 170 staff drawn from the federal government (e.g., CMS, OMB, CBO, and the Congress), Fortune 500 healthcare companies, top consultancies, and nonprofits. The firm offers deep substance in areas ranging from healthcare coverage and financing to the changing role of evidence in healthcare decision-making. Its focus on strategy is supported by a rigorous, in-house analytic research group that uses public and private data to generate quantitative insight. Through events, publications, and interactive programs, Avalere also translates real-time healthcare developments into actionable information.

Learn more at www.avalerehealth.net.

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