MedPAC Seeks Changes to Medicare Advantage, Star Ratings Metrics

In the Medicare Payment Advisory Commission’s (MedPAC) annual June report to Congress, the commission designed the Medicare Advantage value incentive program (MA-VIP), a new set of quality measures for the Medicare Advantage star rating system to replace MA quality bonus program. The replacement seeks to decrease Medicare Advantage (MA) crosswalking or plan consolidation, particularly by larger payers.

The core developments include the plan’s peer-grouping methodology and budget-neutral funding.

MA-VIP will base quality measurements on local markets, not service areas as under the MA-QBP.

The quality measurements would be “prospectively set” in five major, assessable domains of healthcare set on a scale from 0 to 10. Each domain contributes 20 percent to the final score.

The commission offered the following as major indications of quality: avoidable hospitalizations, avoidable emergency department (ED) visits, readmissions, patient experience, and patient-reported outcomes.

MedPAC set data-gathering guidelines for each domain. Noting the challenges that the differing metrics for fee-or-service (FFS) and MA create for researchers, they recommended drawing from three sources: encounter data from MA plans, beneficiary-level patient experience data, and beneficiary-level patient-reported outcome survey data — using the MA plans’ submissions to the CMS and administrators, Consumer Assessment of Healthcare Providers and Systems® (CAHPS) surveys, and the Health Outcomes Survey (HOS) with significant improvements to the latter two.

The commission also suggests alterations to encounter data diagnosis documentation in order to make it more comparable to FFS (ignore supplemental diagnoses).

For measuring avoidable hospitalizations and avoidable ED visits—the latter of which has three available tools that have never been utilized on behalf of Medicare quality incentives programs—the commission has been working with contractors to develop software that fit the MA-VIP’s needs.

Readmissions can be assessed with the hospital value incentive program (HVIP) model. The HVIP model, as it is described in chapter 15 of the Commission’s March 2019 report, can also be used to account for social risk factors on the local market level.

To assess patient experience, MA-VIP will rely upon a common method, CAHPS. However, the score will reflect a composite of all seven MA-CAHPS measures: needed care provided, swift appointments and care, customer service, health care quality, health plan quality, prescription drugs provided, and care coordination. This will provide a more holistic and detailed analysis than using an overall or subset to score.

Patient-reported outcomes will rely upon the HOS, but the MedPAC recommends acquiring a greater number of surveys to increase reliability.

The commission dedicated a couple of pages to detailing these measures out of distrust toward the current MA-QBP quality measurements, which allow for plan consolidation to raise star ratings.

The Congressional Budget Office (CBO) supported this notion in their December 2018 report, outlining the general criticisms of the present Medicare Advantage quality bonuses system.

The report stated that the benchmarks and double-bonus designations failed to indicate quality-related cost fluctuations. Due to the nature of the current system, this may amplify geographic disparities across counties and regions as a result. Since the MA-QBP starring system applies to the whole plan largely independent of geography, a five-star rated plan may be available in both Minnesota and Florida, for example, but in reality the two may not be comparable in cost or quality.

Also, quality bonuses benefit higher-quality plan enrollees but cause increases in Medicare Part B premiums.

Furthermore, the quality bonuses may not be truly rewarding quality, the CBO indicates. Lacking strong medical records and methods of tracking patient outcomes, some high-quality plans may be underrepresented.

Demographics may impact perceived success in less affluent regions.

Plans may promote targeted investment in areas that influence quality scores, but neglect other areas affecting overall quality.

Lastly, CBO noted the crosswalking loophole in which insurers can transfer beneficiaries from a low-scoring plan to a higher-scoring plan without changing quality in order to obtain higher quality bonuses. This practice has been enacted by some of the largest payers in the system, including Aetna, Humana, UnitedHealthcare, and others according to a March 2018 report in the Wall Street Journal.

In this month’s report, MedPAC responded to CBO’s suggestion to eliminate the MA-QBP by proposing a budget-neutral payment pool. The pool would consist of a certain percentage of each MA plan’s payments, tied to each peer groups’ payments, and would be stratified by fully dual-eligible beneficiaries and non-fully dual-eligible beneficiaries.

Using MedPAC’s six-step process, payers can determine their peer group’s payment based on the specific market and their peer groups of beneficiaries.

By dissolving the MA-QBP, CBO predicted that expenditures would drop by $94 billion from 2021 to 2028.

As an additional benefit, MedPAC claims this approach would reduce Part B premiums.

MedPAC has submitted this report to the Center for Medicare and Medicaid Services (CMS) for their consideration.