In this episode, we discuss the significant changes in the weight of Star measures, with the reversal of the 2022 Final Rule—many measures are returning to their previous weights. In response to the 2022 Final Rule, plans made significant investments to enhance the member experience in areas like customer service and developing digital platforms. The 2023 Final Rule has recently announced the removal of the Reward Factor and is replacing it with the Health Equity Index, which aims to incentivize plans to focus on serving members with higher social risk factors.
 

Although the removal of the Reward Factor may temporarily affect Star Ratings, plans that perform well for their underserved members will receive a bonus tied to their performance.

The point system and measure weights play a crucial role in plan performance for Star Ratings. The difference between a 4-Star and a 5-Star plan is often a very tight threshold. It’s critical for plans to adopt a dynamic approach that constantly evaluates the data and how it relates to the weight of the measures. Stars is a math game that requires constant analysis and iteration to strategically direct efforts and resources towards the highest impact.

While the upcoming changes are generating a mix of excitement and apprehension among plans, the focus remains on advocating for the members and achieving better outcomes.

Tune into this episode to hear valuable insights into the challenges and opportunities in the Stars program, and learn strategies in navigating the changes and improving performance.

Host: Today, we’re talking about Shifting Measures in Stars—Making the Quick Pivot with guest expert Michelle Simon. Michelle has over 15 years of experience in quality programs. She started on the commercial side with the quality rating system and transitioned into the Stars space, where she has spent the majority of her career. Michelle has a Masters degree in Organizational Leadership and a Post-Graduate Certificate in Healthcare Informatics and Data Analytics.   Welcome, Michelle.  

Michelle: I’m excited to be here!

Host: Michelle, there have been some significant changes in the weight of Star measures. It seems the 2022 final rule has been essentially reversed in some areas. Can you tell me a little more about this and how plans have received this information?

Michelle: A few years ago, the weight measurements were doubled from 2x weight to 4x weight for some of the operations and CAHPS measures that were focused on patient experience. This was pretty significant. So, as expected, plans invested heavily in those measures to help move the needle. Then, CMS proposed to walk back this change and reduce the weight back to a 2x weight. It’s interesting to see the shift. CMS indicates the shift is based on stakeholder feedback, and we all know this will impact (translate decrease) plans quality bonus payments. Some of the investments that plans have made are long-term. term, this is so significant that members are still going to be positively impacted because these are broader investments that can’t just be turned on or off.  

Host: Can you give a few examples of the types of investments that were made in response to the 2022 rule?  

Michelle: Yes. Plans invested in long-term programs. Member experience isn’t a small thing—it’s embedded in every facet of healthcare delivery. Some of the measures are plan-facing, and some are provider-facing. Plans had to change the way customer service teams interacted with members; they invested in member retention packages and member platforms to provide more digital experiences. I read a study about MA enrollment, and it said 1/3 of new enrollments used an e-broker as compared to just 5 years ago. This electronic shift was a big part of the member experience investment. Most MA members are reporting that they use electronic resources to help them understand benefits, manage their prescriptions, and navigate their physician networks. So delivering this digital approach to meet members where they’re at is considered essential to the member experience and is turning into table stakes. Then, plans invested in providers to make sure they have the tools and resources they need to support the members. That might look like ensuring providers have up-to-date technology for same-day visits and remote appointments or making sure providers are working with their PBMs to implement programs that allow access to care for members and things like lower co-pays. You know, different things to maximize value for members.  

At the end of the day, the digital enhancements were made and the overall effect is that members are getting a better experience because plans reacted to the measure weight increases. So even though the Stars weight has been redacted, the investments are already there and members are going to continue to feel the benefits of those enhancements.

Host: Let’s talk about the regulatory update that relates to the Reward Factor.

Michelle: Yes. CMS conducts an analysis of all Star measures across each plan. If a plan has high and stable performance, it can receive what’s called a Reward Factor. This provides plans with a Star Rating point increase that can range between .1 to a .4 increase. Adding a 10th, 20th, or 30th of a point can significantly boost the overall Star Rating. This is generally applied to plans that already have high performance. For example, if a plan has a 4 Star Rating, this could bump it up to a 4.5 Star range.  

But, this is scheduled to be removed in the 2025 measure year/2027 star year.  As a result, the Medicare Advantage plans are going to see a decline in their Star Ratings, and CMS will, of course, see an impact that would include extensive savings to plan quality bonus payments.  

