The Stars are Aligned
Chris Miladinovich: Hello, and welcome to ProspHire’s Soaring to New Health podcast. This episode is the Stars Are Aligned. I’m Chris Miladinovich, co-founder and chief strategy officer of ProspHire joined by my co-host, Dan Crogan. Principal and Senior Vice President of the Consulting Practice.
Dan Crogan: Chris, it’s great to be here with you. We’re talking Medicare Stars performance, and today our guests are Dan Weaver of Zing Health and Prospire’s Medicare Stars performance leader, Andrew Bell. Andrew, can you start by explaining what the Medicare Stars program is and why it’s important to the health plans and their members? You know, the Stars program is a quality rating system started by CMS.
Andrew Bell: Yes. Plans are graded on a 1 to 5 scale. There are over 40 measures that plans are judged on, ranging from a various set of domains. It includes operational functions, administrative functions, pharmacy measures, clinical measures that are tied to the HEDIS subset of measures, as well as member experience measures. You know, I think in some ways this system benefits both members and plans. I think from a member perspective, right, there’s a sort of grading scale where they can judge, you know, what plan is performing better than others, especially when choosing plans during AEP. And then on the plan side, and Dan, I know you can speak to this, a tremendous amount of potential with Stars on revenue, enrollment, benefit enhancements, and growth. Stars is tremendously important to plans as a part of their growth strategy.
Dan Crogan: Andrew, you mentioned we have a very special guest, Dan Weaver. Dan, I think our guests would love to hear how you got involved with Medicare Stars. You’ve helped many health plans, many members get better quality of care. Where did it all start for you?
Dan Weaver: I actually had the opportunity to start working on the Medicare Stars program in the Highmark Blue Cross Blue Shield family here in Pennsylvania, where you guys are based. It was really interesting because I came into the industry as an outsider. I had no experience in the healthcare space and was given the opportunity to learn about the Stars rating program right at a really sort of tumultuous time when CMS was making some very significant changes to the program and was forcing a lot of plans to reevaluate how they approached it. So I got the opportunity to learn by trial by fire and bring an outsider’s perspective, which I think has been really important for being able to find success in this program. Because at the end of the day, CMS has put a test out there for health plans to take. And sometimes success requires us to look outside the traditional box of, you know, our population health models, our clinical models, and really understand both the intent behind the program, as well as sort of those strategic methods to achieve success on the individual metrics.
Dan Crogan: You mentioned, whenever you got started, how would you compare that to now? There are a lot of changes coming out with Medicare Stars, CMS. This was one of the most interesting years in Medicare Stars. How would you compare now and whenever you started?
Dan Weaver: I have noticed a very interesting trend in health care in general, and it seems that every decade, we like to go through a little shake-up. So if you really think about it, the last time that CMS shook things up was about 2013. Now there have been metric changes, there have been some minor methodology changes along the way, but this is the first time in about 10 years where they’ve really turned the industry up on top of itself. There’s a lot of plans that were very surprised by some of the new technical changes that came out this past year. And I would be honestly shocked if there aren’t a handful of heads that roll this year because people weren’t appropriately prepared. But really, more than anything else, it’s good for the healthcare industry if you think about it. Because it forces people to continuously find ways to improve. To not just rest on their laurels and say, hey, this is how we’ve found success. It forces us to avoid complacency. So, it’s a very similar time in the sense that there are a lot of plans that are unexpectedly seeing negative financial impacts from key changes in the Stars rating program design. And that should hopefully spur a lot of competitive ingenuity, a lot of creativity and you should see a lot of plans really come out of this in the next year with a totally redesigned methodology and approach to how they find success in this program.
Andrew Bell: And just piggyback off that a little bit, I think for the audience, something to understand is that’s important. CMS spent a little over 12 billion this year in quality bonus payments. And that’s been a trend year over year that QBPs have just increased every year. There are more and more plans getting four-plus Stars. Frankly, that’s just unsustainable. And I think a lot of what we’ve observed in the industry coming from CMS, they’re aimed at making the program harder to succeed in. And to your point, incentivizing plans to do better in a more difficult environment. And I think that it again, to the later point you made, I’m really curious to see what others are doing in the marketplace over the next year to be innovative and curb some of those headwinds that are coming from CMS.
