Trusted Knowledge and CMS Star Ratings: Their Nexus and Impact on Health Insurers, PBMs and Retail Pharmacy

Executive Summary

Modern history records no greater healthcare threat than Covid-19, and efforts in the United States to treat those afflicted with the new virus and check its spread profoundly changed healthcare delivery. The delivery of new information and the dissemination of knowledge has been the driving force for all impacted by Covid-19. Reflective of this upheaval, the Centers for Medicare & Medicaid Services (CMS) Star Rating System for Medicare Advantage (MA) and Part D plans saw a number of adjustments to its performance evaluations that, added to significant cut-point movement, caused a number of plans to receive lower ratings.

That, however, is not the point of this paper. Rather, our focus is on the fact that Star Ratings have been changing since their inception and likely will continue to do so while they remain in force. What hasn’t changed is the foundational needs of payers, providers, pharmacy benefit management (PBM) organizations, and retail pharmacies to work together within whatever constraints or opportunities to improve service to consumers. Chief among these critical needs is current, accurate, trusted knowledge – something hard to find in this age of misinformation. Only with the latest and best evidence-based knowledge can healthcare stakeholders work together to formulate strategies to achieve top ratings, deliver optimal patient and member service and engage and educate consumers in managing their own care.

Introduction

We remain awash in information, available at our fingertips and pushed to us in torrents. It is a collective issue, spread across individuals, enterprises and institutions, leaving each to determine the validity of the data and the dependability of the source. Perhaps nowhere is this quest more critical than in healthcare or more important for all its constituents – patients, caregivers, providers and insurers.

This paper encourages the pursuit of trusted knowledge with the proviso of unity in usage. That is because the maximum value of authoritative, evidence-based knowledge can be obtained only when all involved are using the same knowledge tools for clinical and drug reference and patient engagement and education. The truth is that, while piecemeal solution purchases may meet the needs of individual departments, this approach can cause unpredictable costs, confusion and potential harm while attempting to manage conflicting content from various vendors across the organization.

It also stands in the way of creating the tight relationship among patients, providers and payers that enables everyone to reap the benefits, with true integration creating strong bonds that help reduce variability in care, improve outcomes and promote greater patient engagement.

In addition, for Medicare and Part D insurers, evidence-based content is a powerful tool in achieving success under the Star Rating System, which is a critical part of doing business today and will be particularly challenging this year, given 2021 revisions and the impact of 2020 on healthcare. This makes the choice of a content partner a strategic decision that should be made at the highest levels to meet the needs of the entire organization and healthcare continuum. Moreover, that decision should be narrowed down to a single provider for maximum benefit.

As it relates to members, 81 percent of enrollees are in contracts with 4 or more Stars. In 2019, that figure stood at 69 percent.¹

We live in an era of misleading news and false information that travels faster than ever, with one click to find and disseminate what anyone has to say about anything. In fact, one study said, false information actually spreads more quickly than truth on social media platforms.² With the Covid-19 pandemic, we are seeing the most dire ramifications, with a marked rise in medical disinformation that the World Health Organization called a “massive infodemic” of myths, fake news and conspiracy theories, some of which are life-threatening. ³

At its worst, as one Duke Fellow put it, false medical news has “a body count.” ⁴

The effects of misinformation pose a critical challenge for healthcare, with the quest of knowing whom and what to trust impacting lives at the highest levels.

What it Means for Payers

To address this issue, multiple teams across payer organizations must have access to the same, most current, evidence-based information, inclusive of those involved in policy creation; those managing utilization and processing pre-authorizations, claims adjudication, and chart reviews; member/provider communication teams; and drug reference. Establishing evidence-based standards across all teams can help increase consistency and efficiency while reducing unwarranted variations. In addition, a continually updated platform can help them stay current with the latest medical advancements and protocols.

Using guidance from authoritative sources, payers can reduce unnecessary referrals, tests and procedures – saving money. And by ensuring all decisions reflect the latest evidence, payers can achieve the best possible health outcomes, improve cost efficiency and increase consumer satisfaction.

