How Quality Improvement Measures and the Hold Harmless Provision Affect Star Ratings

The Quality Improvement (QI) measures have been a staple of the Medicare Star Ratings program to drive year-over-year measure improvement. Medicare Advantage (MA) plans often overlook the importance of the measures and significance of the hold harmless provision. With all the change for measurement year (MY) 2023 and beyond, plans need to pay close attention to how QI measures will favorably or unfavorably impact Star Ratings.

Calculating QI Measures

As a quick level set, the purpose of QI measures is to demonstrate how much the plan’s performance improved or declined from one year to the next.

• If a plan receives 1 or 2 Stars, it means, on average, the plan’s scores declined.
• If a plan receives 3 Stars, it means, on average, the plan’s scores stayed about the same.
• If a plan receives 4 or 5 Stars, it means, on average, the plan’s scores improved.

There are separate Medicare Part C and Part D improvement measures for MA prescription drug contracts.

• C25 is used in calculating the Part C summary rating of an MA-PD contract.
• D04 is used in calculating the Part D summary rating for an MA-PD contract.
• Both improvement measures are 5x weighted and will be used when calculating the overall rating.

The improvement change score is determined for each eligible measure by calculating the difference in measure scores between two Star Rating years.

• For measures where a higher score is better: Improvement Change Score = Score in 2023 - Score in 2022.
• For measures where a lower score is better: Improvement Change Score = Score in 2022 - Score in 2023.

For each measure, significant improvement or decline between Star Ratings years 2022 and 2023 is determined by a two-sided t-test at the 0.05 significance level:

• If Improvement Change Score Standard Error of Improvement Change Score > 1.96, then YES = significant improvement.
• If Improvement Change Score Standard Error of Improvement Change Score < -1.96, then YES = significant decline.

Track, Monitor and Forecast QI Measures

Triple check your Star Ratings dashboards to ensure they include both the Part C and Part D QI measures and that they are being calculated accurately with the right measures and the right weights. The measures and formulas for the improvement measures can be found in Attachment H of the Medicare 2023 Part C & D Star Ratings Technical Notes.

Then review your rates and prioritize 2023 improvement tactics on measures with higher weighted values for Star Ratings. Monitor improvement and tweak your third and fourth quarter tactics or as needed based on performance. This may involve re-educating key stakeholders on the methodology of QI measures and require review in your Stars committees.

Hold Up, What? Understanding the Hold Harmless Provision

Centers for Medicare & Medicaid Services (CMS) snuck a subtle change in the proposed rule to the hold harmless provision for MY2024/Stars Year (SY) 2026.

Overall: CMS proposed to change this “hold harmless” to only apply to 5.0 Star contracts and no longer for 4.0 and 4.5 contracts.

The hold harmless provision for individual measures proposal states that if a contract demonstrated statistically significant decline (at the 0.05 significance level) on an attainment measure for which they received 5 Stars during both the current contract year and the prior contract year, then this measure will be counted as showing no significant change. Measures that are held harmless as defined by CMS will be considered eligible for the improvement measure.

What does this mean for 4.0 and 4.5 Rated Plans? The individual measures that a contract consistently obtains a 5-Star rating in will be included in the denominator and a N/A or zero in the numerator for the calculation for the QI measures. Therefore, these measures will have a negative impact on the overall scoring.

If a plan is doing well year-over-year in a measure, the proposed change could be good since the plan no longer needs to use scarce resources and investments to keep improving, such as for the colorectal screening or breast cancer screening measures that the 5-Star cut point has hit a ceiling.

Note: Plans could end up with an N/A for the QI measure if not enough measures count.

The change could negatively impact plans due to the lower number of measures that are counted in the formula of number of improved versus the number of decreased. It will be different measures for each plan and since the QI formula focuses only on improvements versus decreases, therefore a small number of measure changes will have a dramatic impact on a plan’s score.

If you are in a 4- or 4.5-Star plan, you need to monitor this closely and comment to directly to CMS on the proposed change to the provision by February 13, 2023. Healthmine can help you understand what proposed rules and future confirmed regulatory changes mean for your health plan and your members. Reach out at Kimberly.Swanson@Healthmine.com to learn how you can use CMS changes to your benefit and get to the next Star level.