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Medicare Advantage Star Ratings Tied to Member Socioeconomic Strata

Medicare Advantage plans with a higher number of socioeconomically challenged beneficiaries are more likely to see lower star ratings.

Medicare Advantage plan star ratings affected by socioeconomic member conditions.

Source: Thinkstock

By Thomas Beaton

- Medicare Advantage (MA) health plans with a greater proportion of socioeconomically challenged members are more likely to have lower star ratings, according to new research from Brown University.

Insufficient risk adjustment criteria in the ratings framework may inadvertently penalize plans that serve low income, medically complex, or socioeconomically vulnerable individuals.

Currently, the star rating system evaluates health plans based on their chronic disease management offerings, customer service, and consumer satisfaction rates. Medicare Advantage plans are then ranked on a 1 to 5 scale based on these metrics. MA plans are only risk-adjusted if members are dual-eligible for Medicaid and Medicare benefits and if beneficiaries have a known disability.

The Brown research team found that the current star rating system does not add risk adjustment components based on a beneficiary’s race, neighborhood poverty level, or other social determinants of health (SDOH).

The team then risk-adjusted Medicare Advantage performance based on beneficiaries’ SDOH to see if health plans improved or declined in star ratings.

Nearly 20 percent of Medicare Advantage plans improved by at least one star rating for diabetes performance, 19.5 percent of plans improved by one star for cholesterol management, and 11.4 percent of plans gained a star for blood pressure management.

The team used key social determinants as part of their risk-adjustment framework due to the impact of SDOH on an individual’s health management skills.  

“To control diabetes, for example, you need things like good health literacy, access to healthy foods, and access to money that buys healthy foods,” said Shayla Durfey, the study’s lead author. “If you live somewhere rural and have a low-paying job, you have fewer healthy choices near you, and they’re often too expensive to consider.”

“The adjustments CMS uses do not fully account for true measures of socioeconomic status, such as income level, education and employment,” she added. “These factors have been shown to play a huge role in a person’s lifetime health.”

Medicare Advantage star ratings are significant for payers sponsoring MA plans. Payers that enroll a greater number of beneficiaries with SDOH-based healthcare challenges may be incorrectly viewed as a less successful health plan option than competitors.

Health plan performance indicators and star ratings can be a key marketing tool for Medicare Advantage plans. Star ratings inform enrollees about whether or not health plans can keep members healthy and provide adequate benefits.

Star ratings are publicly available to Medicare Advantage enrollees. Scores that are not adjusted for risk could mislead potential consumers, leaving payers with an incorrect reputation for quality and outcomes.

“Policymakers have focused a lot of attention on measuring quality and rewarding better performance among health plans and providers,” said Amal Trivedi, one of the study’s senior authors. “But in order for these quality assessments to be accurate, they need to take into account the characteristics of the populations that are served.”


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