Local Examples: Innovations in Cost and Quality Transparency
Three main obstacles prevent beneficiaries from choosing the right Medicare plan for their needs: 1) inadequate quality assessments from fee-for-service Medicare plans, 2) overly complicated (and sometimes conflicting) quality assessments for Medicare Advantage plans, and 3) no way to estimate the financial impacts of different health plan choices
The lesson from places that have tested consumer response to Medicare quality ratings is that quality matters. When options are made clear, beneficiaries are more likely to choose plans that offer high quality at an affordable price. In other words, they choose value.
Below are several examples of health plan quality ratings that help consumers make a more informed choice.
Medicare helps beneficiaries choose high-quality Medicare Advantage plans by giving each plan a rating of up to five stars. These star ratings are based on 32 measures for Medicare Advantage plans that do not include prescription drug coverage, or 47 measures for plans that offer drug coverage. Measures are grouped into five categories: Outcomes, Intermediate Outcomes, Patient Experience, Access, and Process, with Process measures carrying the least weight in a plan’s overall score.
In 2015, about 40% of Medicare Advantage plans received a four star or higher rating, an increase of about 6% from the previous year. Sixty percent of Medicare Advantage enrollees enrolled in these plans, an increase of about 31% from 2012 enrollment levels. Plans with higher star ratings capture more market share, relative to their availability, compared to plans with lower star ratings, as the following chart illustrates.
2015 Rating Distribution for Medicare Advantage Prescription Drug Plans
On average, beneficiaries enrolled in higher rated plans have better outcomes. For example, in order to achieve a five-star rating, plans must ensure that at least 86% of beneficiaries with diabetes have controlled blood sugar and 62% or more have controlled cholesterol. All-cause readmissions must be 2% or less.
A recent study found that star ratings drive enrollment decisions. For first-time enrollees, a 1-star increase in a plan’s rating was associated with a 9.5 percentage point increase in the likelihood of enrollment. For a beneficiary facing a choice of 14 plans (the sample’s median), likelihood of enrollment in a particular plan increased from 7.1% to 16.6% with a 1-star higher quality rating. For beneficiaries switching plans, a 1-star increase was associated with a 4.4 percentage point increase in the likelihood of enrollment. Notably, a plan with a star rating at least as high as the beneficiary’s current plan was associated with a 6.3 percentage point increase in the likelihood to enroll.
Consumer Reports provides online, free-of-charge health insurance plan rankings from the National Committee for Quality Assurance (NCQA). The site currently provides rankings for 1,051 private HMOs and PPOs, Medicare Advantage HMOs and PPOs, and Medicaid HMOs, organized by state. Each plan receives an overall score between 1 and 100 based on how it compares with other plans in the same category, and plans are displayed in order from highest score to lowest. In addition, plans receive a score between 1 (worse than average) and 5 (better than average) in three “components of care” categories: consumer satisfaction, prevention, and treatment. Finally, the site provides information regarding whether or not plans are accredited by the NCQA.
Separately, Consumer Reports provides a designation to private plans that do a better job of avoiding unnecessary care. The designation, called Avoiding Overuse, is available to private plans that score above the mean in NCQA’s overall score and meet a utilization threshold in three of the following five areas: avoiding inappropriate use of antibiotics, limiting imaging tests for low back pain, reducing hospital readmissions, avoiding overuse of emergency rooms, and reducing invasive heart procedures.
An online service, eHealth, has assembled much of the critical information to assist Medicare beneficiaries in comparing coverage choices on its website, eHealthMedicare.com. Here, beneficiaries may compare up to three Medicare Advantage, Medigap, or Medicare Part D prescription drug plans. Notably, when comparing Medicare Advantage or Medigap plans, eHealthMedicare.com automatically includes comparable premium and cost-sharing information for Medicare on the same screen, providing beneficiaries with a more complete picture of their potential financial obligations. However, the site does not provide the beneficiary’s total cost, for example, by adding original Medicare and Medigap premiums together, and does not allow comparison of Medicare Advantage and Medigap plus original Medicare on one screen. Another drawback is the disclaimer indicating that eHealthMedicare.com does not provide a complete list of plans available in a beneficiary’s service area. Enrollment for many plans is available online and for all plans via phone.
