Patient Satisfaction News

Why Medicare Star Ratings Must Account for Socioeconomic Status

The Medicare Star Ratings methodology needs to account for the social determinants of health, many Medicare Advantage plans say.

medicare star ratings

Source: Thinkstock

By Sara Heath

- Providing care quality transparency has been central to the medical industry’s efforts to supporting better patient care access and experience. To that end, CMS is host to Star Ratings programs, which allow patients to learn more about their Medicare Advantage plans.

But the Medicare Star Rating program may not accurately portray health plan quality, some Medicare Advantage payers say. The Star Rating methodology doesn’t take into account all of the mitigating factors that impact a payer’s ability to achieve quality outcomes, according to Erica Pham, vice president of Legal and Government Affairs at Medicare Advantage plan Clover Health.

The Medicare Star Ratings are a system by which CMS assesses and rates Medicare Advantage plans, thus helping patients or family caregivers make informed decisions about which plans they should select. The agency rates plans on a five-point scale using quality metrics, CAHPS data, and other survey data from healthcare beneficiaries.

“And then CMS determines cut points,” Pham said in an interview with “They do statistical analysis to cluster scores. The theory behind it on CMS' side is that they want to push all of the health plans towards better quality measures.”

In essence, CMS rates plans on a curve, Pham added. If all of the plans are providing quality care, the curve is pushed higher, making it more difficult to meet the five-star rating. This methodology intends to support continuous quality improvement in Medicare Advantage plans, Pham said.

READ MORE: CMS Releases Quality Star Ratings for Medicare Plan Patient Access

And although Clover Health agrees with that clustering and the general notion of quality data transparency, Pham said the payer has its recommendations. Foremost, these ratings need to account for the social determinants of health, or the social factors that impact a patient’s ability to achieve health and wellness.

“The biggest concern that we continue to have is related as far as the methodology that CMS has determined what satisfies a high-quality plan,” she explained. “The methodology as currently laid out doesn't incorporate geography, it doesn't incorporate socio-economic status.”

Patients experiencing the social determinants of health face more barriers to obtaining health, meaning they need more assistance from their health plans and providers. When a health plan must invest in providing food assistance programs in food deserts, they may not meet other quality metrics. That doesn’t mean it is a bad health plan, Pham said.

“We believe affluent areas, rural areas, and perhaps disadvantaged urban areas should not all be rated in the same way,” she asserted. “There should be some acknowledgement as far as the quality measures that it takes a different amount of resources in order to obtain the same health outcomes for the beneficiaries that you cover.”

Pham pointed out that these are issues that impact Clover Health. The Medicare Advantage plan covers a high proportion of black and Latino beneficiaries and numerous patients from low-income areas. Most of Clover Health’s members are from areas such as Newark or Trenton, New Jersey.

READ MORE: One in Five Patients Use CMS Star Ratings for Healthcare Decisions

Racial and socioeconomic disparities make it more difficult for Clover Health to yield positive care outcomes, Pham said, and the Medicare Star Ratings need to account for that.

To their credit, CMS knows about these lapses, Pham said. Clover Health is hardly the only health plan to have expressed a need for more social considerations in the Star Ratings formulary. Additionally, evidence suggests that the social determinants of health impact care outcomes.

But that acknowledgement makes the situation more frustrating, Pham added.

“One of the biggest concerns we have quite frankly is that CMS has acknowledged that the Star Rating and quality methodology does not incorporate socio-economic status factors,” she stated. “They have made strides to incorporate some factors.”

For example, 2017 updates created the categorical adjustment index, or CAI. The CAI factors in measures such as patients who are dual-eligible, have a disability status, or have a low-income subsidy.

READ MORE: How to Effectively Use the CMS Hospital Quality Star Ratings

“But CMS has acknowledged in past statements that this doesn't go far enough because it doesn't account for all of the additional nuances that come with providing coverage in different socio-economic areas,” Pham continued. “Those nuances include education level, or history of having health insurance, or language ability. It doesn't take into account any of those distinctions.”

Although it is promising that CMS has acknowledged these needed improvement areas and has even begun to address some of them, the pace of change is too slow, especially for a new Medicare Advantage plan such as Clover Health.

“We want to support every beneficiary and every provider that we can,” Pham said. “But because we have a history of providing services in typically underserved areas, it is a challenge to continue to offer these services in these areas when there are such economic barriers that are unintended through this quality methodology.”

CMS may be moving slowly because they are waiting for more data, Pham said. For example, Congress is set to receive a report from the Office of the Assistant Secretary for Planning and Evaluation (ASPE) in September. The report will outline the impacts of socio-economic status and quality measures.

That report has been two years in the making, Pham said, despite the fact that CMS and Congress have both already agreed that socioeconomics impact care quality outcomes.

“Nonetheless, we are waiting for any further external reports including this ASPE report to ensure that their methodology reflects the policy thinking,” Pham said.

There are some beneficial aspects to the Medicare Advantage Star Ratings, Pham stated. For example, contrary to other Medicare Advantage plans, Clover Health is actually in favor of some of the increased quality reporting requirements CMS now requires.

“We're actually very supportive of increasing data transparency to CMS,” she said. “We believe CMS should absolutely require more data from health plans because we are privileged enough to provide services and benefits to beneficiaries. And we think having that increased reporting will lead to more insights that may be helpful to CMS in providing a sort of broad understanding of what's happening to the population.”

But as CMS continues to require that quality reporting use the data to create the five-point rankings, it will be important that the agency puts that data into context, Pham concluded. This will ensure that the Medicare Star Ratings are fair and portray and accurate view of health plans in different regions.


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