Chris Miladinovich: Everywhere I’m reading in the trades. Plans left and right are losing hundreds of millions of dollars in revenue and missed opportunities and missed bonus payments, and it’s tremendously impacting their bottom lines. These folks are probably most interested in what to do, but it sounds like we have a couple different cohorts. Those who’ve lost their rating, those that have their rating, and those are well positioned. What are some of the strategies that folks that just lost their ratings, what can they do?
Andrew Bell: There’s the foundational element. There’s the governance, the blocking and tackling, the accountability models, setting up interventions that are going to be effective to improve measures. And then there’s almost on the other side of the coin there, more of the advanced analytics, predictive analytics, member behaviors, provider, member engagement models, things that are a little bit more advanced than those foundational elements. So I think that’s where I would start.
Dan Weaver: When we look at the plans that saw the biggest negative impacts, it was because they were caught off guard. I mean, CMS hasn’t exactly been as crystal clear as they could have around Tukey. But in reality, that was something they’ve been communicating. They’ve demonstrated how it was going to impact things. They even published, this is what the world would have looked like if you’d applied this model. And still, we had plans that were not prepared for that, that they just didn’t understand that that was going to happen. What I’ve seen, conversations, sidebars, feedback from the industry, is that people just didn’t believe CMS was going to do it. So CMS has on multiple occasions communicated their intent, communicated how they intended to do things, and yet people still seem to be surprised.
So what I would suggest to anybody who is struggling with this, get outside opinions. That’s the reason that organizations and teams like yours should exist. People can have an interpretation about what the government is trying to communicate, what a specification change means, things like that. Don’t rest on your own laurels. If you hear other people out there saying something different, take the time to vet it. I would argue that anyone can make a mistake in this industry. And that is the reason that most of the organizations, like yours, have resources that work together to collaborate, to review, to compare interpretations, to seek outside expertise, and make sure that they’re aligned on what’s really happening. Most of the plans that saw a really negative impact this year, probably could have avoided portions of that if they had just been better prepared because they listened to the expertise that was being communicated.
Dan Crogan: You’ve been through almost every scenario. You’ve been at high-performing health plans, ones that have dropped and you need to get them back up, ones that have started off lower and getting them there. What does that mean for the members of that health plan and how does that impact them from a day-to-day basis whenever a health plan may be lower rating or not getting the rebates and the financial plans that they had for certain initiatives and impacts? How have you seen that impact them, but also how have you gotten them back to getting the care they need?
Dan Weaver: So, obviously the answer isn’t easy, because every plan is different. So if a plan has a wealth of resources available to fall back on, then they may be able to write out one year of impact to their financials and everything else and still offer rich benefits, still offer great programs and kind of reinvest to fix that. And so we’ll take a one-year financial hit but if you have, especially, a smaller plan, a startup plan, maybe a plan that’s only scraping a half a percent or a percent of margin on a year-to-year basis, their reserves might not nearly be as rich. So the first place that’s most likely to get hit when a plan is going to take this financial impact is going to be things like supplemental benefits or programs that are designed to really help ensure the success of those Stars ratings as well as just a general improvement in people’s health.
So, the answer for everybody is going to be a little bit different. It’s going to be based on whether that reserve exists, whether they’re able to ride out the financial impact for that extra year and get their ratings back to where it is. And unfortunately, some can’t. I mean, one of the first things that you see from some organizations after they’ve gotten their fourth quarter financials or third quarter financials is suddenly mass exodus of employees, you know, terminations, reductions in force, reductions in SG& A. Plans are trying to figure out how to right-size because that’s coming. Usually, it impacts bid design but you know, if the plans are strategic about it, if they have the ability to survive that one year of negative impact, it’s all about strategically reinvesting into the right initiatives, the right, you know, programs, the right structural integrity within your operating models. Things like that to address the problem before it exacerbates.