Federal Employees Health Benefits Program
The Federal Employees Health Benefits Program (FEHBP) provides a wide selection of health plans to federal employees, retirees, dependents, and survivors. To assist consumers in choosing the right plan for themselves and their family, FEHBP provides quality information about every available plan. One element of the quality information is based on an annual survey of a sample of plan members. Members are asked to rate, on a scale from 0 to 10, their overall satisfaction with the plan, their ease of access to care, their ability to get care right away, how well their doctors communicate, plan customer service, claims processing, and plan information on costs. In the Guide to Federal Benefits, FEHBP reports the percentage of respondents who rated their plan 8 or higher overall and average percentages for the remaining questions, as well as the national average for each question. In addition, the Office of Personnel Management (OPM) evaluates plans on nine significant health issues: breast cancer screening, blood sugar and cholesterol screening for people with diabetes, cholesterol screening for patients with cardiovascular conditions, mental health assessment following hospitalization, high blood pressure control, timeliness of prenatal care, imaging for low back pain within 28 days of diagnosis, and well-child visits. Data for these measures are drawn from the Healthcare Effectiveness Data and Information Set. On its website, OPM displays each plan’s score on every measure; scores are color-coded to indicate whether a plan’s score is at, above, or below the national average. In addition, exemplary and ‘most improved’ plans are noted with a special symbol.
Federal employees may also utilize the Guide to Health Plans for Federal Employees & Annuitants created by Consumers’ Checkbook. The Guide assists consumers in selecting a plan by rating and comparing every plan available through the FEHBP. The Guide provides cost comparisons for premiums, deductibles, copayments, coinsurance, and out-of-pocket limits. Among other helpful information, the Guide provides the same quality information based on the annual member survey that OPM provides, with the addition of contextual information to help consumers better understand the ratings. Some federal agencies provide free access to the guide for their employees, and all federal employees may pay for individual access.
FEHBP began providing plan quality information to federal employees in 1995, and these plan “report cards” were widely disseminated to federal employees in 1996. That year, plan quality information had a substantial and highly significant impact on employee plan selection, particularly for new employees.
National Committee for Quality Assurance
The National Committee for Quality Assurance (NCQA) reports that 171 million Americans, 54%, are enrolled in health plans that provide quality information. While this suggests substantial progress, all Americans deserve to know how well their health plan performs. To help get there, NCQA provides accreditation to high-quality health plans, including 85% of Marketplace plans, that report performance on more than 60 standards drawn from the Healthcare Effectiveness Data and Information Set. NCQA provides quality information on all plans it reviews directly to consumers through its own website and via a mobile app released in the summer of 2015. The app filters plans by product line, so that consumers can focus on commercial (including employer-sponsored), Medicare, Medicaid, or Marketplace plans and choose the accredited plan that is right for their family. NCQA also partners with Consumer Reports to help Americans choose a high-quality health plan. Consumers may create a health plan report card for the commercial, Marketplace, Medicaid, and Medicare plans in their state. Plans receive a rating of 0-4 stars in five different areas: access and service, qualified providers, staying healthy, getting better, and living with illness.
California was one of eight states to make Qualified Health Plan quality information available to consumers directly on the Marketplace’s website during the first year of Marketplace enrollment. Plans are assigned a quality rating of 1-4 stars, based on members’ reported experiences as captured by 10 questions on the Consumer Assessment of Healthcare Providers and Systems survey from 2011. Plan results are compared to all plans in the western U.S., then broken into quartiles. Plans in the bottom quartile receive 1 star, plans in the next quartile receive 2 stars, and so on. California originally planned a more comprehensive quality rating that utilized clinical quality and consumer satisfaction data, but changed the plan due to concerns about data availability for new Marketplace plans. The state does require Marketplace insurers to submit Consumer Assessment of Healthcare Providers and Systems data, as well as data from the Healthcare Effectiveness Data and Information Set, for use in developing a future comprehensive quality rating system. In addition, in its first year, Covered California required insurers to provide plan performance and quality improvement information through the eValue8 survey, a value-based purchasing tool. California used this and other information to employ selective contracting, by which it approved for sale on the Marketplace only those plans meeting criteria such as affordability, access to high quality care, and efforts to reduce health disparities.
