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:
- Staying healthy: screenings, tests, and vaccines
- Managing chronic (long-term) conditions
- Plan responsiveness and care
- Member complaints, problems getting services, and improvement in plan performance
- 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.