The Centers for Medicare & Medicaid Services (CMS) has recalculated 2024 Medicare Advantage (MA) Star Ratings in light of recent court decisions about the application of the new Star Ratings methodology. This update has resulted in hundreds of millions in additional bonus payments to insurers next year.
Keep reading to learn more about the Star Rating recalculation and how this update will impact health plans and their quality bonus payments.
What are Star Ratings?
The CMS publishes Star Ratings each year to quantify the quality of health and drug services received by consumers enrolled in Medicare Advantage (MA) and Prescription Drug Plans (PDPs or Part D plans). Star Ratings occur on a scale of one to five, with five being the best, based on quality. Plans receive an overall performance rating as well as ratings in a few subcategories to help beneficiaries see if the plan performs well in a specific area that‘s important to them.
Higher-performing plans are rewarded. Plans that receive four or more stars are eligible for annual bonus payments from the CMS. The higher a plan’s Star Rating is, the higher the bonus received. The bonus payments help MA plans with member retention and acquisition, which can in turn increase profits for insurers.
How are Star Ratings calculated?
Star Ratings use five categories to impact their score, including:
- Customer service, including timely appeal decisions
- Managing chronic (long-term) conditions
- Member complaints and changes in performance
- Member satisfaction, including access to care
- Staying healthy, including whether members received various screenings, tests, and vaccines
Why are 2024 Star Ratings being recalculated?
In light of recent court decisions, the CMS has recalculated the 2024 Star Ratings for 2025 Quality Bonus Payment (QBP) purposes [1]. This recalculation has been made to address the application of Tukey outlier deletion and guardrails.
The Tukey outlier deletion method identifies and removes outliers from a data set before cut points are determined. The application of this method is done to stop statistical outliers from influencing cut points by removing extreme high and low scores, which impacts plan performance and their Star Ratings and quality bonus payments.
How will the 2024 Star Rating recalculation impact health plans?
The CMS recalculated the 2024 Star Ratings using the published 2023 Star Ratings cut points to determine the guardrails for the 2024 Star Ratings [2]. The CMS will update the overall star rating for plans with scores that improved under the recalculation and not those that would worsen.
As a result of the recalculation, more than 60 MA plan contracts from 40 insurers gained half a star, with 13 insurers reaching the four-star threshold to be eligible for the maximum quality bonus payment next year [3]. Plans that received a higher score could see significant improvements, including increased revenue for plans and better benefits for beneficiaries. It is important to note that the CMS is not announcing any policy or position with regard to the calculation of the 2025 Star Ratings, which will be issued in October 2024.
How LetsGetChecked can help health plans improve Star Ratings
LetsGetChecked’s member-centric solutions are built to help health plans close gaps in care, drive better outcomes, and improve Star Ratings. Our customizable solutions take into account the pain points of your members and are crafted to drive engagement from all individuals. Together, we can improve the member experience and close care gaps so your plan can attract and retain members and empower them to engage in preventive care and manage conditions.
References
- https://www.cms.gov/files/document/updateto2025qualitybonuspaymentdeterminations.pdf
- https://www.healthcaredive.com/news/cms-revised-medicare-advantage-star-ratings-plan-scores/720697/