Connect for Health Colorado
When browsing for plans on Connect for Health Colorado’s website, consumers see a rating of 0-5 stars directly under the insurance carrier’s name and logo. In 2014, this star rating was based on responses to the “overall rating of health plan” question from the Consumer Assessment of Healthcare Providers and Systems (CAHPS) survey, reflecting services provided in 2011. Consumers may also view a quality overview for each issuer offering plans on the Marketplace, which includes detailed information about the issuer’s accrediting agency and accreditation type and status. The overview also provides detailed ratings on a 4-star scale for plans that are accredited by the National Committee for Quality Assurance in five categories including access and service, qualified providers, staying healthy, getting better, and living with illness. The document also provides information about consumer complaints, including an index indicating where the insurer falls on a continuum from “worse than average” to “better than average.” Plans are permitted to provide narrative text regarding quality improvement efforts including how the plan works to make members healthier, works with providers in innovative ways, and may also provide examples of innovative approaches to health. Finally, the report provides CAHPS and Healthcare Effectiveness Data and Information Set information, comparing several measures to national and regional averages, and reports plan all cause readmissions.
Access Health CT
Connecticut’s health insurance marketplace, Access Health CT, displays quality information on its website for consumers to consider when choosing a plan and requires plans to report on quality information. The website displays a quality rating for each plan of up to four stars, near information about the plan’s metal level, premium, and cost-sharing information. To determine each plan’s quality rating, Access Health CT converted the National Committee for Quality Assurance’s accreditation status into a star system. Plans with an “excellent” status receive four stars, a “commendable” status is three stars, “accredited” status is two stars, and plans with a “provisional” status receive one star. The quality rating displays “not yet rated” for plans that have not yet achieved NCQA accreditation. Access Health CT requires participating insurers to collect and report validated quality data each year, as outlined under federal regulations. The marketplace further reserves the right to require insurers to submit additional quality information, including data required by the Consumer Assessment of Healthcare Providers and Systems, the National Committee for Quality Assurance’s star rating, a narrative description of the plan’s quality improvement strategy, and reports detailing success of the quality improvement strategy.
Pitney Bowes, headquartered in Stamford, uses quality information to evaluate and select the health plans it offers to its employees. The company uses eValue8, a survey created by business coalitions and employers to measure and evaluate health plans. The eValue8 survey measures plans’ efforts in several areas, including how the plan controls costs, reduces and eliminates waste, ensures patient safety, closes gaps in care, and improves health and health care. After completing the survey, plans and employers receive the plans’ scores, which allow for comparison with other plans and with regional and national benchmarks. In addition to using eValue8 information to select health plans, Pitney Bowes uses the scores to set employee contributions, helping to direct employees into higher quality plans. These efforts have helped Pitney Bowes keep health care costs 5-10% below comparable employers each year.
Agency for Health Care Administration
Through FloridaHealthFinder.gov, Florida’s Agency for Health Care Administration provides a treasure trove of quality information for Florida consumers. The site’s Medicaid Health Plan Report Card contains quality information that beneficiaries may use when choosing a Medicaid managed care plan. Using Healthcare Effectiveness Data and Information Set measures, plans are assigned a rating of 1-5 stars in each of the following performance areas: pregnancy-related care, keeping kids healthy, children’s dental care, keeping adults healthy, living with illness, and mental health care. In most performance areas, data on several measures are combined to assign a star rating. For each measure in a performance area, a plan’s scores are compared to the national means and percentiles of all health plans in the same product line. Scores at or above 50% of all health plans’ scores receive five stars, scores better that at least 40% of all health plans’ scores receive four stars, scores better than at least 25% of all health plans’ scores receive three stars, scores better than at least 10% of all health plans’ scores receive two stars, and scores in the bottom 10% of all scores receive one star.
Even more quality ratings are available on the site for commercial health maintenance organizations (HMOs). Star ratings for several measures are available, and both raw scores and star ratings are provided for commercial HMOs in each performance area.
FloridaHealthFinder.gov also lists quality ratings for Medicare HMO plans in the following quality measures: breast cancer screening, controlling high blood pressure, and four diabetes care measures.
Finally, the website provides beneficiaries with member satisfaction ratings for adults in commercial HMO and PPO plans and Medicaid health plans, and for parents and children in Medicaid health plans and Healthy Kids HMOs. Plans receive a rating of 1-3 stars, based on the Consumer Assessment of Healthcare Providers and Systems survey, in each of the following areas: overall plan satisfaction, ease in getting needed care, ease in getting care quickly, how well doctors communicate, the number of doctors to choose from, how well the plan processes claims, getting help from customer service, recommend health plan to family or friends, and whether you would select your current plan again.