Chris Miladinovich: Dan, let’s say that an investor of a health plan or a board of health plans listening to this, which they’re having the ratings just come out and maybe their plan took a hit. What should they be thinking? Because a lot of folks think if a plan loses the rating, I’m going to lose all that money and, “Oh my gosh, I got to spend more.” I mean, that’s what naturally comes about. But why is it so important?
Dan Weaver: So the easiest way to answer that question, Chris, is because the answer comes out now they find out about their rating, you know, now, and they’ve only got weeks left in the per, you know, the calendar year we’re in. We’re in late October when we’re recording this, when we’re having this conversation. Plans have less basically than 10 weeks in this calendar year to affect getting people to their appointments, getting people to refill their prescriptions. So, the harsh reality is that if in this calendar year, they haven’t already been addressing that… they haven’t already been anticipating that they were going to see a decline in performance and they haven’t been doing the work to offset that, then you’re already tracking toward a two year hit. So that’s one of the biggest reasons it’s so important because everybody’s released their bid design well before they know what their ratings are. They’re going to put products out into the market right now during AEP and they’re going to try and recruit new membership in and really, you know, work over the next calendar year to service these people. But they’re in a position where they might already be facing a two-year deficit in finances because they weren’t prepared for this.
Chris Miladinovich: What does the board expect from the Stars program, not the CEO. What does the board expect?
Dan Weaver: So there’s a revenue impact at three and a half Stars, and there’s another revenue impact at four Stars. And there’s another revenue impact at four and a half Stars. Most plans, everybody says, “Oh, we want to be a five Stars plan.” There isn’t as much of a revenue impact at being a five Stars plan. All you get is continuous enrollment throughout the year. So the real expectation from most boards that I’ve seen in a company is get to four Stars. Yeah, at three and a half, you’ll start to see some rebate dollars. And depending on what type of a population you’re serving, that can be really significant or it can be a minor impact. But getting to a four Stars rating has such a tremendous impact on a plan’s revenue. And, you know, without that enriched supplemental benefit structure, without those extra dollars to throw it, even your core benefits, your formulary design, your provider contracts, et cetera, the plans just don’t have the financial integrity to be competitive.
So, an unsuccessful Star year… one, if you can recover from that, you’re okay. You have two, you have a third. It’s like sticking your neck in a noose. Your plan is not going to last.
Andrew Bell: To Dan’s point, it’s almost multiplicative, right? Because as plans, if plans lose their QBP, if they fall out of that four Stars range, they’re not able to offer those enriched benefits that in many ways plans will strategically design their product to support their Stars program. And so that’s why, Chris, going back to your original question, if I’m the, you know, the president of a board or a CEO, and I just got my rating and I found out, hey, I just fell out of four Stars. My first question is, well, what’s your chase season strategy look like? And what’s your cap strategy look like? Because those are the only two realistic opportunities to improve ratings left in this Stars cycle.
Dan Crogan: And Dan, you’ve been a part of, as we mentioned, some plans getting back into the four Stars, the QBP area. You’ve also been a part of sustained, high-performing plans. What are those health plans thinking right now to maintain it? What are they looking out for? And what’s really important to those health plans and those members?
Dan Weaver: The one thing I’ll say that I’ve seen from the most highly successful, continuously high-improving plans is a forward-thinking strategy. CMS has tried to do a good job of communicating out multiple years in advance of what their intent is. There’s a major shift coming in the industry in the next two years called the Health Equity Index. The plans that are highly successful, continuously strong performers, are already thinking about the things that they should be doing for that. So plans are looking at display measures. They’re reading into the intent, sort of trying to read the tea leaves of CMS to see, are they going to implement the specification change? Are they really going to add that new measure? Are they really going to take that thing away? They’re coming up with contingency plans to offset whatever they may or may not do, but they’re preparing for those things. So, you know, the plans have been resting on the laurels of an example of the reward factor that has been getting that artificial inflation to a four and a half or a five because they keep getting reward points every year. That’s gonna go away in a year. When the health equity index comes out, all of a sudden you’re going to see a shift toward plans that have more low-income subsidy and, you know, a higher percentage of minority populations, and that’s going to be what drives up the ability to achieve your four and a half and your potentially even five Stars ratings.
