Medicare Advantage (MA) plan enrollment is at an all-time high.  In 2019, over 22 million people will receive benefits from a privatized Medicare plan, more than double the 2010 enrollment.¹ Understanding the changing current in healthcare economics will better prepare industry leaders to sail the waters and MA contracting is no exception.  MA contractors must show a better quality of care for the same dollars being spent, but what are the best practices to drive engagement, patient satisfaction, and quality of care ratings?

First, how does Medicare assess quality of care? 

This is a ringing question for hospital administrators across the country. Administrators must align their efforts of quality improvement, data collection, vendor contracts, and provider incentives with the MA reimbursements. This number amounted to over $250 million in 2019.

The overall star rating is the primary measure of success for Medicare Advantage plans. In a recent report, Milliman outlined the Medicare Quality Bonus Payments (QBP) and MA rebate star landscape.  The star ratings can mean big money both in terms of new plan enrollments and incentive payments from CMS.² For example, the impact of dropping from 3.5 stars to 3.0 stars is a 23% reduction in MA rebate revenue. If plans are measured on star performance, the same can be expected for reimbursement contracts.  A few key Milliman reporting findings include:

• CMS only uses the overall star rating to determine additional revenue or incentives. Overall ratings are determined based on weighted averages. A higher-weighted measure warrants more focus, placing a heavy emphasis on the Healthcare Effectiveness Data and Information Set (HEDIS) or the Health Outcomes Survey (HOS).
• Part C revenue is impacted in two ways for MA plans. First, Quality Bonus Payment as determined by overall star ratings. Second, the MA rebate, or shared savings, are determined by overall star ratings.
• Star ratings are a long-term process. For example, the fourth year of operations rating is based on data collected during a plan’s first-year operations.

Strategies for Hospitals to Align the Stars

Hospitals should align their existing and future efforts with the MA points of emphasis.  We’ve outlined several strategies that support boosts in MA star ratings and quality improvement initiatives.

Understand your population

No single source of data provides the complete picture of health for a population.  Hospitals must identify which patients are at the highest risk or which interventions are needed to prevent potential acute events.  This may require investment in population health staff, technology solutions, and long-term outlook on efforts.  The good news is a population approach can help with CMS Hospital Compare, Joint Commission, improve care, and drive brand equity with your population.

Identify care gaps

Identifying facility care gaps is an essential step in improving quality of care.  Three common issues are medication issues, lack of care coordination, and failure to address social determinants of health, such as transportation issues or food insecurity. Providers are a great focus group to insight into patient-related barriers and can be a great resource to tap into. Additionally, there are likely resources available in the community that can help address barriers. Providing adequate time and resources to educate hospital staff on community resources is a step in the right direction.

Engage your patients

Many patient successes happen when the patient is not in a doctor’s office.  The daily behaviors – positive nutritional choices, medication adherence, and exercise – are major drivers of outcomes and, subsequently, HEDIS outcome measures.  Investing in patient self-management and engagement technologies can help close the gap in care that occurs in-between visits.

Updated 8/2/2023

Written by Matt Allison, Senior Manager, Research and Grants