Get Covered Illinois
Illinois’ health insurance marketplace, Get Covered Illinois, partners with Consumers’ Checkbook to help consumers choose the right plan using the Marketplace Health Plan Comparison Tool. Consumers provide information about their age, general health status, whether they expect to require any medical procedures, tobacco use, and pregnancy status. Consumers may also enter their doctors’ names to learn whether their preferred providers are in a plan’s network. The tool then provides comparative information about all plans in a consumer’s zip code, including total estimated costs, and a quality rating based on a 5-star scale. Here, consumers may choose to personalize each plan’s quality rating based on their preferences. The score that first appears is based on the percentage of members who gave the health plan an overall rating of eight, nine, or ten. Consumers may choose to personalize the quality rating by indicating, using a sliding scale from “Not Important” to “Very Important,” the import they attach to each of 15 different quality dimensions. The data for each dimension comes mostly from the National Committee for Quality Assurance, with one dimension on complaint rates from the Illinois Department of Insurance and one dimension on hospital death rates from Medicare’s Hospital Compare website. The tool translates these data into a star score by ranking plans in percentiles compared to other plans and weighting them according to the user’s preferences. Finally, consumers may then choose several plans to compare and review more detailed information about, including estimated annual costs if health care usage is low or high, the percentage likelihood of low or high usage, and average annual costs for “people like you.”
Medicaid Managed Care
As of 2011, nearly 90% of Kentucky’s Medicaid beneficiaries were enrolled in a risk-based managed care program, which is mandatory for most beneficiaries. In January 2014, the state used its managed care program to extend coverage to the newly eligible Medicaid expansion population through mandatory enrollment in managed care. To ensure beneficiaries have access to a high-quality health plan, the state requires all Medicaid managed care plans to maintain accreditation by the National Committee for Quality Assurance and to report audited Healthcare Effectiveness Data and Information Set (HEDIS) data, Consumer Assessment of Healthcare Providers and Systems (CAHPS) measures, and data on other measures. The state uses this data to create A Member’s Guide to Choosing a Medicaid Health Plan, which provides star ratings on select HEDIS measures and CAHPS results in three broad performance areas: preventive care, access to care, and getting help when needed. Plans receive 1-3 stars on several measures within each performance area; one star indicates performance is below average, two stars is average, and three stars is above average.
Maryland Health Connection
The Maryland Health Connection was one of just three state-based exchanges to utilize a comprehensive quality rating in the 2014 plan year, incorporating data from multiple sources. Maryland gives qualified health plans a quality rating of up to five stars based on more than 100 measures of plan performance. The performance data is drawn from the Healthcare Effectiveness Data and Information Set, the Consumer Assessment of Healthcare Providers and Systems, and other state-specific metrics. Values for all measures are combined into a formula created by the Maryland Health Care Commission and the total score is converted into a star value based on the performance of all other plans. Plans in the 0-10th profile receive one star, 11th-25th percentile receive two stars, 26th-50th percentile receive three stars, 51st-75th percentile receive four stars, and plans above the 75th percentile receive five stars. The star rating is displayed for consumers alongside the plan’s metal level and premium and cost-sharing information. A description available to web users explains that plans with 0.5-1 stars perform against a national average benchmark at a “Satisfactory” level, 1.5-2 stars perform against the benchmark at an “Above Satisfactory” level, 2.5-3 stars at a “Good” level, 3.5-4 stars at a “Very Good” level, and 4.5-5 stars at an “Excellent” level.
Massachusetts Health Connector
Massachusetts provides consumers with quality rating information reflecting the National Committee for Quality Assurance’s accreditation scores. The Connector displays an overall rating of 0-4 stars based on the plan’s NCQA accreditation level, as well as a 0-4 star rating in each of five areas: access and service, qualified providers, staying healthy, getting better, and living with illness. Unfortunately, this quality information is not displayed alongside other information about the plan that consumers would use to make a choice. Instead, consumers must choose to “Learn About Health Connector Plans,” and then select the carrier of the plan for which they wish to find quality information.
