The recent publication of 2024 Medicare Advantage (MA) Star ratings confirmed that the regulatory and operating environment for this program will challenge health plans (especially compared to past years) as the Centers for Medicare and Medicaid Services (CMS) shifts its focus to program integrity and moderation of program spending.
This year was marked by several programmatic changes; the most notable being the application of the Tukey outlier deletion methodology, which had the impact of removing primarily low performing plans from the cut point calculation and shifting cut points to a higher range. While Tukey had a significant impact, we also noted several other challenges that impacted plan performance this year.
In this paper, we outline some of the major themes from our analysis of plans’ 2024 Star performance, highlight implications to health plans and identify areas of focus to improve and mitigate the impact from Star ratings.
The good news for the Medicare Advantage program is that while the number of plans below 4 Stars increased, the majority (74%) of MA enrollees are still in plans that are 4+ Stars in 2024; this overall distribution is relatively unchanged from 2023. Achievement of 4 Stars is a critical metric given the significant revenue boost that 4+ Star plans receive from the Quality Bonus Payment (QBP).
While the overall percentage of members in 4 Star plans remained the same, this came at the expense of 5 Star plans, as the number of plans with 5 Stars fell and more notably, the distribution of enrollees in 5 Star plans dropped precipitously from 22% in 2023 to 7% in 2024.
Star rating performance deteriorated regardless of plan type, albeit more pronounced for certain plan types versus others. Of note, Provider Sponsored Plans (PSPs) and regionals, which have traditionally had stronger Star rating performance, experienced the largest enrollment weighted Star rating change, significantly narrowing this historical advantage these plans types enjoyed over the Nationals and Blues. While not shown in the following tables, plan size also differentiated high vs. low performers, as plans with larger enrollment (>10K) had a significantly higher (0.5) enrollment weighted Star rating over smaller sized plans. We will continue deeper analysis of the impact of other factors on Stars performance, including benefit design, in future whitepapers.
Tukey played a factor in plan performance, especially for plans that did not prepare and model for this methodology change. To demonstrate the impact, we compared the average change in absolute measure performance to the average change in Star rating for each measure. The figure below shows the non-CAHPS measures that showed improvement in overall measure performance, but a decrease in the average Star rating for the same measure. This demonstrates a potential outcome of the application of the Tukey methodology, which is an increase in measure performance but shift in cut point so that measure improvement does not translate to Stars improvement.
We examined measures and trends across two cohorts: 1) Plans that lost their 5 Star rating and 2) Plans that have not yet reached 4 Stars, given the financial criticality of hitting this threshold. For both these cohorts, CAHPS was a common factor negatively impacting performance. While these measures are excluded from the Tukey methodology, the 4x weighting has an out-sized impact on overall Star rating achievement.
Among those plans that lost their 5 Star rating, there was a significant deterioration in CAHPS measures. Most notably, this cohort saw one or more Star rating decrease on Rating of Health Care Quality, Rating of Health Plan, and Rating of Drug Plan. This CAHPS Star performance trend was specific to those plans that lost their 5-Star whereas in aggregate the average CAHPS Star movement across all plans was near zero or saw improvement.
When reviewing enrollment weighted performance by carrier, we saw plans struggle with CAHPS questions related to access to care as noted by a more significant decline in performance for measures such as Getting Needing Care, Getting Appointments and Care Quickly, and Getting Needed Prescriptions.
For 3 and 3.5 Star plans, we see 2024 Star performance by CAHPS measure is consistently lower compared to the 4+ Star plans. However, we see the most consistent and dramatic difference in Star performance associated with CAHPS measures. For every 4x weighted CAHPS measure, the average Star rating was at least 1.0 lower than the average 4+ Star plan. This highlights the importance for plans to prioritize CAHPS initiatives to achieve a 4+ Star rating.
For each plan, the path forward must consider an analysis of current performance at the measure level, factoring in the intricacies of “Stars math” that changes each year and noting the continued flurry of future changes to the program such as the introduction / sunsetting of new measures and introduction of the Health Equity Factor in place of the Reward Factor. Analytical capabilities related to Stars have never been more critical for plans to develop to help model scenario impact and gain transparency on the impact of changing measures and cut points, especially in the face of methodology changes such as Tukey and cut point guardrails.
In addition to this specific Stars analysis and improvement roadmap, the following represent important areas of focus to not only maintain or improve Stars performance but also mitigate the impact that Stars may have on overall plan financials and operations.
Our team has an extensive track record helping MA plans achieve growth and performance goals.