Last month, the Center for Medicare & Medicaid Services (CMS) issued a memorandum announcing a change pertaining to the effect of intermediate sanctions on the calculation of Star Ratings for Medicare Advantage organizations (MAOs) and Part D sponsors. This is a significant change for plans.
The Star Rating program has continued to evolve since being introduced by CMS in 2006, and is a part of CMS’s efforts to define, measure, and reward quality health care and member services. The ratings incorporate data from Healthcare Effectiveness Data and Information Set quality measures, Consumer Assessment of Healthcare Providers and Systems surveys, the Medicare Health Outcomes Survey, and CMS administrative data.
Beginning in 2012, quality/Star Ratings directly affected the monthly payment amount MAOs receive from CMS. First, CMS is required to make quality bonus payments (QBPs) to MAOs that achieve at least 4 stars in a 5-star quality rating system. In addition, the percentage share of savings that MAOs must provide to enrollees as the beneficiary rebate is tied to the level of an MAO’s QBP rating.