The Universe of Stars

Change is a constant with the Star Rating System, which makes navigating them a daunting task – especially after an unprecedented year for healthcare. As insurers entered 2020, they reportedly were focused on competitive issues and quality improvement, as more plans gained four or more stars and more and more Baby Boomers were aging into Medicare and increasingly selecting MA plans. Then came the real “boom,” with Covid-19 throwing typical healthcare out of its orbit.

The Role of Pharmacy in Star Ratings

Though Star Ratings are not assigned to retail pharmacies and pharmacy benefit management organizations, they play a key role and can feel the pressure as plans more closely scrutinize the performance of their network providers. It is also important to note that pharmacies’ role in improving medication safety and adherence is more critical than ever before. As trusted healthcare advisors, and pharmacists are expanding their role to influence the medical-use measures outlined in the Star Ratings, as they relate to medication safety and adherence.

In the Beginning

CMS originally created the Star Rating System in 2007, with the goals of driving improvements in Medicare quality and making insurers more accountable for the care provided. Under the system, health plans offering MA plans, Prescription Drug Plans (PDPs), and the combination of both (MAPD) are rated on the quality of care and customer service they provide to their members. Ratings range from one to five stars, in half-star increments, with five representing the highest possible ranking. These ratings are posted on the CMS consumer website, www.medicare.gov(opens in new tab/window), to help beneficiaries choose among the MA and MAPD plans offered in their areas during the Medicare open enrollment period each year. The ratings also serve as the basis for bonuses and enrollee rebates. Medicare reviews plan performances each year and releases new ratings each fall. Thus, plan ratings can change from year to year as can Star Rating parameters and methodologies for measuring results.

Benefits and Concerns

Today, 20 million Medicare beneficiaries (34 percent) are enrolled in MA plans, compared to 2012, when penetration was 27 percent, and plans with four or more Stars have risen from 24 percent to 73 percent. Five-Star plans’ enrollees receive the extras associated with quality bonuses (e.g., reduced premiums, additional vision or dental coverage, and other additional benefits)5, as well as highly rated service. That said, the System is not without its critics, who question its accuracy and methodology and point to industry consolidation in which poorer plans can be acquired by higher-performing ones, giving a sudden boost in the former’s ratings.

Stars and Covid

As noted, each year can bring change to evaluations and this year is certainly no exception. Given the disruptions caused by Covid-19 in 2020, CMS announced a number of alterations in the Star Ratings System. For instance, it removed the requirement for submission of 2020 Consumer Assessment of Healthcare Providers & Systems (CAPHS) survey data for Medicare health and drug plans, noting Part C and D plans may use any CAHPS survey data collected for their internal quality improvement efforts. It also announced that, for 2021 calculations, it will use last year’s HEDIS measures scores and ratings from the 2020 Star Ratings. For 2022 Star Ratings, CMS expects MA contracts to submit HEDIS data in June of 2021, and MA and Part D contracts to administer the CAHPS survey in 2021. A number of other changes were put in place to address the impact of 2020 on healthcare.⁶ Unfortunately, some of them caused a drop in ratings, which has added to criticisms of the system. Medicare health plans are rated on their performance in five categories:

1. Staying healthy: Screenings, tests and vaccines

2. Managing chronic (long-term) conditions

3. Plan responsiveness and care

4. Member complaints, problems getting services and choosing to leave the plan

5. Health plan customer service

Medicare drug plans are rated on their performance in four categories:

1. Drug plan customer service

2. Member complaints, problems getting services, and improvement in the plan's performance

3. Member experience with the drug plan

4. Patient safety and accuracy of drug pricing

Various formulae and weighting are employed by CMS to stars to assign scores to each contract for each individual measure, based on relative performance compared to other contracts, with the overall summary score for each contract calculated by averaging the star rating for each individual measure.