The 2023 Medicare Advantage Star Ratings report the Centers for Medicare & Medicaid Services (CMS) published in early October 2022 shows significant, industry-wide drops. More than 140 contracts with a four-star rating or higher saw their rating drop for 2023, collectively losing approximately $3 billion in annual rebates. The number of five-star plans fell to 57, from 74 in 2022, and 37 plans received the lowest rating of 2.5 stars, considerably more than the two plans in this category in 2022.
UnitedHealthcare was affected the most, with its percentage of enrollees in four-star-plus plans dropping from 93% to 75%—followed by CVS Health and Centene Corp., where the percentage of enrollees in four-star-plus plans dropped from 79% and 49% to 30% and 3%, respectively. Not all plans saw a drop in ratings, though, and there are some bright spots. For example, Blue Cross and Blue Shield of Louisiana’s share of enrollees in four-star-plus plans rose from 47% to 94%, and Priority Health and Prominence Health Plan now have 100% of their enrollees in four-star-plus plans.
A closer look at the 2023 report tells us that the following factors had the most impact on ratings:
Removing the “better of” rule was the key contributor to the drop in ratings. The average industry Star Rating dropped from 4.37 in 2022 to 4.15 in 2023. Without the “better of” rule in place last year, the average 2022 rating would have been closer to 4.1, which would have made the 2023 ratings look like a marginal increase over 2022 ratings.
The increased weight of member experience measures helped limit the drop. Some analysts have also attributed the drop in ratings to the increased weight of member experience measures. But, according to our analysis, changes in weights helped overall Star Ratings as the drop in experience measures was relatively less than the drop in other measures. Calculating 2023 Star Ratings with the prior weights would have resulted in an average Star Rating of 3.77, which is significantly lower than the average rating of 4.15 with the new weights.
Medicare Part D measures had a higher drop in ratings. Medicare Part D measures, especially adherence measures, saw a higher decline in ratings compared to ratings in 2022. Six of the top 10 measures with the highest decline are Medicare Part D measures.
Sustained measure performance differentiated top Star Ratings gainers from Star Ratings losers. Not all plans saw a drop in their ratings; some plans saw a significant lift. Our analysis shows the plans that did well had more sustained measure scores or stars in the last three years (without the “better of” rule). Also, the more established and higher rated plans lost the most. The average 2022 Star Rating for the top 20 contracts that received a lower rating in 2023 was 4.2 stars, whereas the average 2022 Star Rating of the top 20 gainers was 3.6.
What can Medicare Advantage plans learn from their current Star Ratings?
Design member journeys with stars as a design principle. Star Ratings drops will likely prompt plans to focus on the measures that fell the most and come up with immediate steps to improve next year’s results. While implementing point solutions with next year’s Star Ratings in mind is understandable, plans should evaluate improvements in the context of the entire member journey and make the member experience a key design principle. Moving toward a Star Ratings-friendly member journey will insulate plans from disruption because of CMS rules changes such as the removal of the “better of” provision. And it keeps plans focused on the basics of a highly rated Medicare Advantage product: offering lower out-of-pocket costs, preventive care incentives, quality provider networks and care management programs that prioritize outcomes versus process.
Shift analytics focus from measure prioritization to implementation. Investing in achieving upfront analysis precision to forecast cut points and how much a measure needs to move to reach the next-higher Star Rating may be less effective than focusing on intervention design- and execution-related analysis. Especially with higher weights on experience and outcome-based metrics, intervention design analytics may be more important than a root-cause analysis that is more relevant to Healthcare Effectiveness Data and Information Set measures. For example, plans might be better served by determining the intervention with a higher lift to experience (using attribution modeling of intervention to impact), the segment of members for intervention (using segmentation and targeting techniques) or the key performance indicators and tracking mechanism to monitor the impact of these interventions.
Focus equally on sustaining higher Star Ratings and improving underperforming plans. Plans tend to spend more effort in figuring out how to improve ratings for underperforming plans, but Star Ratings drops for several higher rated plans in 2023 demonstrate that sustaining Star Ratings for higher rated plans is equally or more important, especially if they are large contracts from an enrollment perspective. Several plans saw Star Ratings drops for their large and better performing contracts: Aetna Inc.’s rating fell from 4.5 stars to 3.5 stars on its largest contract. Similarly, UnitedHealthcare and Centene saw their Star Ratings for contracts with more than 100,000 members fall from 4.5 stars to 3.5 stars and three stars, respectively.
CMS’ 2023 Star Ratings delivered a reality check for many plans after the COVID-19-related rules relaxations were rolled back. As plans conduct a root-cause analysis, they should look at the results not as a single year’s rating but as a reflection of the state of affairs for the last three years. And the improvement plans should have sustained and long-term performance, insulated from CMS rules changes, as a key design principle.