Policy, Payers

CMS is bringing star quality ratings to health exchange plans

Rolling out the ratings nationwide is part of the Trump Administration’s larger initiative to inject cost and quality transparency into the healthcare system.

In an effort to boost access to quality information for consumers purchasing health insurance coverage, CMS is requiring the display of star ratings for plans sold on the federal and state health exchanges starting with the 2020 Open Enrollment period.

The five-star Quality Rating System, which was established by the Affordable Care Act, is intended to give patients insight into the performance of a health plan based on a number of measures including network strength, current patient surveys and how the plan is managed.

Plans are given an overall rating from one to five stars, as well as ratings in three discrete categories: Medical Care, Member Experience and Plan Administration. The information will be accessible on healthcare exchange websites like Healthcare.gov.

Over the past two Open Enrollment periods, CMS has piloted exchange plan star ratings in a number of states including Virginia, Michigan and New Hampshire and is now expanding the program nationwide starting in the fall.

The 2020 Open Enrollment Period is November 1, 2019 to December 15, 2019.

“Knowledge is power, and for the first time, consumers will have access to meaningful, simple-to-use information to compare the quality, along with the price, of health plans on Exchange websites, including HealthCare.gov,”  CMS Administrator Seema Verma said in a statement.

“This addresses our strongly held commitment to equip consumers with the tools they need to find the best choice possible. Increasing transparency and competition drive better quality and cost, with consumers benefitting the most.”

The agency did caution that in some cases, particularly when plans are new or have low enrollment figures, star ratings may not be available. The lack of star ratings do not necessarily mean that the plans are lower quality.

Some stakeholders have identified room for improvement in current star rating systems, which already exist in certain markets including for nursing homes and among Medicare Advantage plans.

In a report released earlier this year, the Medicare Payment Advisory Commission suggested an overhaul to MA star ratings, which the organization said allowed payers to inflate their performance and gain billions in extra Medicare dollars.

Rolling out the ratings nationwide is part of the Trump Administration’s larger initiative to inject cost and quality transparency into the healthcare system.

The expansion of the star ratings program is on the other side of the coin from the government’s price transparency push.

Last month, CMS proposed a rule requiring providers to publish payer-negotiated healthcare rates that include enforcement tools for bad actors including monitoring, auditing, corrective action plans and monetary penalties of $300 a day.

Under the proposal, providers would be required to make public their “standard charges” which include their chargemaster prices, as well as the payer-specific negotiated rates. The proposed rules, which apply to the roughly 6,000 hospitals that take Medicare, would go into effect in January 2020 if finalized

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