All I can say is they’re looking forward. They’re predicting where they think the cut points are going to fall based on good data. They’re predicting what the next technology is that’s going to come out and change the industry. They’re predicting what, you know, the new tweaks to medications or specifications are going to mean and they’re trying to proactively address those things. And they’re putting programs out into market that aren’t just going to have a 30 impact but are setting a foundation for the things that are going to impact 6 months, 12 months, and 24 months later. And to your point too, you mentioned it a bit here too, the Stars year isn’t a 12-month planning session.
Dan Crogan: Could you explain to our listeners, what does a Stars year really entail?
Dan Weaver: The easiest way that I can say this to anybody is that at any given point in time that you are thinking about doing something, you are potentially impacting three different Stars years. Your Haas surveys are conducted basically a year before service dates. Your service dates are conducted within a calendar year. And then the following year you still have all the operational things you’ve got to survive, including your CAP survey, your TTY foreign language testing. So at any given point in time, let’s just pick a month like March, you’re prepping for the Haas survey that’s about to come out that’s going to impact your Stars ratings in two years. You’re trying to get people to go to the doctor that’s going to impact your Stars rating that’s coming out in one year. And you’re facilitating both your TTY foreign language and getting ready for your CAHPS survey that are going to impact your scores in like eight months. So there are scenarios during almost every point of the year where the work you are doing could affect three different Stars ratings.
Dan Crogan: And Andrew, you’ve been a part of different aspects of when you get involved. From day one, you’re, you know, talk about a calendar year or a data year. Yeah. You know, what have you, what’s your experience been like with working with health plans from calendar year, data year, HEDIS, Stars year, revenue year. Tell us a little bit about that.
Andrew Bell: I think in many ways, it’s very confusing, right? I mean, Dan kind of just pointed out at any given point, you could be in three different simultaneous Stars, seasons, right? So I think communicating clearly to an audience, especially leadership. I find that the most success that I know that we’ve had at ProspHire working with clients is always when the leadership team is bought in.
If you don’t have leadership buy in at the highest of levels down, you know, to the SVP, VP level, you’re not going to be successful. And so you have to clearly communicate. Why you’re doing things, what season you’re in, so that you know, hey, if we need extra budget for a vendored service or I need my provider network to contract with this provider because these members are going there and they’re not getting the care that they need or whatever the scenario is, you need to be able to communicate that upward to your leadership so that they can take action. Stars is so critical to health plans from a revenue perspective, from a membership perspective, from a growth perspective, and there’s different lenses. The smaller regional growing health plan and then the national plan, but they both have just as much of an impact on those two sorts of cohorts of plans.
Dan Weaver: I’ve had the privilege of working with you, Chris, since before you even founded this organization, right? And I’ve seen you involved in Stars for many, many years. What I will say that I think is truly brilliant about your organization compared to many of the others that I’ve had the opportunity to work with or I’ve heard their pitches… I’ve seen their presentations. You guys are not micro-focused on solving one problem. Lots of folks come in with an angle. We’re gonna come fix your medication adherence, we’re gonna come fix your HEDIS performance, we’re gonna fix your operational element over here. You guys take a very personalized approach.
You do truly do something deeper than just a consultative assessment and spit out or regurgitate some, “Hey, here’s your action plan so we can walk away and let you at it.” I have seen your team roll up their sleeves and get involved with action. Actually helping people transform their performance at a truly grassroots level more so than most of the other organizations that do a similar type of work to what you do. I’ll also say that you guys have never shied away from bringing in external expertise. Whenever you need something that you don’t have you find the right people for that and you’ve brought them in to meet an individual Plans needs. I’m not even suggesting that… you guys are just a “We need a Stars expert. Let’s go find five of them.” You say that, “Hey, plan, you know, ABCD really needs this person that specializes in pharmaceutical support within a underserved community that has, you know, public transportation solution challenges.” And you go find that guy. So what I can say is that I’ve had the opportunity to work with you at four different companies now. And in every one of those scenarios, what you have brought to the table has looked different because you actually addressed what our needs were.
