December 10, 2014

CMS Proposes Changes to 2016 Star Rating Calculations

Medicare Advantage and Medicare Part D Prescription Drug Plans May Be Affected
Holland & Knight Alert
Jeffrey W. Mittleman


  • The Centers for Medicare and Medicaid Services released a memorandum requesting comments regarding proposed changes to the 2016 star ratings systems for Medicare Advantage and Medicare Part D Prescription Drug Plans.
  • Notable changes to existing measures included removing 4-star measurement thresholds, changes to the interpretation of what constitutes a “low-enrollment contract,” and data integrity provisions, among others.

The Centers for Medicare and Medicaid Services (CMS or the Agency) released a memorandum requesting comments regarding proposed changes to the 2016 star ratings systems for Medicare Advantage Plans (MA Plans) and Medicare Part D Prescription Drug Plans (PDPs). The Nov. 21, 2014, memorandum also provided advance notice for potential changes to the 2017 star ratings. If implemented, these proposed changes could affect the star ratings, and potentially the enrollment numbers, of MA Plans and PDPs.  

CMS will accept comments through 5 p.m. Eastern on Dec. 17, 2014. The Agency stated that further guidance on anticipated changes for the 2016 star ratings will appear in the draft 2016 Call Letter in February 2015, to which commenters will also have a chance to respond.

The following highlights some of the proposed changes addressed in the memorandum.

Changes to Star Ratings

Proposal to Update Current Methodology

CMS proposes to eliminate the 4-star measurement thresholds for the 2016 star ratings. Contracts that meet thresholds receive 4 or 5 stars, whereas contracts that do not receive 1, 2 or 3 stars. CMS expressed concern that these thresholds fail to maximize differences between star categories (e.g., if a threshold is 80 percent, a contract that scored 79.4 percent would receive 3 stars while a contract that scored 80.1 percent would receive 4 stars, although the contracts may lack meaningful differences). The Agency further noted that studies have found that plans experienced greater improvement in performance measures without thresholds. CMS also requested comments on whether to eliminate all thresholds in 2016 or phase-out their elimination through 2017.

As an alternative to eliminating them, CMS requested comments on a proposal to adjust star rating thresholds annually. Under this proposal, CMS would increase the thresholds of each star rating to reflect improvements in plan scores. In other words, as more plans achieve higher ratings, CMS would increase threshold scores.

New, Additional and Removed Measures for 2016, 2017 and Beyond

CMS proposed the addition of several measures to the 2016 star ratings, including measures regarding medication therapy management and the reintegration of a measure regarding beneficiary access and performance problems. The Agency also proposed to remove several measures and adjust the calculations of others for 2016.

CMS similarly described potential changes to existing measures and potential new measures for calculating star ratings for 2017 and beyond. Such notable potential changes included changes affecting price accuracy scores.

Consideration of Low-Enrollment Contracts in Star Ratings

CMS stated that it is "moving toward" including low-enrollment contracts within the star ratings. Regulations define low-enrollment contracts as those contracts for which data collections cannot be used to reliably measure performance. CMS stated that although the Agency traditionally has interpreted this to include contracts with fewer than 1,000 enrollees, it now believes that contracts with 500 or more enrollees provide sufficient data to reliably measure performance. Therefore, CMS will apply 2016 star ratings to these contracts and use these contracts in 2017 quality-based payments. The Agency noted, however, that it will exclude measures for these plans where appropriate, such as when measures with low reliability or those for which low-enrollment contracts fail to meet the minimum denominator.

Data Integrity

CMS proposed to expand data integrity checks for performance measures by using Medicare Part C and Part D data validation results to analyze whether plans accurately reported performance measurement data. After review of the data, CMS would reduce ratings to 1 star for plans found to have inaccurately reported data.

Plans with Disproportionate Shares of Dual-Eligible Beneficiaries

CMS reiterated its concern that plans that enroll a disproportionate share of dual-eligible or low-income subsidy beneficiaries experience difficulty in achieving performance measures. CMS stated that it continues to analyze data regarding this issue and whether dual-eligible beneficiaries experience lower quality care. The Agency will release more information regarding its analysis of the impact of dual status on performance measures in February 2015.

Going Forward

In addition to submitting comments, MA plans and PDPs may want to consider a review of their contract terms and benefits to determine how proposed changes could affect their star ratings, and in turn, their beneficiary enrollment. 


Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.

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