Reprinted with AIS Health permission from the October 14, 2021, issue of RADAR on Drug Benefits
CMS, in its recent release of 2022 star ratings for private Medicare plans, reported that the percentage of members in plans rated 4 stars and above rose for both Medicare Advantage Prescription Drug (MA-PD) plans and stand-alone Prescription Drug Plans (PDPs).
MA-PD plans’ performance is getting the most buzz — perhaps because an eye-popping 90% of current enrollees are in plans that will be rated 4 stars or higher in 2022, up from 77% of MA-PD enrollees in 2021. Still, PDPs’ year-over-year percentage increase of members in highly rated plans is also notable.
Last year, CMS said that weighted by enrollment, about 17% of PDP enrollees were in contracts that would be awarded 4 or more stars in 2021. And in this year’s fact sheet about the 2022 star ratings, the agency said that about 42% of current PDP enrollees are in contracts that received a rating of 4 or more stars.
Tom Kornfield, a senior consultant at Avalere Health, says he’s “not quite sure what accounts for the change” in the percentage of PDP enrollees in highly rated plans next year. But Melissa Newton Smith, executive vice president of consulting and professional services at Healthmine, Inc., tells AIS Health that “stand-alone PDP plans were artificially boosted by CMS’ Star Ratings COVID relief provisions, with plans reverting to the measure-level 2021 rating on average more than 30% of the time.”
All Part C and D contracts qualified for the “extreme and uncontrollable circumstances” policy for the 2022 star ratings as a result of the COVID-19 public health emergency, according to CMS. “Therefore, for most measures if a measure-level Star Rating is lower in the current year, the measure-level Star Rating (and numeric score) reverts to the rating (and numeric score) from the prior year.”
Meanwhile, the average star rating for MA-PD contracts in 2021 was 4.06, and that figure rose to 4.37 in 2022. For PDPs, the average rating rose from 3.58 in 2021 to 3.70 in 2022. Typically, star ratings for stand-alone PDPs tend to be lower than for MA-PDs and MA-only plans.
“That’s in part because the incentives aren’t the same for the PDPs as they are for the MA plans,” Kornfield says.
If MA plans achieve a star rating of at least 4 stars, they can obtain an additional bonus payment of 5%, and 10% in certain counties that are called “double bonus counties,” he explains. But “PDP payments are not impacted by their star rating — in other words, a 4-star plan and 2-star plan that submit the same bids to CMS would not be paid any differently.”
PDPs are also rated on fewer quality and performance measures than MA-only or MA-PD plans, according to a recent research note from Citi equities analyst Ralph Giacobbe. For 2022, MA-PD contracts are rated on up to 38 unique quality and performance measures, MA-only contracts are rated on up to 28 measures, and stand-alone PDP contracts are rated on up to 12 measures.
Regarding performance on individual measures, Smith observes that “within the Part D measures, both MA-PDs and PDPs performed well on all of the Medication Adherence measures, MTM [Medication Therapy Management], SUPD [Statin Use in Persons with Diabetes] and CAHPS measures. Much of this was fueled by operational flexibilities granted by CMS early in 2020 during the earliest days of the pandemic, and plans really stepped up and leveraged the CMS operational flexibilities in ways that manifested in these measurements.”
Before it released the 2022 star ratings, CMS unveiled the 2022 MA and Part D Landscape files, which detail the numerous plan offerings available next year and their premiums.
Kornfield says it’s notable that even though the number of MA plans available next year is rising in 2022 — as it has consistently in recent years — the number of stand-alone PDPs shrunk slightly in 2022 compared to 2021. This year, there were 1,490 PDPs, while that figure declined to 1,153 in 2022.
Payers Withdraw Standalone PDPs
“I think that’s really due to two organizations that have reduced their offerings, Cigna and Centene,” Kornfield tells AIS Health, a division of MMIT. Centene, in particular, may have scaled back some of its legacy WellCare plans after closing its acquisition of the smaller insurer, he suggests.
Still, “I don’t know [if] that has a significant impact on the marketplace in terms of the number of plans being offered, because it’s still a pretty high number,” Kornfield adds.
Despite the overall drop in stand-alone PDP plan availability, most states will see an increase in PDP options. There will also be a drop in average stand-alone Part D premiums, with 56 plans featuring monthly premiums under $10. In all but one state, Aetna’s SilverScript SmartRx Enhanced PDP will be the lowest-cost offering, with monthly premiums ranging from $6.40 to $7.80. As CMS had announced earlier this summer, the average 2022 premium for Part D coverage will be $33 per month, compared to $31.47 in 2021.
The agency also noted that more than 2,100 plans will participate in its Part D Senior Savings Model in 2022, with “over 500 new Medicare Advantage and Part D prescription drug plans” and two new pharmaceutical manufacturers joining the demonstration that offers lower out-of-pocket costs for insulin.
Kornfield says the addition of new drug manufacturers may have boosted participation in the model, as well as the fact that it’s becoming a “more mature” program. “Perhaps plans might have had a little bit of trepidation the first year, but they’re feeling more comfortable with it this year,” he suggests.