Chris Miladinovich: I think you both are very wonderful people, very talented, knowledgeable individuals in the Medicare Stars industry. And it’s a privilege and honor to work with you both. As we look to the future of this program, what headwinds or challenges the plans will face?
Andrew Bell: The Medicare Stars program is a highly regulated program by CMS and often introduces changes to the program that highly successful plans are aware of and plan for. First that comes to mind for me, weighting changes. CMS often adjusts the weighting value of individual measures or sets of measures and starting in Stars year 26 there’s going to be a regression from the CAPS measures and some of those administrative measures like disenrollment and complaints against the health plan. And those are going to fall from the four-weighted level that they’re at now back to a two-weighted level. And so you’re going to see a little bit more of a flattening of what domains have more or less value than others, where it sits today. The success of a plan is really reliant or contingent upon success and caps in those administrative measures.
And starting again in Stars year 26, there’s going to be a little bit more of a balancing. The next challenge on the health equity index, the removal of the reward factor. Several plans have succeeded because of the reward factor and the migration to the health equity index is going to be another challenge that plans need to navigate.
Dan Weaver: Let’s be clear. To get into the reward factor, and most plans are gonna know this right, they had to already basically achieve a four Stars rating anyway. If you don’t need a 3.75, you’re basically not getting a reward factor but what’s gonna happen is the government is trying to create some balance, some equity effectively for those plans that are addressing those underserved populations, those harder-to-impact populations by a lot of perspectives. And so the health equity index is really focusing on those people that are financially challenged or that are minority groups to make sure that we’re trying to create the same level of access, the same level of care and the same level of engagement with minority groups and people who are facing financial hardships. So when you think about exactly what’s coming up with the headwinds are the plans are going to face, you know, first headwind. CMS hasn’t even been clear about the specifications around the health equity index. So people are making a lot of assumptions right now based on maybe what a Medicaid plan has done in a certain state with a health equity measurement comparative or just what they expect the measures are going to really look for.
And so they’re starting to try and think about how they address those populations differently, how they engage differently, but they still don’t know exactly what the question is that CMS is asking in the test. They just know, generally speaking, they have to do good in a certain area.
Dan Crogan: And Dan, you mentioned a little bit about the populations, the different populations. How does that affect the health plan and their initiatives and how they manage their members and make sure their members get what they need? What are those different types of populations that are out there in the Medicare world?
Dan Weaver: My answer to the first part of your question is I think it affects things dramatically because there are a lot of different ways that you can analyze populations. I certainly couldn’t name them all. I will certainly say that race and ethnicity play a big part in that, Dan. People have looked at the data. Looking deeply into the information, we’re seeing that different cultures, different groups of immigration, membership cohorts, different cohorts within certain geographies, different cultures, just basically, right? They have historically different ways of looking at things: how people age, how we treat death, how we treat elderly. There’s just different approaches to that across cultures, ethnicities, etc. There’s lots of statistical data that talks about health conditions by population, by minority group, etc. All of those things play into those factors.
So, generally speaking, what are the groups? Especially if we’re thinking about things like the health equity index, it’s income. How does the income level that you have as a person, as a retiree, affect your access to care, and your availability to get care? If you don’t own your own vehicle, if you’re forced to use public transportation, if you have housing insecurities, all those sort of social determinants of health, people that are more impacted by those elements are certainly a cohort that, generally speaking, has less access to care or is harder to motivate, to engage, to, you know, get to drive to resolution.
