Do MA Plans Deliver on Quality?
MA plans are incentivized to deliver quality, but are they doing it?
A Quick Look at the Literature
I always like to start by looking at the published literature. A large retrospective study published in JAMA by Cohen et al in December 2022 reviewed historic claims data from over 300k individuals who were either enrolled in MA or FFS in 6 states (see reference 1). The study analyzed a cohort with a diverse age range and a slightly higher percentage of women. The MA model was found to be associated with higher quality and efficiency in all eight metrics studied compared to the Fee-for-Service model. This included lower odds of inpatient admission, emergency department visits, avoidable emergency department visits, 30-day inpatient readmission, and hospitalization for certain conditions.
Another study published in Health Affairs by Landon et al in April 2023 found similar results.
They reported that MA has consistently delivered higher-quality care than traditional Medicare, despite growing enrollment. In 2017, MA health maintenance organizations (HMOs) outperformed traditional Medicare on all measures, with patient-reported quality measures showing improvement. MA preferred provider organizations (PPOs) also performed at least as well as traditional Medicare. Notably, utilization rates for services like emergency department visits and certain surgeries were significantly lower in MA than in traditional Medicare.
A few studies do not prove the hypothesis that MA plans are effective at enhancing quality (or more accurately, for those statisticians out there: to reject the null hypothesis that there is no difference between MA and FFS outcomes). But the trend is strongly in favor for positively viewing MA plans for enhancing quality. How about more data? Let's look at how CMS rates plans based on outcomes and surveys of member experiences.
What The 5-Star Program Has to Say About Quality
As mentioned in my prior blog, the 5-Star rating system provides us a way to comparison shop between plans and view their performance. Looking at the Star ratings from 2022 and 2023 we can see the ratings and also some trends.
The following table breaks down the overall 5-Star rating score into its 5 components, or domains as CMS calls them. Each value represents the entire average across hundreds of MA plans.
First thing to note is in the 2023 reporting year all the star ratings are below 4 stars on average except for Customer Service. For trends, we see that MA plans lost star ratings across the board in every domain from 2022 to 2023. The worst performance was in Member Complaints, where on average plans dropped 15.1% in 5-Star ratings. This is bad news for those plans, because these scores are weighted much higher than the other domains in calculating overall 5-Star ratings.
Table 1. CMS 5-Star Rating Results from 2023 and 2022 for each of the five component domains that are used to calculate overall 5-Star ratings. Source: Author’s analysis of data from CMS Report Card Master Tables for each year.
Member Experience, Member Complaints, and Customer Service are all important measures if you are a MA plan subscriber. However they do not correlate to the measures the studies reported at the top of this blog. If one is only concerned with readmissions, ED visits, and "certain surgeries", then you are more focused on the first two domains (Staying Healthy and Managing Chronic Conditions). Here the average plan lost some ground, with the great majority of them earning the same number of stars as the prior year. However many plans lost stars in Staying Healthy domain.
Let's drill into that to see why.
Drill Down into Star Rating Measures for Staying Healthy
The table below shows the measures used to calculate the Staying Healthy domain and the scores for each. The only measure that improved in 2023 was "Monitoring Physical Activity", and all others had fallen. Given the low score for Monitoring Physical Activity in 2022 (average of 3.04 Stars), plans likely focused some attention in raising that score. Unfortunately the other measures for cancer screenings and flu vaccine rates suffered.
Individual star rating results for HD1 measures. Source: Author’s analysis of data from CMS Report Card Master Tables for each year.
Kaiser Family Fund estimated that $13 Billion in quality bonus payments (QBP) will be paid this year to MA plans (see reference 3). Based on the raw data in the above table, one might be confused if such payments are well justified if they are intended to reward delivering quality. If breast cancer screenings and annual flu vaccine rates are going down compared to 2022, and the overall domain scores seem headed in the wrong direction, how are such large bonus payments possible?
One can't focus on the individual measures as CMS rules dicatate that bonus payments are based on the overall score. An entire blog would be required to outline how CMS calculates these bonus payments. For now, it's enough to know that MA plans that achieve an overall 5-Star Rating of 4 or higher are eligible to receive a QBP. For 2023, the higher scores in the Customer Service domain seemed to help lift many plans into the bonus level (total score above 4).
A View from a Healthcare Provider CEO
Dr. Steve Gordon, the CEO of Bend, Ore.-based St. Charles Health System says this to say about quality being delivered by MA: "The reality of Medicare Advantage in Central Oregon is that it just hasn't lived up to the promise. A program intended to promote seamless and higher quality care has instead become a fragmented patchwork of administrative delays, denials and frustrations," (see reference 4). This one viewpoint is not isolated, one recent news headline suggested that hospitals are starting to drop dropping MA plans more frequently (see reference 5).
Dr. Gordon is referring to the administrative burden that provider organizations must face when serving cohorts of MA patients under a contract with a plan sponsor. The reality today is healthcare delivery organizations must still file claims and pre-authorizations to MA plan sponsors because they are being paid on a fee for service basis. Yes, MA is meant to be a value-based care model, and many contracts include bonus payments from payors to providers when certain quality metrics are met. However, the payors ultimately want to control their medical loss ratio (MLR) so they can hit profit targets, and hence want to carefully control payments they make for medical costs. This topic is another good one to dive in for another blog.
Conclusion
Getting back to the question that kicked off this blog, are MA plans really improving quality? Well, one needs to be clear on what is meant by "quality". Is it measured solely by clinical outcomes? If so, there is a body of evidence that yes it does. Is it solely measured by member experience? If so, there is evidence to indicate there are mixed results. CMS has taken the approach to answer quality as a blend of both clinical and member experience. Is quality measured by lowering the churn and overhead that healthcare deliver organizations must undergo to deliver care? There is evidence to indicate MA plans have not improved the situation.
