Struggling Medicare Advantage and Part D drug plans are being given a last minute reprieve, although they will need to show more improvement if they want to stay alive longer than a year.
The Centers for Medicare & Medicaid Services is delaying its policy of terminating Medicare Advantage and Part D plans that have had a star rating of less than three for three consecutive years.
The industry will "have to wait another year for a public hanging in Star Ratings Square," as consultant John Gorman, of the Gorman Health Group, put it.
In large part, CMS Medicare director Sean Cavanaugh said at a conference earlier this month, the agency is holding off because lower-performing plans are starting to give beneficiaries a better experience.
"We had planned to terminate some plans that were long-term low performers on quality this year," Cavanaugh said. "It is because of the improvement that we are seeing that we decided to postpone that for another year. We always prefer improvement over terminations."
Now, according to a recent memo posted by Gorman, CMS expects all of the dozen-plus MA and Part D plans slated for termination to "concentrate on improving the quality of care provided to their enrollees."
They "must focus on the overall healthcare needs of their individual enrollees, including improving enrollee experiences and ensuring that their enrollees receive needed clinical care," CMS regulators wrote. "These efforts should improve CAHPS, HEDIS, HOS, patient safety, and adherence scores. Organizations and sponsors should focus on all areas where the contract has received less than 3 stars."
CMS explained that plans must consider their member populations and target interventions at improving care quality.
The star ratings program has been fairly successful as a way for beneficiaries to make informed decisions and for insurers to gauge their progress and boost membership.
In the 2014 coverage year, three percent of Medicare Advantage plans scored at the full five stars, while 15 percent scored at 4.5 stars, 20 percent at four stars, 33 percent at 3.5 stars and 25 percent at three stars, according to an analysis by Health Pocket.
Only four percent were rated with less than 2.5 stars, and fewer than that were at such a level for three consecutive years, with collective enrollment of less than 250,000 seniors, according to estimates by Barclay's analyst Josh Raskin.
But those four-plus star plans, according to Health Pocket, have attracted more than 40 percent of all MA-covered seniors this year, compared to just 28 percent in 2013 -- proving to be a good signalling tool for seniors in the era of healthcare choice and accountability.