Race and ethnicity play a part simply because those groups have different opinions about the care that they’re receiving, the way that they’ll engage. Do you talk to them in their native language? One of the biggest challenges I’ve seen a lot of plans face is do you actually engage with them in their native language versus just everything’s in English?
Dan Crogan: Dan, for health plans starting their journey in Medicare Stars, what are the initial steps that they should be taking?
Dan Weaver: Any new group that is, you know, any new health plan that’s trying to launch has a lot of options, operational elements that they have to account for, right? Just being able to provide those core functional things like paying claims, having a provider network, being able to facilitate onboarding for a member, producing their insurance cards, whatever.
What I would say that I’ve seen is that if you don’t incorporate, or infuse, is probably a better word, Stars into your DNA from day one, if you’re more hyper-focused on all those other things that you have to do and you aren’t thinking with that quality lens from the get-go, you find yourself in a position later on where you’re trying to figure out how to fix the things that you hadn’t accounted for. Right? You have to be able to address member complaints proactively. You have to be able to facilitate simple things like having the right foreign language translation services set up for your prospective salespeople. But really being able to infuse the engagement model with both your members and your providers from the get-go I think personally is just essential for any plan and especially new plans success.
If they want to be even in a position to be a higher performing Stars plan within the first four to five years.
Dan Crogan: Andrew, in your experience, what are the misconceptions and myths about the Medicare Stars performance that you’ve encountered and how would you address them?
Andrew Bell: I think in many ways, right, there’s a pretty common misconception that it’s really hard to succeed in SNP plans. In particular, DSNP, dually eligible special needs plans. In some cases, the C&ISNP as well, and I know Dan, you’ve had a lot of tremendous success in particular with DSNP populations, so I’ll throw it to you and kind of look to your experience there.
Dan Weaver: So, I guess my answer to that would be is that most people have this perception that managing a special needs plan is more challenging, Some people even have a perception that it, you can’t be successful there. You just have to accept that you’re going to be sub-four Stars performance. I mean, CMS adds extra measures that you have to complete. So, I mean, technically speaking, they actually make it more difficult for you to get to the same level of performance. But at the same token, they’re making concessions. They do a case mix adjustment under CAHPS measures based on your population. They are talking about moving to a risk-adjusted model with the medication adherence measures that would allow for those more chronic populations as those lower-income populations, et cetera, to potentially see a better result.
But most importantly, you know, we’re talking about the health equity index. We already talked about that. What I’ll say is that I think that’s a misconception in general because the people that try to apply the same approach to a special needs plan that they’ve applied to their other populations successfully, kind of go in thinking, this has worked, so it should work here. I think that’s the misconception. Special needs plans are just a different breed, that’s all it is. You’re dealing with different geographies, you’re dealing with different socio-economic challenges, you, in some cases, are dealing with different psychologies. You’re going to have more people that are dealing with behavioral health issues and things like that. It’s really about how you engage those populations and if you go into that eyes wide open, accepting that you might have to employ different tactics with that population. If you consider that to be more difficult, then absolutely that population may be more difficult to move. But you know, one of the more recent plans that I had worked with, we took an underperforming plan where the perception was a DSNP can never achieve four Stars. It’s just not possible. It’s not worth the investment. We were able to flip it to a four Stars rating in the first year, get it to a four and a half the second and keep it there.
“Keep it there” is the key element. Because if it was just a fluke, if we had been doing something that was just a quick one-off, it wouldn’t have lasted. Right? If you employ the right tactics, you engage the members the right way, and you bring the right solutions to bear, then it’s just a different approach. So, my perspective would be it’s, you have to understand your population, let data guide your decision-making, and bring solutions to bear that are going to be relevant to the population you’re serving, as opposed to ever thinking that there’s a silver bullet or that there’s a one size fits all solution.
Chris Miladinovich: Wow, what a really great conversation. Thank you guys so much for joining us today and thanks to our listeners. This was truly an insightful conversation. If you have any questions about Medicare Stars ratings and how you can increase performance, please visit our website, www.prosphire.com. Until next time, keep soaring to new health.