Experts See Flaws in System To Set Bonuses for Medicare Advantage
Although health care policy experts and insurers agree that the five-star system used to rate Medicare Advantage plans is flawed, the system now will be used to determine which plans should receive bonuses under the new national health reform law, Kaiser Health News/Washington Post reports.
The ratings -- which appear on the "Medicare Options Compare" website -- are based on 33 criteria. If an MA plan also offers drug coverage, another 19 criteria are considered.
According to CMS deputy administrator Jonathan Blum, Medicare beneficiaries tend to pick MA plans based on cost and access to their physicians, with more than 75% choosing a plan that has three or fewer stars.
However, the new reform law stipulates that plans with four- or five-star ratings will receive a 1.5% bonus in Medicare payments beginning in 2012, and 5% bonuses by 2014, with some plans possibly even getting higher payments. If the bonuses were in effect last year, $1.3 billion would have gone out to the top-rated plan, according to George Washington University health policy professor Brian Biles.
Experts have noted several issues with using the rating system to determine the bonuses. For example, Biles found that just 15% of Medicare beneficiaries enrolled in MA plans live in counties where four- to five-star plans are offered.
Further, studies conducted by Kaiser Family Foundation and Avalere have shown that more than 40% of plans have no rating because they are too new or small.
America's Health Insurance Plans spokesperson Robert Zirkelbach said that many plans will never receive top ratings even if they improve because "the plans are compared against each other and then graded on a curve."
According to Vicki Gottlich, a senior attorney at the Center for Medicare Advocacy, the only way to get a full picture is to look at the Medicare website for a breakdown of the scoring (Jaffe, Kaiser Health News/Washington Post, 6/15).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.