Centene CEO releases plan for star rating turnaround in Q3 report
Photo: Morsa/Getty Images
Medicare Advantage Star Ratings declined this year as predicted prior to their release on October 6, but Centene said this week that the results were slightly worse than expected.
Only four plans received a low 2-star rating, compared to none last year in the 1-5 star rankings. All were Wellcare plans by Centene Corporation, according to the star ratings list released by the Centers for Medicare and Medicaid Services.
“While the final results were slightly worse than our internal expectations, the vast majority of the revenue headwind was known to us months in advance, as we share transparently with the investor community” Centene CEO Sarah London said Tuesday, October 25, during the Q3 earnings call.
London outlined “aggressive action” being taken to turn around results including: hiring an experienced chief quality officer; assigning strong operational leaders to manage key operations and administration programs; investing in new technology to enhance access to clinical data around gaps in care; and integrating the company’s platforms into a single workflow.
In addition, a newly installed management team this year added quality improvement as a key compensation metric for every Centene employee.
The goal is to achieve 60% of members in 4-star plans, London said.
The decrease in ratings impacts the 2024 revenue year, London said during the call.
WHY THIS MATTERS
The bottom line is star ratings are important to plans, not only as a way to attract new members when the results are good, but as revenue. Plans that do well get a 5% quality bonus payment. The money is used by insurers to increase extra benefit offerings, which attracts more enrollees.
Medicare Advantage star ratings were projected to decline this year due to CMS lifting COVID-19 guardrails and changing measures that impacted performance.
McKinsey & Company authors Cara Repasky and Sonja Pedersen-Green addressed the projected decline in star ratings in an article written in September.
Repasky, a partner in McKinsey’s Pittsburgh office and Pedersen-Green, an associate partner in Minneapolis, reported that the changes to the methodology used to calculate Medicare Advantage Star Ratings could make it difficult for highly rated plans to retain those ratings in 2023 and 2024.
Reached this week, Repasky and Pedersen-Green evaluated the ratings and what they see next for plan ratings.
This year’s ratings show that many of the 5-star plans seem to have figured out how to remain in the top spot. Compared to pre-pandemic 2019, there’s a larger percentage of high star plans, they said.
“There are more plans that have figured that out,” Pedersen-Green said.
Many plans not in the top rating are still struggling and plans that drop below 4 stars should be concerned, she said.
While neither Repasky or Pedersen-Green named specific plans, integrated plans such as Kaiser Permanente traditionally do well.
But there are other plans that, while not part of an integrated provider and payer-based organization, do well at integrating members within the care network, according to Pedersen-Green.
“We’ve seen a lot of plans that are highly integrated with their providers and have an outstanding member experience,” she said.
Patient experience is key as this year, plan scores declined based on CAHPS surveys.
Next year will be challenging due to Tukey methodology that will remove outliers and change the way plans are evaluated, Pedersen-Green and Repasky said.
Starting in 2024, Tukey will eliminate performance outliers from the calculation of star rating cut points – the ranges in which a plan’s score needs to fall to be assigned a star-level value. CMS is making it more challenging for plans to achieve the performance required to maintain or improve star ratings because outliers are more commonly found among poorly performing contracts.
“Our analysis suggests that MA plans could see an $800 million annual revenue impact from more challenging cut points,” Repasky and Pedersen-Green said in the report.
Repasky said this week, “The bar keeps rising every year due to regulatory changes.”
THE LARGER TREND
The Centers for Medicare and Medicaid Services erased the Tukey outlier statistical method in its May 9 Final Rule that took effect on June 28, according to Rise. The Tukey method is expected to prevent cut points from being influenced by outliers beginning with the 2024 star ratings.
The decrease in star ratings this year was driven by the expiration of certain disaster relief provisions put in place during the COVID-19 pandemic, as well as changes to measures. Four related to drug adherence got much harder, Jason Rose, CEO at AdhereHealth told Healthcare Finance News prior to the star ratings release.
This bonus for plans is most effective at the 4-star level, Rose said. At 4-and-a-half stars, there is no change. Within the elite of 5 stars there is no new revenue, but the plans can enroll members year-round, instead of just during open enrollment.
At 3-and-a-half stars, plans get some benefit having to do with drug rebates.
Below 3 stars, plans don’t get anything, Rose said. CMS can revoke the license of a plan rated below 3 stars for three years in a row and notify its members that they are in a low-performing plan.
Email the writer: [email protected]
Dallas Press News – Latest News:
Dallas Local News || Fort Worth Local News | Texas State News || Crime and Safety News || National news || Business News || Health News
texasstandard.news contributed to this report.