7 Warning Signs That Your Medicare Advantage Plan Will Lose Stars in 2023

By Rex Wallace and Shub Debgupta

Medicare Advantage markets are highly competitive, with the average member facing a choice of almost 40 plans. As a result, members are increasingly using Star Ratings to differentiate between offerings. With so much riding on quality ratings, it is imperative that Medicare Advantage plans take steps to avoid losing Stars – especially those plans at risk of falling below 4.

Which plans will fare well in 2023?

We conducted an analysis of the drivers of Star Ratings for current Medicare Advantage plans to predict how they would perform under the new 2023 Stars weightings outlined by CMS. Specifically, we projected how Medicare Advantage plans would perform in 2023 Star Ratings using their 2021 scores.

Unsurprisingly, the new ratings will lower most plans’ Star Ratings scores. But we were surprised at the magnitude of the decline: about 90 percent of all Medicare Advantage plans will see some reduction in their Star Rating scores if no additional action is taken. The exact amount of the reduction will vary by plan. Below we list the percentage reduction in weighted (raw) scores that Medicare Advantage plans are projected to see in 2023 Star Ratings if they do nothing different from 2021.

Figure 1: Impact of 2023 Star Measure Weightings on Medicare Advantage Plans

While reductions in Star Ratings are painful for any organization, plans will face significant business and financial implications if their overall ratings fall below 4 Stars. This is because CMS quality bonus payments kick in at the 4 Star threshold. Falling below 4 Stars means less funding available for member benefits, which significantly impacts plan strategies and competitiveness. This also dramatically shows up in plans’ membership growth. Since 2019, Medicare Advantage plans with 4 or more Stars have grown membership faster by adding 2.1 times more net members compared to other plans.1

As part of our analysis, we have compiled a list of the top 7 leading indicators allowing us to predict which Medicare Advantage plans are likely to fall in 2023 Stars. Use this list to assess whether your Medicare Advantage plan is at risk.

Know These Warning Signs

Warning Sign #1: Your plan is already close to a scoring cutoff. Medicare Advantage plans above the 4 Star threshold that have weak Member Experience scores are likely to fall below the threshold in 2023 Stars if they don’t improve sufficiently. Our model shows that slightly more than two thirds (71 percent) of current 4 Star plans are at risk of falling below 4. What is surprising is that even plans that may seem secure – especially those with 4.5 and 5 Stars today, still face the risk of a sub-4 downgrade. In fact, 38 percent of current 4.5 Star and 33 percent of current 5 Star plans are at risk. In all, we found almost half of all plans above 4 Stars today to be at risk for 2023 Stars. In analyzing these plans, we see that they currently have weaker ratings in the Member Experience measures than in non-Member Experience measures, and the reweighting would impact them negatively.

Warning Sign #2: Your plans will reduce benefits in 2022 without managing member expectations. CMS will measure eight of the 16 Member Experience measures to be used in the 2023 Star Ratings in the first half of 2022 using CAHPS survey responses collected from returning members only. As a result, returning members who perceive and/or experience plan benefits changes negatively may give lower ratings on certain survey responses. It is well known that not all benefits changes are perceived the same way. Members tend to rate any cost increases in transactional or usage-based benefits such as increases in co-pays, deductibles, Out of Pocket Maximums, Part D deductibles and Tier changes more negatively than other design changes. Furthermore, regardless of usage, members view reduction in the number of supplemental or extra benefits as a loss and view their plans less positively.

For plans that had to make the difficult choice to reduce benefits or increase cost-sharing, it is essential to develop a deep understanding of which members will be most affected by those changes and how. Plan on conducting a robust outreach to those members to ensure they are aware of these changes in advance. No one likes expensive surprises, so advance knowledge of even negative changes to benefits can help mitigate members’ anger and distress.

Warning Sign #3: Your plans requires excessive member effort to get things done. Members’ perceptions of how much effort they need to expend in interacting with the plan predicts their satisfaction with the plan. This perception that the plan is easy to work with – or not – influences the overall Member Experience. This perception also predicts Stars Member Experience measures and scores – such as customer service and overall ratings – as well as members’ intent to re-enroll and their promoter score (for the plan’s Net Promoter Score).

