Star Ratings Improvements: A Top 5 List

The Centers for Medicare and Medicaid Services (CMS) developed a performance rating system for Medicare Advantage (MA) and Prescription Drug Program (PDP) plans as a report card of how plans managed key requirements.  The system ranges from one star (“poor”) to five stars (“excellent”) and each year in the fall, the ratings for the prior year are announced.  Low performing plans (considered those with less than three stars) are considered “at risk” and are in danger of contract termination.

MA health plans are evaluated on five key metrics:

  1. Staying healthy:  screenings, tests, and vaccines
  2. Managing chronic (long-term) conditions
  3. Plan responsiveness and care
  4. Member complaints, problems getting services, and improvement in plan performance
  5. Health plan customer service

Additionally, health plans offering prescription coverage and stand-alone PDPs are evaluated on:

  • Drug plan customer service
  • Member complaints, problems getting services, and improvements in plan’s performance
  • Member experience with the plan
  • Drug pricing and patient safety

In 2014, MA-PD plans averaged 3.05 stars and PDPs 3.84 stars with the vast majority of plans over the three star “at-risk” benchmark.  In theory, the ratings assist consumers in measuring one plan against others to consider the best performing plans.  While CMS intends for star ratings to be a major factor in plan choice among seniors, a recent focus group study by Kaiser Family Foundation disputes this idea.  In general, Kaiser found most seniors were unfamiliar with the ratings and did not use the Medicare Plan Finder comparison tool.  Those that did know of the ratings stated they, “…did not play a major role in their decision-making process.”  Additionally, if satisfied, seniors were generally not likely to change plans.


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New Thinking About Weight Loss & Weight Loss Drugs

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Without much fanfare, in December 2013, the American Medical Association House of Delegates (AMA) formally adopted its “Resolution 420.”  In it, the AMA formally recognized obesity as a disease, unique unto itself; a disease that is often the precursor to many other highly prevalent disease states such as diabetes, hypertension, high cholesterol, and others.  Resolution 420 was remarkable because it finally recognized obesity as a primary cause which, if effectively dealt with, could preempt the development of so many secondary harmful effects – effects which produce impaired clinical functioning, poor overall health, and which consume many financial and clinical resources when they emerge.

Unfortunately, despite the recent approval of several new prescription medications that are designed to produce and maintain weight loss and forgo the development of serious subsequent co-morbidities, most Pharmacy Benefit Plans continue to exclude weight loss medications from coverage in their Pharmacy Benefit Plans because of negative clinical experiences that occurred in the 1990s, and whose memory still lingers today.


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The Rising Costs of Compounded Drugs: Utilization and Cost Management

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An emerging and concerning pharmacy cost trend observed by Excelsior Solutions is the rising costs of compounded drug claims.  But why would we see this increase?  We will examine some industry changes and other potential factors that could affect your plan’s compound trend, plus offer suggestions in managing compound spend.

Historically, compound drug expenditures have represented a fraction of overall pharmacy costs.  However, the industry was challenged with a lack of transparency regarding what ingredients actually made up a compound.  Prior to December 2011, limitations around the information submitted during claims adjudication meant that plans and their Pharmacy Benefit Managers (PBMs) reimbursed only the most expensive prescription ingredient.  All other ingredients in a compound were “blinded” to the adjudication and payment of the claim.  Thus, pharmacies were paid based on that prescription ingredient for the metric quantity of the entire compound, not just the active ingredient amount.

Factors Influencing Cost

Concerns about the lack of transparency led the National Council for Prescription Drug Programs (NCPDP) and PBM industry representatives to develop a way to process prescription compound claims with all ingredients accounted for.  As of January 1, 2012, this functionality became available to pharmacies.  This functionality required compound claims to include significantly more detail and addressed the concerns regarding:

  • Specific ingredients, both prescription and non, in the compound
  • Payment for each individual ingredient in the exact quantity used
  • Additional opportunities for oversight on the compounds


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