Since 2008, the Centers for Medicare and Medicaid Services (CMS) has published annual performance ratings for Medicare Advantage (MA) only, prescription drug plan (PDP), and MA and Medicare Part D (MA-PD) contracts, better known as Star Ratings. CMS uses a five-star rating scale to grade Medicare health plan quality. Initially, the Star Ratings system for MA plans, established in 2007, was envisioned as a tool to assist Medicare beneficiaries in selecting high quality plans.
Since 2012 CMS has tied Quality Bonus payments and other incentives to Star Ratings as well. MA plans are rated on defined quality measures: up to 33 are in effect for MA-only plans, and up to 45 are in effect for MA-PDP plans, which also offer prescription drug coverage. Star Ratings range from one to five stars. They are assigned on a contract rather than an organizational basis; that is, one insurer may have multiple contracts.
Among the issues involved in the design and administration of the Star Rating system are its dual uses. First, as a guide to consumers for selecting MA plans and secondarily, as a factor in determining MA plan incentive and bonus payments. This dual function means that CMS must be responsive both to consumers who want transparent results relevant to their purchasing decisions and to health plans that have concerns related to differences in populations and their ability to influence the performance being measured.
The average 2018 Star Rating for MA-PD plans was 4.1. Nearly three-quarters of MA-PD members are enrolled in a plan with a Star Rating of 4.0 or higher and since 2014, the share of Medicare beneficiaries enrolled in plans with Star Ratings of 4.0 or higher has increased from 52% to 73%. It is clear that CMS’s Star Rating program helps direct members to higher-rated plans.Click here to add your own text