Then, CMS is proposing to replace the Reward Factor with the Health Equity Index. This new index aggregates contract performance among the enrollees with social risk factors across multiple Star measures into a single score. This will be compared across contracts. What it does, is it takes these social risk factors like income subsidies or if a member had dual eligibility or if they have a disability and brings this into the scores. Plans that have a high portion of members that fall into that space and a positive HEI will get a lift to their overall and summary ratings and be rewarded. This is interesting, and you can see that CMS is trying to promote making sure that health plans attract the members who really need care. In a sense, this is replacing the Reward Factor. This will result in savings for the MA program, estimated at around 700 million in savings and about 5 billion over the following 10 years.

As a result of these changes, the removal of the Reward Factor will cause an initial decline in Medicare Advantage plan Star Ratings, but if the plans perform well for their underserved members, they’ll get a bonus tied to that performance.  

Host: So, the Health Equity Index is intended to counterbalance the removal of the Reward Factor?

Michelle: Yes. This is how CMS does things. They evaluate program and methodology changes and continue to make tweaks. We saw it with the disaster policy and the impacts of COVID. Plans were allowed to choose the better of their measures from the prior year’s performance or the year calculated during the disaster. They got to pick and choose which rating they wanted to have at the measure level. If you did great on a subset of your measures, you picked those. But if your performance declined, you picked the prior year, better-of performance. This policy inflated the Star Ratings. So, the market saw an unparalleled amount of plans with 4 Stars and hardly any plans lost a Star Rating, which is a natural fluctuation of the program. Because the disaster policy has been updated, it’s no longer applicable. We’re seeing plans revert back to their actual plan performance and the clustering methodology that CMS uses. Performance across plans declined, but it is expected to level out.

And the other thing to consider is that the bonus money is paid out off of the 4 Star plan and the enrollment of the plan 2 years later. Generally, most plans are growing. So, if a plan gets a 4 Star Rating this year and their enrollment doubles, it’s even better for the plan because the bonus will reflect that enrollment increase. CMS cannot continue to pay out at this pace. It’s unsustainable. So, CMS is continuing to move the yardstick, and this challenges and encourages greater and greater performance.  

Host: Let’s talk more about the point system and the impact of the different measure weights.  

Michelle: The overall premise of the Star program is a combination of 40-45 measures that span across 5 broad categorires.This includes outcomes, intermediate outcomes, patient experience, access, and process. Single-weighted, double-weighted, and there are even some measures that are up to 5x weighted. Which is great because plans know which measures have the greatest impact.

CMS has been shifting the rating contribution. HEDIS and pharmacy were very strong measures in the early years, and these are easier for plans to impact. For example, having members get a mammogram. There’s a definitive number. Maybe it’s 500 members that I want to get to a certain percentage. This guarantees high performance, and it’s easy to measure and monitor.  

But then, there are more difficult categories to move, like CAHPS, which is based on a member survey that goes out the year following the member’s experience. These measures started at a 1.5X weight. In 2019, they moved to a 2x weight, and then they moved in 2021 to a 4x weight. This steady increase in weight impacted the overall Star Rating and simultaneously decreased the impact of the HEDIS measures, which were more actionable and easier to move. Plans that were high performing in the clinical categories like HEDIS and pharmacy are being impacted because if they underperform in CAHPS, it’s going to have a higher impact to their overall Star Ratings. They’re not going to make up for it by having cancer screenings done. They have to make up for it with member perception, and we all know that’s difficult to predict and also difficult to move. Some other program changes that will bring some headwinds to Stars is the introduction to the Tukey Outlier Deletion. CMS uses a clustering methodology to calculate the cut points that determine performance across the program, and this deletion method will eliminate the impact that outliers have historically had on cut points.  

CMS doesn’t tell plans how they did until after they’ve compared the results to other plans. While we have really great models to predict, and we come pretty close, it’s still a challenge because there are some outliers. A few plans could have really poor performance, so the clustering methodology that’s applied to get the cut points really drags down the range. This can inadvertently decrease the industry’s overall performance. So, removing the outliers, this naturally shifts the clustering to the right and makes those thresholds harder to earn. This can help stabilize plan performance and the ability to do projections, but it’s also more difficult to accomplish. If there’s an instance where one plan gets 50% on a measure and they got a 1 Star, now everyone else starts at 70%, and that’s my 2-Star cut point. Then 80% is a 3-Star. If the 50% plan is removed, now my 1-Star starts at 70. The 2-Star is now 75. It just condenses the upper range of the cut points and makes it more difficult for plans to achieve higher performance.  

Host: Michelle, let’s go back and define a cut point and explain the scoring system.  

Michelle: A cut point is created based on the clustering methodology used to determine the statistically significant gaps between performance. It’s the level a plan has to hit to be given a Star Rating. If there’s a cluster of plans performing at 50%, then that’s a 1-Star. Then, another cluster of plans performing at 65%, that’s a 2-Star. Let’s say there’s a gap until 80%. CMS tries to find the most statistically significant areas of variation to define the Star Ratings, meaning scores in the same star rating are as similar as possible.  

