The Centers for Medicare & Medicaid Services star ratings system is having the intended effect. The number of Medicare Advantage and Part D plans that received low-performing icons (LPIs) decreased from 39 in 2014 to just seven in 2015 and some carriers with low star ratings are voluntarily leaving the market.
Star ratings have increased in importance to MA carriers because a plan's base reimbursement rate is tied to its star-rating performance and CMS continues to apply pressure to plans to achieve higher ratings.

Plans that received fewer than 3 stars for the last three years are designated as low-performing plans and carry an icon on CMS's Medicare Plan Finder website, warning beneficiaries of the plan's status. Similarly, plans with 5-star ratings are designated as high-performing plans.

Among the top MA players in the country, UnitedHealth Group had 11 plans that received LPIs in 2014, and Humana had one. In 2015, two of the seven LPI contracts were UnitedHealth Group's Care Improvement Plus (available in Illinois, Indiana, Iowa, Nebraska, New Mexico, North Carolina, and Texas), and two were WellCare Health Plans (available in Arkansas, Louisiana, Mississippi, South Carolina, and Tennessee). The other three contracts were with Touchstone Health Partnership (New York), Centene Corp. (Texas), and First Medical Health Plan (Arizona).

In addition, of the seven contracts that received LPIs for 2015, all were special needs plans serving either dual-eligibles or those with chronic or disabling conditions. These are vulnerable populations who are difficult to care for and SNP star rating performance demonstrates a need to evaluate them at a different threshold. SNP beneficiaries are likely to be high utilizers of healthcare and cut into managed care organizations profits. Since lower star-ratings result in lower payments, this could lead to fewer SNPs being offered. One MCO has already seen the writing on the wall UnitedHealth Group is no longer offering its Medicare SNP in Michigan, which received an LPI in 2014.

It seems as if CMS is aware of the discrepancy. For 2015, the weight for quality improvement measures increased from 3 to 5, which should benefit plans serving these challenging populations.

SNPs aren't the only plans throwing in the towel. Excluding SNPs, 215 MA plans exited the market at the end of 2014, decreasing the number of plans being offered in 2015 by 3 percent to 1,945 (Kaiser Family Foundation website, accessed March 5, 2015).

Carriers leaving the Medicare Advantage market include BlueCross BlueShield of South Carolina. Its local PPO plan received an LPI in 2014, though the plan received a 3-star rating that year. Even though the South Carolina Blue plan dominates its commercial market, its MA plan was South Carolina's sixth-largest as of July 2014. The relatively low enrollment, the LPI, and the carrier's likely reluctance to make the financial investment to maintain an acceptable star rating likely contributed to the carrier exiting the market.

On the flip side, 16 plans (11 MA Part D plans, two MA-only plans, and three stand-alone Part D plans) received high-performing icons in 2015, compared to 11 in 2014. For 2015, three of the high-performing plans are SNPs and two of those are Kaiser Permanente products.  A total of five Kaiser plans received high-performing icons. What's interesting is that the high-performing plans are dominated by nonprofit organizations that are often vertically integrated, such as Kaiser, Group Health Cooperative, Gundersen Health Plan, and Martin's Point Generations. For many of those plans, the stars have been aligned since the ratings began. Time will tell if other plans can reach the same five-star heights.

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