Study: Health Plans Focusing on Low-Socioeconomic-Status Members Perform Better For Those Members | Healthcare Innovation

A new analysis by healthcare policy researchers looks at the confluence of Medicare Advantage’s star ratings and issues around health disparities. Authors David J. Meyers, Ph.D., M.P.H., Momtazur Rahman, Ph.D., Vincent Mor, Ph.D., Ira B. Wilson, M.D., and Amal N. Trivedi, M.D., M.P.H. al on June 11 published “Association of Medicare Advantage Star Ratings With Racial, Ethnic, and Socioeconomic Disparities in Quality of Care” in the JAMA Health Forum online. All five authors are affiliated either with the Department of Health Services, Policy, and Practice, at the Brown University School of Public Health, Providence, Rhode Island, or the Providence VA Medical Center, or both.

As the researchers note, “More than one-third of Medicare beneficiaries were enrolled in Medicare Advantage (MA) in 2019. In MA, private plans receive capitated payments to cover their enrollees’ health care needs. Medicare Advantage plans enroll higher proportions of racial/ethnic minorities and enrollees with lower income and education than the traditional Medicare program, and prior work has found substantial disparities in the quality of care in the MA program. These disparities in care have been found within plans (disparities in quality of care for enrollees in the same plans), and between plans (disparities driven by disproportionate enrollment of minorities in plans with worse quality). Since 2008, the US Centers for Medicare & Medicaid Services (CMS) has used a 5-star rating system to measure the performance of MA contracts and allocates $6 billion in annual bonus payments on the basis of these star ratings. Then CMS calculates these ratings and assigns bonus payments for all enrollees in a contract without stratifying results by race, ethnicity, or socioeconomic status (SES). While the CMS Office of Minority Health reports some individual measures by race/ethnicity dual status, as well as by disability, this stratification does not contribute to plan payment decisions. If aggregate contract star ratings hide clinically important differences in quality between advantaged and disadvantaged plan members, then quality measures that directly assess equity may be needed. This study addressed 2 main points: first, if there is an association between an MA contract’s overall star rating and what the star rating would have been if calculated for that contract’s enrollees who are racial/ethnic minorities or who have lower SES; second, if contracts with higher star ratings have lower disparities in care.”

The researchers uncovered four core findings. “First,” they write, “we observed only a modest correlation of simulated star ratings when calculated for enrollees of low SES and high SES, and between racial/ethnic minority enrollees and White enrollees in the same contract. Second, contracts with higher star ratings had larger racial/ethnic disparities than did those with lower star ratings. Third, the contracts with lower concentrations of individuals of low SES and Black or Hispanic individuals had larger disparities and worse quality for these individuals. Fourth, we identified both within-plan and between-plan disparities in the quality of care in the MA program, as measured by the star ratings.”

Importantly, they found that “[T]he disparities are evident not just in some selected outcomes, but across aggregate plan quality and in a composite metric (the star rating) that determines the distribution of $6 billion in annual bonus payments to MA plans. Second, to our knowledge, this is the first study to demonstrate that MA plans with higher-measured quality have larger magnitudes of disparity in quality within their enrolled populations. Third, we found a low correlation between a plan’s rating for its enrollees of low SES and Black and Hispanic enrollees, and its enrollees of high SES and White enrollees, although this may be largely due to the low reliability of the simulated scores.”

Significantly, the researchers write, “This study is among the first, to our knowledge, that finds variation in disparities by some contract characteristics. We find that contracts with high concentrations of individuals of low SES and Black or Hispanic individuals actually perform better for those populations in stratified star ratings than they do for individuals of high SES and White individuals. It is possible that contracts that treat large numbers of these populations offer additional supplemental benefits or tailored interventions to better address their needs. They may also contract with insurance provider networks that perform better for these populations. Future work should seek to understand what other contract and plan-level factors may contribute to mitigate disparities in plans and the mechanisms that explain why disparities are larger in plans with higher star ratings and fewer racial/ ethnic minority enrollees.”

Thus, in the end, the article’s authors conclude that “Results of this cross-sectional study found that simulated star ratings for White enrollees and those with higher SES are only modestly associated with star ratings for minority enrollees and those with lower SES in the same contract. Contracts with higher Medicare star ratings have larger racial, ethnic, and socioeconomic disparities in quality. These findings indicate that the MA star ratings may need to be modified to explicitly consider and reward equity in care.”