Thresholds, another way of saying cut points, for CAHPS measures can be a single point measure, a single point variance. So, for example thresholds for customer service are 88, 89, 91, and 92. It’s just 1 point that differentiates a 4-Star plan from a 5-Star plan. This is a really tight threshold. That’s why it’s so important to outperform the industry just enough to get to that 4-Star threshold. It all drives down to that math path of strategically directing your efforts and resources towards the highest impact. You know, even if I get a 1-Star in one measure, maybe that’s ok, because I got a 5-Star in a more heavily weighted measure.

Host: I see. Strategically placing efforts in areas that are going to maximize ROI. You want to focus on areas that will move the needle.

Michelle: Exactly. Stars is very much a math game. There are a lot of inputs; we gather a lot of data. We model out our best predictions on where we think our data is going to land so we can secure a 4-point threshold, which is a 3.75 or higher. At a minimum, we need to hit 3.75 to make sure we’re considered a 4-Star plan. It’s very much a math game. I have to take the 40-45 measures, manipulate, and play with them to see which ones I need to move and by how much to get on the path to 4-Star. If I’m a 3-Star plan and I want to get to 4-Star, I’m going to evaluate the performance and say, “Ok, here’s my strong performers, here’s my mid-level, and here’s what I need to improve on. Then, I’m going to put some initiatives in play that focus on the areas of opportunity and focus on improving. If I need a lift in 5 measures that are at a 1-Star level, that might be enough to put me in the 4-Star range. But in most cases, I’ll need to get a calculated lift of a few measures across multiple categories. This is why it’s a game of playing with the numbers. You have to make sure you’re investing your resources wisely to obtain stable performance. We do this really well. On a monthly basis, we have documentation and reporting for our clients to re-evaluate and ensure we’re on the path to 4-Stars. This way, we’re constantly validating that the investment dollars are where they should be, and if we’re not where we want to be, we can put tactics into place and re-focus. Whether that’s initiating some internal process improvements to streamline member experience or focusing on more targeted interventions to improve clinical outcomes.  

Host: This sounds very dynamic, with constant evaluation, constant shifting, and iteration.  

Michelle: Yes, you have to pay attention to the data, it’s constantly changing every week, every month, and then, you have to consider that what we know today is based on how we understand the program, historically. CMS is constantly tweaking and approving regulatory changes that impact the math path, and that’s accounted for in our modeling. For example, if we think that CMS will remove a measure in the future, even though it’s not happening now, we have to think about what happens when this measure does go away. Especially if it’s a high-performing measure for a certain plan. We need to adjust the math path to accommodate for that potential loss in performance.  

Host: How do you predict the changes from CMS?

Michelle: CMS has a rule-making process that takes about 2 years. There are several different publications: an Advanced Notice and a Final Rule. But we truly do not know the full program until the technical specifications are published. So, we build different modeling scenarios to prepare for the whole spectrum of worst case to best case.

Host: What are the data streams that you’re analyzing?

Michelle: We have 5 main categories that we monitor: Clinical data, which includes clinical HEDIS and clinical pharmacy, operational data, and member perception data, which includes the CAHPS survey and HOS, Health Outcomes Survey. We also heavily monitor improvement, which is its own category. It takes a subset of all the measures identified and compares performance from last year to this year—and if you have a statistically significant increase, you’ll earn improvements. If you earn enough improvement across all measures, it’s a 5X weighted measure, so you’ll earn a higher Star for that measure. Conversely, if your improvement declines year over year, you’ll earn a Negative Improvement Factor and you’ll be rated lower. So, you might get a 1 or a 2-Star, which, at a 5X weight, hurts your overall Star Rating.  

Host: So, what’s the general perception coming from plans on the reversal of the member experience weight and these other upcoming changes?

Michelle: In the industry, the chatter seems to portray excitement, maybe a little bit of apprehension about so much change all at once. And significant change that we haven’t had in a long time. But, I’m really excited to be in this space right now to be able to work with the teams that I work with and to know that what we’re doing has a positive impact on our members. I think this is phenomenal. I think about my parents and they’re Medicare age and knowing that CMS is really trying to advocate for the members is encouraging and exciting.

Host: Michelle, thanks so much for joining us today and educating us on what’s to come in the Stars program.  

Michelle: It’s been awesome to be here. I love talking Stars.  

Host: To all our listeners, if you enjoyed this episode, follow us on Apple and share with colleagues on LinkedIn.