MedPAC Recommends Socio-Economic Risk Adjustment of Medicare Advantage Star Ratings
The agency that advises Congress on Medicare payment issues has suggested to the Centers for Medicare & Medicaid Services (CMS) that it revise its star ratings systems for Medicare Advantage plans.
In a letter to CMS in response to its request for comment on star ratings, the Medicare Payment Advisory Commission (MedPAC) agreed with CMS that there is evidence of a difference in Medicare Advantage plan performance based on the low-income status or disability of plan members. While CMS continues to consider how to adjust for such a challenge, MedPAC recommended an interim approach called a “Categorical Adjustment Index” that would
… group MA contracts together, by deciles (for example), based on their share of the relevant populations (low-income, disabled). For each of these initial contract groupings, there would be a comparison between the overall or summary star rating determined under the current methodology, and an overall or summary star rating determined if there are adjustments made to measure results. The adjustment to the measure results would be based on a beneficiary-level regression model that determines the average within-contract difference in measure results for the relevant populations. The initial grouping of contracts would then be combined (if appropriate) into final groups for adjustment purposes so as to group together contracts that had similar mean differences between adjusted and unadjusted summary or overall results. Once that final grouping is determined, each contract within the group would receive the same adjustment to its summary or overall star rating, and the adjusted star rating determines the contract’s status for purposes of determining bonus payments.