With Medicare Advantage squarely in the crosshairs of politics and Wall Street, the Centers for Medicare & Medicaid Services’ (CMS) recent updates to risk adjustment and Star Ratings have jump-started innovation, collaboration and modernization efforts nationwide. Health plans are seeing risk adjustment changes phasing in beginning in 2024 and many Star Ratings changes that were just finalized. Altogether, these updates increase the Medicare’s alignment with the National Quality Strategy, support the Biden Administration’s focus on health equity and begin adapting to the financial sustainability of the Medicare program which MedPAC continues to socialize to Congress.
After the last few months of uncertainty during the public comment period on several dozen high-impact proposals from CMS, we finally have clarity on most changes taking effect in 2024. Those plans who quickly understand and embrace that succeeding within the new needs of Stars is an existential leadership challenge, not a grass roots tactical assignment, will be the first, and fastest, winners. Now that CMS has released the 2024 Rate Announcement and Final Rule, here are three things to know and three things to do.
3 Things to Know
- Details matter. Accountability for health outcomes and health equity, which take effect almost immediately after the impact of Tukey cutpoint rebasing is publicly displayed this fall, will alarm executives and increase leadership focus on Stars. Stars teams will need to simultaneously manage leadership expectations while executing extensive, detailed changes to reporting, analytics, strategies and tactics throughout the organization.
- Member experience remains vital. The reduced weight of Consumer Assessment of Healthcare Providers and Systems (CAHPS) and administrative measures will tempt some plans to reduce emphasis on access and experiences. However, these measures remain mathematically important to the Improvement measures, Reward Factor and Health Equity Index. Even more importantly, struggles on these measures represent leading indicators of barriers to care that may lead to uncaptured, yet compliant, risk adjustment revenue and avoidable medical spending which are far more problematic than the risk they present to performance on other Star measures.
- Other regulations impact Stars performance. Many seemingly operational changes will impact Star measure performance. From digital health literacy screening requirements and telehealth education to requirements for translated and alternate-format materials and nuanced requirements to allow members to opt out of phone calls for certain sales- and marketing-related plan business, many departments will be implementing significant procedural changes. Any of those changes, if narrowly designed and implemented without a Star Ratings lens, could introduce new barriers to success. And when combined with the foundational impact of D-SNP de-consolidations and the Inflation Reduction Act, 2024 represents a seismic shift in Medicare Advantage operations which will impact Star Ratings performance.
The changes being implemented span provider behavior, vended services, member interactions and plan operations. Plans committed to success must start immediately, realizing that tiny tweaks and minor changes will be inadequate to ensure success.
3 Things to Do Right Now
- Modernize programs, budgets and workplans. Most plans have lots of baggage in their Stars workplans from measure-specific interventions and activities that met Star needs of that past, but which will become immaterial or obsolete with the new needs of Stars. Siloed, single-measure strategies and tactics are inconsistent with CMS’ playbook for success. This is a critical time to update and expand reporting and analytics, design and implement solutions for every technical change and new measure, and retire interventions focused only on single measures. Implement new leadership and governance to ensure new investments are flexible enough to be expanded and adapted to support more, and broader, multi-purpose scope with longitudinal measurement models as CMS continues evolving and updating the program.
- Make every day matter. The new needs of Stars requires a return to our foundation of Continuous Quality Improvement. The exponential power of incremental, sustained improvements far outweighs the value of any one single, perfectly designed activity. Academic-quality evidence justifying the return on investment of quality improvement activities will likely not exist for each new strategy or tactic we experiment with in 2023 and 2024 in the same way it did during the last few years. We must thoughtfully plan activities, do them, study the results, then activate any changes needed to improve results. Driving the nature and extent of change needed for immediate success will be limited by resistance to change, lack of education and the realities of corporate culture.
- Strengthen engagement and collaboration. In recent years, many plans eliminated their provider relations teams and doubled down on transactional interactions with members. Most provider contracts still do not contain legally binding terms to support the new needs of Stars, many incentive programs are still evolving very slowly to meet the new needs of Stars and few plans have a robust enough member engagement structure in place to rapidly fill this gap. Though some plans have replaced the high-cost human teams of the past with robust technology tools, many more have sustained the status quo without meaningful modernization. The constriction of risk adjusted revenues occurring simultaneously with expanded Star needs will require realigning personnel and technology spend with a carefully sequenced combination of near-term tactics and longer-term strategy internally, with providers and with members.
CMS has always emphasized that those who move the fastest, the most creatively, and with the least internal silos will thrive. Time and time again, we see that the plans that use CMS’ advance notification of changes as their runway to prepare for upcoming changes in advance of their effective date are those who most consistently, and least stressfully, earn 4+ Star Ratings.
If you are struggling to align leadership, staff, your board or your budget around the changes you know need to be made, you are not alone. Our team has spent early 2023 doing more education than ever for leaders, boards and staff of plans, vendors and providers. Our Stars Opportunity Assessments, Leadership Development Institute, Stars Learning Lab and Health Equity Accelerator programs are tailor-made for this critical moment of industry change.
We know how hard it is to succeed in Stars amidst the unknowns that accompany change when decisions must be made with no safety net and high-stakes consequences. If you need help to ensure success in 2023, call us. Our team has extensive experience and proven success during eras of change. We love helping plans achieve and sustain strong ratings. Email me at melissa.smith@healthmine.com for more information.