Reprinted with AIS Health permission from the October 22, 2020, issue of Health Plan Weekly.

Based on current enrollment figures, virtually every Medicare beneficiary who signs up for a stand-alone Prescription Drug Plan (PDP) in 2021 will be enrolled in a plan rated 3.5 stars or higher, CMS estimated recently. However, only 17% of beneficiaries are in plans with 4 or more stars for 2021.

That dynamic is unlikely to shift unless CMS opts to pay PDPs bonuses for higher star ratings, an idea that hasn’t been discussed seriously by policymakers in recent years, industry insiders say.

“If you look at the distribution of Part D stars, you can see that 81% of members are in those enormous plans that have landed organically at about a three-and-a-half-star performance zone,” Melissa Newton Smith, executive vice president of consulting and professional services at HealthMine, tells AIS Health.

“That’s an interesting landing spot — this is telling us this year that PDPs are just not interested in pursuing 4 or higher star ratings without a financial incentive tied to it,” Smith says. “People don’t want to be 3 or fewer stars, but they don’t care a lot about being 4 or more stars either. And that 3-and-a-half stars zone is just a natural, organic industry landing spot for performance. It’s the sweet spot.”

Overall, CMS estimates that based on current enrollment figures, 98% of 2021 stand-alone PDP members will be enrolled in plans with 3.5 stars or higher, up from 70% in plans with 3.5 stars or higher in 2020. Only 2% of members — some 13 contracts — are in plans that received 3 stars or fewer.

“The members are flocking to large plans,” Smith says. “The PBM construct of operations with the retail pharmacy networks is doing what it needs to do.”

The average star rating for stand-alone PDPs rose to 3.58 in 2021 from 3.5 in 2020. That average has stayed in a fairly narrow range — from a low of 3.34 in 2019 to a high of 3.62 in 2018 — over the past four rating years.

Higher-performing PDPs are rare: only about 17% of PDP enrollees are in contracts with 4 or more stars, and only 0.13% of Medicare beneficiaries enrolled in stand-alone PDPs are in contracts with 5 stars. In fact, only five PDP contracts earned 5-star ratings: Tufts Health Plan, Inc., HealthPartners, Inc., UPMC Health System, Excellus Health Plan, Inc., and Health Alliance Medical Plans.

The average star rating for Medicare Advantage-Prescription Drug (MA-PD) plans is 4.06 for 2021, down slightly from 4.16 in 2020, according to CMS. Most Medicare beneficiaries enrolled in MA-PD plans — around 77% — will be in plans with 4 or more stars in 2021, a drop from 2020, when approximately 81% of MA-PD plan enrollees were enrolled in plans with 4 and 5 stars (RDB 10/24/19, p. 1). CMS points out that only 69% of beneficiaries were enrolled in such plans in 2017.

Tom Kornfield, a consultant at Avalere Health who works on MA and Part D issues, says it’s notable that so many MA-PD plans — 32 contracts out of 396 in total — lost their 4-star status for 2021. Kornfield tells AIS Health that he’s still analyzing why this drop took place.

Almost half — about 49% — of MA-PD plans will have an overall rating of 4 stars or higher for 2021, up from about 45% in 2017 but down slightly from last year, when around 52% of plans had an overall rating of 4 stars or higher. A total of 21 MA-PD plans earned 5 stars for 2021.

Bonuses propel better performance among MA-PD plans even when consumers don’t appear to worry too much about the star ratings their plans get, Smith says.

High Ratings Aren’t Crucial for Sign-Ups

“There’s a fair amount of evidence that members don’t particularly care even what their MA-PD plans’ star rating is, let alone their PDP star rating,” Smith says. “On the MA-PD side, members care about whether their medications are covered, and they care about whether their doctors are in the network. On the PDP side, what they really care about is whether their medications are covered and what the cost structure looks like. The star rating is just not generally a factor in buying decisions for consumers.”

Kornfield argues that consumers may care somewhat about a plan’s star rating, but adds that other factors — such as formularies and prices — play a much larger role in decision-making. If all other factors involved in the choice are similar, then the star rating might be a tie-breaker, he says. “The medications, the premium and the out-of-pocket expenses are the key measures that people are looking at.”

There were no new measures introduced for the 2021 star ratings, although CMS increased the weight of patient experience/complaints and access measures from 1.5 to 2, reflecting the agency’s emphasis on consumer experience.

Stand-alone PDPs are doing well on administrative measures, which Smith says isn’t surprising. The plans also tend to do well on the call center measure and the foreign language interpreter measure, where the average is more than 4 stars, she says. Performance is extremely high — 4.9 stars overall — on the price accuracy measure, she observes.

PDPs also had a near-perfect average 4.9 stars overall on Complaints About the Drug Plan, up from an average of 4.4 stars in 2020. The Appeals Upheld measure is far lower, with an average of 3.1 stars, down from 3.3 stars in 2020. Members Choosing to Leave the Plan rose from an average 3.8 stars in 2020 to 4.1 stars in 2021.

PDPs have struggled with the medication adherence measures, according to Smith, who notes that “none of the adherence measures had a national average over 4.0 stars.” The Statin Use in People with Diabetes measure had a national average of only 3.0 stars, she says, unchanged from 2020. In addition, one of the adherence measures — Medication Adherence for Hypertension (RAS antagonists) — had a national average of only 3.1 stars, down slightly from 3.2 stars in 2020.

PDPs Improved Diabetes, Statin Scores

Among the medication measures, PDPs performed best on Medication Adherence for Diabetes Medications, with an average of 3.9 stars, up from 3.3 stars in 2020. Medication Adherence for Cholesterol (Statins) rose slightly from an average of 3.3 stars in 2020 to 3.6 stars in 2021, and MTM Program Completion Rate for CMR also rose from 3.3 stars in 2020 to 3.6 stars in 2021.

Meanwhile, the two Part D Consumer Assessment of Healthcare Providers and Systems (CAHPS) measures were double-weighted this year, Smith points out: Rating of Drug Plan and Getting Needed Prescription Drugs. The Rating of Drug Plan measure was unchanged year-over-year at 3.5 stars on average for PDP plans, while Getting Needed Prescription Drugs rose slightly, from 3.5 in 2020 to 3.6 in 2021.

Overall, results on many of the Part D measures make it impossible for plans to achieve higher star ratings, Smith says. “Those are pretty hard headwinds to overcome,” she says. “You pretty much can’t get to a 4-star average without both CAHPS and adherence. The mathematics is just not there with only 14 measures overall.”

Both Kornfield and Smith say it would take financial incentives — most likely in the form of star-based bonus payments — for stand-alone PDPs to get serious about improving their star ratings. “There’s been a fair amount of industry chatter over the years” about the potential for implementing stars-based bonuses for PDP plans, Smith says. The same issue exists for Affordable Care Act individual marketplace plans, which also have star ratings attached but no bonuses, she says. However, the idea of implementing bonuses has yet to gain traction among policymakers.

MA-PD plans are interested in improving their Part D measures, since those contribute to their overall star rating and to their opportunities for bonuses, Kornfield says, but the same does not hold true for PDP plans, since they don’t receive bonuses. “It’s sort of the same story every year, in terms of the way that star ratings look for the stand-alone Part D plans,” he says.

by Jane Anderson