How Medicare Advantage Plans Can Prioritize Quality Amid Continued Turbulence

Medicare Advantage is more popular today than it’s ever been, with more than 50% of older Americans choosing it as the option rather than traditional Medicare. As more and more of the U.S. population ages into Medicare eligibility in the coming years, Medicare Advantage is expected to continue its current trend of growth.

Though Medicare Advantage continues to be a successful line of business for most payer organizations, it’s causing challenges for many providers. Reimbursement rates aren’t growing along with the cost of providing services, and there are increased pressures related to prior authorization and denial of services. More hospitals and health systems (32 as of a recent count) are responding by terminating their contracts with Medicare Advantage plans, opening bigger issues for patients accessing care.

Driving this trend is a changed dynamic in the post-pandemic landscape. With doctors’ offices back open, patients are seeing their care providers in person again instead of through virtual appointments. In addition, due to delays in seeking care during Covid, more patients are suffering from advanced chronic conditions and severe illnesses, requiring a more intensive and expensive level of care. On top of that, the demand for services is outpacing the growth of available physicians.

Along with increased utilization putting more pressure on health plans, the Centers for Medicare & Medicaid Services (CMS) has recently tightened up its requirements for health plans to achieve higher ratings from the Medicare Advantage and Part D (MAPD) Star Ratings program, which impact the level of reimbursement they receive from CMS for managing its members. Since its introduction in 2007, the Star Ratings system has made it easier for Medicare customers to compare health plans when enrolling by assigning them ratings on a five-star scale.

Not only do higher-rated plans attract more members, plans with four stars or higher get a 5% revenue bonus from CMS for every enrolled member. Those extra dollars can be used for anything directly correlated to members: additional benefits, elevated care management, bringing on new vendors, or advanced technology to improve members’ care or the cohesiveness of their experience.

This system effectively tips the scales in favor of higher-rated plans. Plans with fewer stars receive lower revenue, which translates to less money available to invest in competitive or additive benefits that might attract new members. Five-star plans have the added benefit of being able to enroll members (either newly aged in or switching from other plans) all year round, not only during the annual enrollment period from October through early December.

This momentum allows five-star plans to be more generous and offer richer products, which can help them recapture higher scores in the future. Conversely, once a plan’s Star Ratings start trending downward, it can be a major challenge to turn it around, given that there’s less available money to invest in making improvements.

The unfortunate truth is that change doesn’t happen overnight. It can take a number of years of investment in a plan, often while losing money, before the ship can be turned around. Due to the timing of measurement periods, the effects of any improvement efforts made now, in early 2025, will most likely not be reflected until the Star Ratings for 2027, at the earliest, which will be published in October 2026.

With that in mind, organizations with underperforming Medicare Advantage plans can, and should, start taking steps now to establish a strong foundation that can sustain long-term success.

Prioritizing member satisfaction and engagement

HEDIS (Healthcare Effectiveness Data and Information Set), a protocol of measures that determines a plan’s quality of care, is now CMS’s most heavily weighted measure group for Star Ratings, taking the place of patient-submitted CAHPS (Consumer Assessment of Healthcare Providers and Systems) surveys. Plans looking to improve can do so in a variety of ways, including improving member engagement, promoting a culture of continuous improvement, and using technology to streamline data collection and improve data quality. Improving the ease of getting care results in HEDIS improvements and can lead to improved CAHPS performance.

Customer service is at the heart of improving member experience and engagement. Traditionally, health plan customer service has been measured by how quickly a representative can get a member off the phone to lower the cost of that transaction. This, combined with complex customer service menus that can make it cumbersome to connect with a human, sometimes make members so frustrated and disillusioned that they don’t seek care at all.

Improving member experience and engagement comes down to addressing the fundamentals: spending more time with members, hearing their concerns and giving accurate responses. Technology can be a great enabler of an elevated customer service experience that melds administrative capabilities with clinical expertise, yielding higher satisfaction while improving quality health results.

Although it costs health plans more upfront to offer a stronger customer service experience for their members, there are clear long-term benefits for doing so. Particularly when members are elderly, low-income or chronically ill, plans can improve care and lower their long-term health costs by helping members get to their doctor for preventative care or utilizing other services available to them. Not only does this create healthier, happier members, it results in higher customer satisfaction, which in turn can create a dual positive impact on a plan’s Star Rating.

Better service through technology

From retail to banking, countless other industries are evolving in the way they engage customers. Using new technological tools, businesses can personalize interactions, recommend products and provide other targeted services. Medicare Advantage plans should be taking inspiration to create a stronger experience for members by engaging them in a similar, seamless way.

Every day, around 10,000 Americans turn 65 and age into Medicare. These customers are the first technology-enabled generation, preferring text messages and emails to more traditional channels of communication, like physical mail and phone calls. Health plans should focus on identifying their members’ preferences and adopting technologies that are capable of communicating with them holistically and personalized.

As artificial intelligence continues to advance, health plans can take advantage of its capabilities to make each member touchpoint an opportunity to deliver highly personalized, beneficial services. Customer service agents can use AI to get a full view of a member’s needs, habits, behaviors and personal health history before even picking up the phone to assist them. Then, they can recommend an action or create a behavior — a checkup, a mammogram, a colonoscopy — and even help set up an appointment.

Investing in infrastructure

Health plans looking to make ambitious, systemwide customer service improvements often run into a big obstacle: They struggle to house the timely, accurate member data that’s essential for making informed decisions.

Although costly, investing in infrastructure upgrades is the best first step for health plans wanting to see a noticeable improvement in the level of service they deliver to members. Data warehouses and data capture are areas that should be modernized, as well as the ways that plans are extracting data and building on top of it. 

Health care organizations arguably have deeper, richer personal data about their customer bases than any other industry. Health plans that aren’t maximizing their data to its full potential are going to fall behind.

A long-term focus

For any health plan, the ultimate goal should be to drive better health outcomes for members. By building a better infrastructure designed to prioritize personalized, preventative care, with industry-leading service, it’s possible to catch chronic conditions earlier and get ahead of high utilization in the long term.

Not only does this have the side benefit of increasing a plan’s Star Rating along the way and potentially drawing in new members, it helps drive costs down for all parties in healthcare.

Photo: marchmeena29, Getty Images

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