Figure 2: Predicted Health Plan Satisfaction vs. Perceived Effort in Plan Interactions

In terms of business outcomes, every 10 percent reduction in the perceived effort increases the member’s re-enrollment likelihood by 4 percent. In other words, when they make plan interactions more effortless, they improve not only their CAHPS measures and Star Ratings, but also retention. On the flip side, Medicare Advantage plans with processes that increase perceived effort for the member – such as onerous referral requirements, plan approvals for tests and appointments, and new pre-authorization criteria - will risk a lower Star Rating.

Warning Sign #4: Your plan has lost providers or pharmacies. When large numbers of members must change their provider or pharmacy, Star Ratings will likely suffer. Members view provider or pharmacy changes that are forced on them negatively and dislike the experience. A provider loss often has a compounding negative impact – not only does it require member effort to change providers, and to ensure all documents and records are transferred, it also increases competition for appointment scheduling into existing network providers, thereby impacting members’ abilities to close HEDIS gaps in care – which also negatively impact Star Ratings. Since a number of CAHPS measures assess the member’s speed of appointment scheduling and wait time, as well as visit experience and care coordination, a provider or pharmacy network change tends to have a negative Stars impact.

Warning Sign #5: Member expectations are inconsistent with their plan experiences. Members tend to have expectations of their Medicare Advantage plan and plan experience. These expectations are often based on prior plan experiences. The current plan’s buying process and interactions with the plan and its representatives also influence member expectations. If the member’s actual plan experience fails to meet expectations, members will take note and hold the plan responsible. They are also likely to respond negatively and critically on CAHPS surveys. We see greater variance in expectations versus experience when members switch plan type (for example, from a pre-Medicare Commercial PPO to a Medicare Advantage HMO), or enroll in plans that offer limited onboarding help, training, member education, or tools.. In plans with a wider gap between expectation and experience, Member Experience ratings are lower and put Star Ratings scores at risk.

Warning Sign #6: Your plan has not conducted effective, caring outreach to members during the pandemic. Many plans have done exceptional jobs of reaching out to their members throughout the pandemic, making them feel supported and cared for during times of severe isolation. But plans that have failed to reach out – whether due to budgetary pressures, insufficient resources, or lack of focus on members – are at great risk of experiencing a significant drop in CAHPS scores. Worse, this drop will occur at the very time when those CAHPS scores have become doubly important.

Warning Sign #7: Your plan discontinued CMS-authorized pandemic-related flexible policies earlier than your competitors. At the beginning of the pandemic, CMS allowed plans to expand benefits and remove restrictions ensure members had sufficient access to care. For example, plans could expand telehealth benefits beyond those filed in plans’ bids, and they could remove refill-too-soon edits so members could have larger supplies of medication. These were unbudgeted expenses, and many plans are unable to continue to fund these enhancements permanently. At some point, plans will have to revert back to the original offerings, and when they do, members will likely experience a decline in access. As a result, CAHPS scores could drop.

The above indicators can help Medicare Advantage plans assess their risk of a Star s downgrade and take steps to avoid the loss. Once you know you are at risk, the next question is what you should do and how do you prioritize action. The solution and intervention ultimately depend on your situation, scale of risk and business priorities. Our analysis also identifies the steps Medicare Advantage plans can take to scope and implement appropriate targeted solutions. These solutions are not complex, nor are they resource intensive – and often require adjustments to existing practices and processes.We will be sharing insights on solutions in future posts.

[1] McKinsey & Company, “New Stars ratings prioritize Medicare Advantage Member Experiences.” October 2020; https://www.mckinsey.com/industries/healthcare-systems-and-services/our-insights/new-stars-ratings-for-medicare-advantage-prioritize-customer-experiences

About the Authors

Rex Wallace, Principal, Rex Wallace Consulting LLC.

Shub Debgupta, CEO, Predict Health, Inc.

About Rex Wallace Consulting LLC (RWC)

As experts in Medicare Star Ratings, we help health plans achieve higher quality, operational excellence, and more meaningful engagement with members, providers, and employees. (Contact: Rex Wallace – rex.wallace@rexwallaceconsulting.com)

About Predict Health, Inc. (predicthealth.ai)

We help Medicare payers put the consumer at the center. We provide powerful consumer insights at the individual member and prospect level to help plans grow membership, improve quality, and optimize performance. Our solutions predict member actions using highly refined proprietary member insights which utilize member plan preferences and identified social, community, behavioral, financial, environmental and network information to help payers dramatically improve how they serve their individual members, prospects, and communities. (Contact: Shub Debgupta – shub@predicthealth.ai)