Kaiser plays a starring role in CMS’ Medicare Advantage ratings

Any good news found in the release of the 2018 star ratings of Medicare Advantage plans was clouded a bit by the fact that the five-star category is predominantly made up of Kaiser Permanente plans.

So, even as both the number of contracts and number of enrollees in five-star plans offering insurance and prescription drug coverage rose in 2018, 72% of the covered enrollees are in Kaiser-run plans. It’s unclear why Kaiser was rated so highly while the total MA plan contracts receiving an overall five-star rating was stagnant, rising to 15 from 14, and the percentage of enrollees in five-star plans rose to 11.2% from 9.8%. Kaiser Permanente officials could not be reached for comment.

A CMS spokesperson said the dominance of Kaiser in the broad five-star category shouldn’t overshadow the fact that most Americans have access to several four- to five-star plans, with a four-star rating considered to be “above average” and five stars being “excellent.”

Still, the data released last week show that the number of Medicare Advantage plans that performed well in the CMS’ star-ratings program dropped slightly from 2017. At the same time, the number of insurers that receive certain ratings hasn’t changed significantly in recent years. The CMS bases the 2018 ratings on quality data reported in 2017 and 2016.

Although the overall number of four-star or higher plans dropped, more beneficiaries will be covered by the highest-performing plans in 2018 than this year, the CMS said. Nearly 73% of Medicare Advantage enrollees are in plans with four or more stars, compared to about 69% of enrollees in such plans for 2017.

The data also reveal a drop in highly rated plans with prescription drug coverage. About 44% of the 384 active MA plans in 2018 that also have drug coverage earned four stars or higher for their overall rating, down from 2017, when about 49% of the 363 active plans earned four stars or higher.

Richard Lieberman, chief data scientist at Mile High Healthcare Analytics, said it’s not surprising that the figures have remained largely stagnant in recent years. Higher performers tend to be companies that have the most experience in Medicare Advantage. Those with 10 years or more experience in a Medicare Advantage program accounted for about 21% of 4½-star ratings and 31% of four-star and 3½-star ratings. Insurers that invested in the infrastructure and culture to improve quality of care did so years ago and continue to perform at four stars or higher, Lieberman said. On the other hand, some insurers still haven’t made the investments needed to achieve higher performance.

The CMS also makes it harder every year to perform well on the various measures, which pushes out bad performers from the program, Lieberman said.

Plans earning at least four stars receive a 5% boost to their monthly per-member payments from Medicare, while those with lower scores receive nothing extra. The CMS bonus for a lot of plans is the “difference between profitability and not,” Lieberman said.

The bonuses have allowed insurers to foster plans with additional benefits that are appealing to beneficiaries.

In addition, the CMS found that the number of Medicare Advantage plans with Part D prescription drug coverage rose by 21 from 2017 to 2018. Medicare Advantage contracts have become a lucrative revenue opportunity for insurers with many increasing enrollees in such plans.

“More high-quality choices mean improved quality care and better customer service at lower cost,” CMS Administrator Seema Verma said in a news release.

For the first time, no insurers were labeled consistently low performers after just two were so designated in 2017. Low performers—plans with ratings of 2½ or fewer stars for three years in a row—can be terminated from the Medicare Advantage program.