Star Ratings are increasing the pressure on health plans and directly affecting their bottom line.
In 2012, the Centers for Medicare and Medicaid Services (CMS) began measuring Medicare Advantage and Part D prescription drug plans using the Star Ratings, a five-star system where one is the lowest is and five is the highest.
The Star Ratings are an easy-to-understand snapshot of a plan’s overall performance. These ratings are also used to evaluate five individual performance categories, including member experience and customer service.
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These ratings have a direct impact on a health plan in two important ways. First, CMS financially rewards and penalizes plans based on the ratings. Second, the ratings are consumer facing, potentially influencing customers on which plan they may select, directly impacting payer and provider profit and loss.
“CMS is very clear about the financial impact to plans when they do not achieve a four or higher STAR ranking,” said Kirit Pandit, president and CTO of VitreosHealth, a population health analytics company. “At the same time, rating systems in the past have not been very consumer friendly. The Star Ratings hope to change that by providing a clear indication about where a plan stands on this scale”.
Having a high Star Rating is more important than ever – and keeping it is most important of all. But that can be easier said than done. In order to earn and maintain a high Star Rating a plan must decide which measures and populations deserve the most attention – and that can change frequently.
Payers are seeking ways to stay ahead of this shifting healthcare landscape. One powerful option is using a predictive analytics program.
Plans that leverage predictive analytics are able to:
- Identify high-risk members before they become high-cost members due to unexpected hospitalizations, ER visits, lengthy hospital stays, etc.
- Pinpoint gaps in care that need to be addressed immediately before these gaps translate to poor outcomes
- Measure the performance and effectiveness of care coordination and outreach programs to ensure that investments are made in the right programs that have the greatest impact
In turn, using a powerful analytics program can help demonstrate quality results in a value-based care ecosystem.
“Star Rating is an annual process,’” said Jay Reddy, CEO of VitreosHealth. “Since population state-of-health (SOH) is constantly changing, providers and payers need to work hard to keep up their scores. A sophisticated predictive analytics platform can capture population cohort movements and changes in high-risk populations and provide the care coordination leverage needed between payers and providers to maintain a high Star Rating.”
However, with the number of analytics partners in the market, organizations need to be careful in their search.
“VitreosHealth provides an analytics platform for plans and providers to quickly calculate their predictive risk scores leveraging the EMR, claims, and socioeconomic data to identify which members are affecting the lower Star performance,” said Pandit. “Then, we deliver provider scorecards that show how well they are closing gaps in care based on the identified members. In addition, the Vitreos platform accepts clinical data in any format.”
A lower Star Rating can directly impact a plan’s bottom line. That’s true for Medicare Advantage plans now and soon the use of these rankings will expand. In July, the Obama administration plans to roll out an “overall hospital quality” Star Rating that reduces 62 CMS measures used to grade hospitals into a five star rating. A rollout of Star Ratings for certain plans sold on public exchanges is planned for the end of this year.
In order to remain successful in the future, plans need to focus on value-based care and member outreach. By improving member health and staying ahead of negative outcomes, populations will remain healthier and a plan’s financial outcome is directly impacted.