Medicaid Health Plans
Nearly 90% of Michigan’s Medicaid beneficiaries were enrolled in the Comprehensive Health Care Program in 2011, a mandatory (for most beneficiary groups) managed care program providing coverage through health maintenance organizations (HMOs). Participating plans are required to maintain accreditation and to submit data from the Healthcare Effectiveness Data and Information Set, the Consumer Assessment of Healthcare Providers and Systems, as well as other performance data. Plans are incented to improve quality by performance bonuses for meeting certain quality targets and penalties or sanctions for poor performance. In addition, high performing plans receive a greater proportion of Medicaid enrollees through the state’s auto-assignment process. The state also uses this quality information to create A Guide to Michigan Medicaid Health Plans, which helps beneficiaries select a health plan by providing quality information in five broad performance areas: physician communication and service, getting care, keeping kids healthy, living with illness, and taking care of women. Plans receive a rating based on their performance compared to other Michigan Medicaid Health Plans; two “apples” is below average, three “apples” is average, and four “apples” is above average. The Guide also indicates which organization accredits each health plan. Finally, the state provides annual reports of Michigan Medicaid health plans’ performance on Healthcare Effectiveness Data and Information Set measures, assigning plans a rating of 1-4 stars on each measure based on the plan’s percentile ranking relative to Medicaid plans across the country.
New York State of Health and Department of Health
Both New York’s Marketplace, New York State of Health, and the state’s Department of Health provide quality information on available health insurance plans. The state requires certain health plans, including certain managed care organizations, preferred provider organizations, and qualified health plans, to complete the Quality Assurance Reporting Requirements (QARR). QARR includes measures from the Healthcare Effectiveness Data and Information Set, the Consumer Assessment of Healthcare Providers and Systems, as well as several New York State-specific measures. New York State of Health uses these measures to display an overall quality rating of 0-5 stars as consumers shop for and compare plans available in their area. On its website, the Department of Health provides managed care regional consumer guides. Within one of six regions into which the state is divided, consumers may view quality ratings for commercial HMO, commercial PPO, and Medicaid and Child Health Plus plans. In addition to an overall star rating, the site displays star ratings in each of the following 10 domains: child and adolescent care, women’s preventive care, maternal health, adult care, care for respiratory conditions, diabetes care, cardiovascular care, mental health, satisfactions with adult care, and satisfaction with children’s care.
HealthChoices is a risk-based managed care program in which enrollment is mandatory for most Medicaid beneficiaries living in counties where the program operates. Beneficiaries enroll in both a managed care organization for physical health care and a behavioral health organization for behavioral health care. The state requires participating plans to report data from the Healthcare Effectiveness Data and Information Set, the Consumer Assessment of Healthcare Providers and Systems, and on other quality measures. This data is used both for a pay for performance program, in which plans receive payment incentives for their performance relative to benchmarks, and to create managed care organization quality ratings, communicated to beneficiaries in Consumer Guides. A guide is published for each of the five zones into which the state is divided—plans must offer coverage in all counties within a zone. Plans receive a rating of 1-4 stars in each of the following areas: asthma, children’s dental, children’s health, cholesterol, diabetes, maternity, women’s health, getting needed care, and satisfaction with health plan. Several measures are combined to determine a plan’s star rating in each performance area.
Department of Employee Trust Funds
The Department of Employee Trust Funds administers health insurance and other benefits for state and local government employees and retirees who participate in the Wisconsin Retirement System. The Department provides members with a health plan report card consisting of ratings of 1-5 stars in five areas: overall performance, quality, care coordination, grievances, and overuse of services. The grievance measure is based on grievances filed by Wisconsin Retirement System members in each plan. The other four areas are composite ratings based on measures included in the Healthcare Effectiveness Data and Information Set and the Consumer Assessment of Healthcare Providers and Systems. Values for these measures are converted into a star rating, based in part on the performance of other plans.
BadgerCare Plus HMO Report Card
Most Wisconsin families participating in BadgerCare Plus, part of Wisconsin’s Medicaid program, receive health care through health maintenance organizations (HMOs). To help beneficiaries choose a plan, the state publishes a report card, comparing HMOs serving BadgerCare Plus members on several health care measures. Plans receive a letter grade from A-D on several Healthcare Effectiveness Data and Information Set (HEDIS) and HEDIS-like measures, within a geographic regions, as well as an overall grade. The letter grades indicate how a particular plan compares to Medicaid plans across the country; the national Medicaid average receives a B. Plans scoring three percentage points above the average receive an A, plans 3-9 percentage points below the average receive a C, and plans more than nine percentage points below the average receive a D. The report card displays grades for asthma care, two measures of diabetes care, vaccination, blood lead testing, smoking cessation assistance, and four dental care measures. Participating plans are paid for their performance on these and other measures.