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For a while now, we’ve been encouraging payers to think beyond compliance when it comes to the CMS-mandated Access APIs. While regulatory compliance should certainly be front of mind, we like to think of these APIs as Compliance++. Sure, payers should tick the compliance checkbox, but while you’re making this investment in technology, you should also think about other ways you can use the data to impact your business. And one such way, if you have Medicare Advantage (MA) lines of business, is improving your Star Ratings. In Part 1 of this new blog series, we dig into this very lucrative opportunity.
Star Ratings in the news
The topic of Star Ratings is very timely as they are very much in the news right now. The Wall Street Journal, Fierce Healthcare, and other publications, recently ran articles about the drop in Humana’s Star Ratings, which could have an estimated $3 billion (or more) impact on their revenue and sent stock tumbling by more than 20% the morning of the announcement. By end of day trading, Humana had lost nearly $4 billion in market cap. Humana is actively appealing some of its 2025 Star Ratings results.
In other news, Fierce Healthcare reported that UnitedHealthcare is suing the Centers for Medicare & Medicaid Services (CMS) for unfairly decreasing the insurer’s Star Ratings. They’re seeking an injunction and corrected ratings. UnitedHealthcare said the Star Ratings downgrade would “misinform millions of current and potential customers” from choosing their plans.
In the midst of all of the Medicare Advantage (MA) news on the payer side, providers continue to remove themselves from these plans. As reported in a recent article in The Minnesota Star Tribune, Mayo Clinic recently told hundreds of patients they’d have to find new plans. Mayo’s notice brings the number up to around 30 health systems this year that have stopped accepting one or more Medicare Advantage plans stating administrative burden and lack of payer reimbursement.
We wrote about these macro trends back in May and they continue to persist.
But Medicare Advantage and the Star Ratings system are not going away
In fact, CMS continues to raise the bar, further increasing quality and operating pressure on health plans. And, as Medicare Advantage enrollment continues to grow, current ways of managing care and measuring performance aren’t going to scale. Meanwhile, Medicare Advantage overpayments continue, estimated to be 22% as compared to Fee-for-Service (FFS), according to MedPac, the Congressional agency overseeing CMS.
No doubt, changes need to be made and they’re coming.
Why Star Ratings matter
Star Ratings impact payers in two critical ways. First, according to McKinsey & Company, 76% of patients that qualify for Medicare choose a plan with 4 or more Stars. Since attracting and keeping patients is key to the economic model of these plans, payers are willing to fight for high ratings. Second, higher Star Ratings lead to higher quality bonus payments. In fact, the difference between a 4-Star plan and a 5-Star plan is an additional $14.75 million in revenue (for a 50,000 member plan).
Therefore, it’s absolutely critical for payers to execute and win in the Star Ratings game.
How are Medicare Advantage Star Ratings calculated?
CMS calculates Star Ratings based on data in the following categories:
- Health Effectiveness Data and Information Set (HEDIS)
- Prescription Drug Event Data
- Consumer Assessment of Healthcare Providers and Systems (CAPS)
- Health Outcomes Survey (HOS)
- Operations Data From Health Plans
There are approximately 40 measures that impact Star Rating Measures. To get to a Rating, clearly data plays an outsized role.
Why data matters
Data sits in the middle of all this complexity. Those that can access quality data in near real time will end up winning. Therefore, payers need to take a two-part, data-driven approach to their Star Ratings. This includes first getting the data, and then putting that data to work. It’s the intersection of these two things, which we at 1uphealth call “computable interoperability”, that is critically necessary.
Payers need to be way smarter about using data. Gone are the days of manual chart-chasing. Technology – including FHIR, APIs, and health data management platforms – are changing how payers can compute performance for each measure, making it faster, more accurate, and more cost-effective.
The technology that powers the Stars program
FHIR (Fast Healthcare Interoperability Resources) is synonymous with healthcare interoperability, and is rapidly being adopted by EHR vendors, developers, payers, and patient applications. FHIR is a standard for exchanging healthcare information electronically using modern web technologies. FHIR was developed by HL7, a Standards Development Organization (SDO), and was first published as a Draft Standard for Trial Use in 2014.
APIs (Application Programming Interfaces) are the way modern computing works and CMS-0057 is propelling the healthcare industry towards modernization by requiring a number of APIs, including:
- Patient Access API – Empowers patients by enabling them to access their medical information.
- Provider Access API – Enables providers with more information about their patients.
- Payer-to-Payer Data Exchange – Empowers payers by providing a more comprehensive patient data set.
To exchange, standardize, manage, and compute on all the data being exchanged through these APIs and powering Stars, payers also need to invest in a modern health data management platform. When making an investment in a health data management platform, payers should look for solutions that offer:
- Efficiency
- Scalability
- Flexibility
- Data quality
Once you have all that data in place, you need to put it to work
Clearly just having the data is insufficient. Payers also need to figure out how to put it to use to improve each and every measure. They need to understand the incentives that each measure is affected by and which of these factors can make a difference. Almost always at the root of improving each measure is improving communications with patients and providers. From there, you can think of the patient-facing and provider-facing improvements to make both on the back end and the front end. We will do a deep dive into these improvements in a future blog.
There are four key data initiatives we think all payers should undertake:
- Invest in CMS-0057 capabilities ahead of the looming deadlines.
- Work with providers on win-win network contracts so you have access to timely clinical data.
- Once you have clinical data, integrate it with your claims data.
- Take a proactive approach to make decisions using complete, real-time data.
Watch the full webinar on this topic to learn more
We hope it’s abundantly clear by now that Star Ratings – beyond being about improving patient outcomes and patient experience – can make or break a Medicare Advantage Plan. Ratings are driven by measurements, and measurements are powered by data. Finally, it’s the CMS-mandated Access APIs, in combination with a health data management platform, that can power the data exchange, management, and computation of each and every measurement that makes up the Star Ratings. Those that invest and execute in the right technology and think Compliance++ will win in the Medicare Star Ratings game and beyond.
To learn more, watch our recent webinar on this topic and stay tuned for future blogs in this series.
