Coauthored by Rebecca Schwartz, Policy Analyst
In December 2022, the Centers for Medicare & Medicaid Services (CMS) issued a rule that proposes dynamic new policy and technical revisions to the Medicare Advantage program. The changes are in the “proposed” stage and still subject to commentary and public review before the rule is finalized.
The 957-page proposed rule includes policy changes related to medication therapy management, provider directories, prior authorization, coverage criteria, formulary changes, and more. Some of the more significant changes, however, are related to the Medicare Advantage/Part C and Part D Prescription Drug Plan Quality Ratings System—also known as Star Ratings.
Key changes to the Star Ratings include:
- Reducing the weight of the Member Experience measures
- Modifying the Quality Improvement measure “hold harmless” policy
- Introducing new star process measures
- Creating a health equity index reward
- Limitations on marketing of plans
Press Ganey’s policy analysts and payer solutions teams have pored over the proposed rule to understand how these changes impact our clients. We explain these changes in depth below.
Experience weighs less—but it’s still critical
One of the more significant changes in the proposed rule is the recommendation to lower the weight of Member Experience/complaints and access measures, beginning with the 2026 Star Ratings, which are based on measurement year (MY) 2024/CAHPS survey 2025.
In April 2018, CMS finalized a rule that increased the weight of Member Experience/complaints and access measures from 1.5 to 2. These measures include data collected from the Consumer Assessment of Healthcare Providers and Systems (CAHPS) survey and whether members are leaving the plan, appeals, call center service, and complaints. This increased even more in the June 2020 final rule, when CMS issued an increase from 2 to 4 for the 2023 Star Ratings.
Although CMS says it “still believe(s) these measures focus on critical aspects of care such as care coordination and access to care from the perspective of enrollees,” it's taken feedback from stakeholders into consideration and reconsidered its original position from the June 2020 final rule.
This change would not happen until MY 2024/CAHPS 2025. Until then, experience is still weighted at a 4, and billions of dollars are at risk for plans that do not improve their CAHPS scores. CMS estimates that this change to reduce Member Experience weighting will result in a 10-year Medicare savings estimate of $3.28 billion. A saving to Medicare means a reduction in plan quality bonus payments.
The bottom line for health plans: Health plans have recently invested heavily in predictive analytics and programs to engage healthcare providers to improve CAHPS ratings. Plans need to continue their efforts to improve CAHPS scores. Experience will always be an important factor to consider. CAHPS surveys are the backbone of the Star Ratings system, because happy, engaged members will always be more compliant with preventive care, chronic disease self-management, and medication adherence—and will be more likely to stay enrolled.
Modifications to Quality Improvement measure put millions on the line
CMS also recommended considerable changes to the Quality Improvement measure. Some analysts have suggested that this may be one of the more impactful changes of all proposed in this rule—and health plans are likely to push back against it.
The Quality Improvement measure is complicated. For starters, it holds the highest weighting in the Star Ratings at a 5, and it's based on plan performance and improvement across most of the star measures, including the CAHPS measures. For each individual star measure, CMS evaluates if there was a statistically significant improvement year over year. Those scores are added up to make the Quality Improvement score.
But this can be tricky. As plans improve their scores for star measures, it gets harder to produce a measurable improvement every year. This is why the Quality Improvement measure had a protection clause for plans with at least a 4-star rating—the “hold harmless” rule. That way, if a health plan that was typically highly rated didn’t improve across one or two measures year over year, its Quality Improvement score didn’t hurt it significantly.
Now, that rule is changing, and “hold harmless” will only apply to 5-star plans. Some estimates suggest that, with this change, 80% of health plans would drop from 4 and 4.5 stars to less than 4—and lose bonus payments worth millions of dollars. CMS estimates that this change to the hold harmless threshold will result in a 10-year Medicare savings estimate of $19.3 billion.
The bottom line for health plans: Calculate the Quality Improvement measure threshold for each applicable star measure. Many measures will need to improve less than the next star threshold. Focus on improving measures across the board. Have a strategy in place to evaluate each individual measure and determine what needs to happen to make statistically significant improvements.
Patient safety and health equity are focuses of new star measures
CMS promised new measures in specific areas, and it delivered in terms of new measures related to patient safety and health equity. Five new measures were added for Stars 2026/MY 2024—a record number of new measures added to any one measurement year. These measures will likely not come as a surprise to most health plans, as they've been on the CMS display page for years.
The bottom line for health plans: Many plans have, most likely, anticipated the addition of these measures and already established programs to make improvements. For those that have not, however, they have until January 2024 to develop programs for improvements.
Health equity is set to play a greater role in Star Ratings
In its effort to advance health equity for all, CMS has created the Health Equity Index (HEI) to better identify and address disparities in care provided to enrollees with a particular social risk factor (SRF). It’s important to note that the HEI does not replace the Categorical Adjustment Index (CAI), which was introduced in 2017 to address disparities among beneficiaries who receive a low-income subsidy, are dual eligible, and/or are disabled. Instead, it assists plans in better identifying, then addressing, disparities in care provided to members with a particular SRF and delivering outstanding care for underserved populations. CMS is proposing to replace the Reward Factor with the HEI. Many health plans have relied on the Reward Factor to push their plan performance above the 4-star threshold and receive a quality bonus payment. CMS estimates that this change to replace the Reward Factor with the HEI will result in a 10-year savings estimate of $5.13 billion.
This change begins with the 2027 Star Ratings, with data from MY 2025. The measures that will be evaluated for inclusion in the HEI will be addressed each year, but, in general, measures from HEDIS, HOS, and CAHPS will be included unless they meet one of the exclusion criteria. Most health plans have at least suspected that this change was on the horizon, and many have already started to work on reducing disparities, giving them a head start.
The bottom line for health plans: Health plans can contact CMS via the stars inquiry email address to obtain a copy of their Health Equity Summary Scores (HESS) report so they can put plans in place to close health equity gaps. Press Ganey Medicare CAHPS client reports can also breakdown member experience results by important equity factors, such as race and ethnicity, to help health plans shape strategies and address disparities. It’s important to develop a health equity strategy now and measure current performance so adjustments can be made before MY 2025.
Marketing changes highlight the need for digital solutions
CMS has the authority to review marketing standards for Medicare Advantage plans and to require changes. Under this new proposed rule, plans are required to notify enrollees each year—in writing—of the enrollees’ ability to opt out of phone calls about Medicare Advantage and Part D plan business.
The bottom line for health plans: This highlights the need for digital solutions that drive member engagement. Plans that have already developed digital solutions, or turned to external partners for digital solutions, are better prepared for this change.
Press Ganey’s team of experts is committed to staying abreast of policy and regulatory changes—and keeping clients in the know. Our payer solutions team can help health plans stay a step ahead of the game. Contact us today to learn how.