CMS created a STAR rating program to grade Medicare Advantage Plans. Plans are graded on a 1-5 “star” rating scale. CMS uses a five-star quality rating system to measure Medicare beneficiaries’ experience with their health plans and the health care system. This rating system applies to all Medicare Advantage (MA) lines of business: Health Maintenance Organization (HMO), Preferred Provider Organization (PPO), Private Fee-for-Service (PFFS), and Prescription Drug Plans (PDP).
The CMS five-star program is a key component in financing health care benefits for MA plan enrollees. In order to give beneficiaries help in choosing among an MA plan in their area CMS has posted plan ratings on the consumer website. The intent of the CMS five-star program is designed to promote improvement in quality and recognize primary care providers for demonstrating an increase in performance measures over a defined period of time.
The rating system on a range of quality metrics which consists of 53 measures that are weighted at 1, 1.5 or 3. These measures come from variety of sources which include the standard HEDIS, CAHPS (Consumer Assessment of Health Plan Providers and Systems) and HOS (Health Outcome Survey), CMS data, and independent CMS auditors. CMS performs a variety of statistical tests to translate these raw measures into STARS ratings.
The weighted average of these measures becomes the overall star score, which determines the quality bonus payment. Currently plans are eligible for bonus payment if they receive a rating of stars or more. The higher the star, the more the plan will receive in revenue from the government. Consequently, those plans with fewer than 3 stars consistently over the prior three years are flagged as low-quality on the Medicare website and additionally CMS will terminate contracts that are consistently low performing.
CMS bases the health plan ratings on measures in five distinct categories, which include; Member’s compliance with preventive care and screening recommendations, Chronic condition management, Plan responsiveness, access to care and overall quality, Customer service complaints and appeals and Clarity and accuracy of prescription drug information and pricing.