Billions at stake in CMS’ pay-for-performance rankings

Money is a powerful motivator. Look no further than the sports world for validation. The PGA’s FedEx Cup encourages golfers to earn “points” towards participation in playoffs that offer a big season-ending payoff. Tennis has a similar format with the U.S. Open Series where performance in a series of events equates to a huge prize purse. Both instances use hefty prize money to help ensure the top performers participate and at high levels. The Centers for Medicare and Medicaid Services (CMS) have applied this sports theory to its rankings system of Medicare Advantage (MA) and Prescription Drug Plans (PDP) plans. And there’s billions of dollars up for grabs for healthcare plans.

CMS Ups the Ante on Star Ratings

Since 2007 the CMS has posted rankings of MA and PDP plans to give consumers an informational tool when comparing and selecting plans. It was designed to help identify poor-performing plans and provide consumers with informed choices. The CMS rankings system—called Star Ratings—has always played an important role, not only as an informational tool but a mechanism to encourage quality and accountability with providers. With the passage of the Affordable Care Act (ACA), however, those CMS Star Ratings have a renewed importance for health plans in the form of big money and strategic business advantages.

Billions Up-for-Grabs for Health Plans

By tying bonuses to performance, the CMS upped the ante for all those playing. Insurers now have an added incentive to achieve for higher performance ratings. Not only is big money available—more than 3.1 billion in 2012, according to Kaiser Family Foundation—but plans awarded high-ranking status have extended enrollment periods and also can boast a high performing gold star “icon” associated with their plan. You can see how these two things can easily sway more enrollees their way.

How it Works

So how do these rankings work? MA plans are assigned a Star Rating for five different areas or domains: 1) Staying Healthy: Screenings, Tests and Vaccines; 2) Managing Chronic Long Term Conditions; 3) Member Experience with Health Plan; 4) Member Complaints, Problems Getting Services, and Improvements in Health; and 5) Health Plan Customer Service. PDPs are evaluated in four areas, too. The CMS then derives a summary score for each plan and assigns a rating. According to the new law, CMS will pay up to 5% of a health plan’s total yearly benchmark payments to those plans receiving four stars or higher. Pending the plan’s size, that could equate to big money. (For additional details visit www.medicare.gov.)

The changes have many organizations scrambling to make sure they are among the highest-ranking plans—which means achieving a 4 ranking but striving hard for a 5. But very few plans will receive the coveted five-star ranking; data shows only 2% earning top status.

How Plans Can Succeed

To achieve best practices, of course, every organization needs to take a holistic and strategic review of every facet of their overall business: member interactions, service and offerings; pricing and procedure; and operations and organizational structure. And it should be a company-wide priority. But there are two domains I believe should have a special focus: 1) Staying Healthy: Screenings, Tests and Vaccines; and 2) Managing Chronic Long Term Conditions.

Many complain that ratings system is heavily skewed towards preventive measures such as screenings for chronic health issues. Although that’s raised some criticism, it’s actually a great thing for plans. Why? Today two big things are changing the healthcare landscape: Technology and access.

Technology & Access: Driving Today’s Empowered Consumer

Today there is a new type of consumer. They are most likely armed with technology, on-the-go, and expect a higher level of customer access, information and service. The rise of digital, social and mobile gave rise to this trend. This goes for almost every demographic group—including seniors. The dark days of healthcare—lack of information, knowledge, access and understanding—are being replaced by open access and information. Those “walls” are being kicked down. The most successful healthcare insurers and plans will provide their members with convenient access to services and information that empowers them to take charge of their health.

At SoloHealth, our entire business model revolves around free healthcare access for today’s empowered consumer. Our nationwide network of SoloHealth Stations offer consumers free access to a comprehensive health screening, personalized health assessment, list of medical professionals for follow-up care, and unlimited abilities to educate and inform. Located conveniently in retail locations, it’s all done through a simple, easy-to-use self-service touchscreen kiosk. It takes less than seven minutes.

We are already in discussions with cutting-edge health insurers who want to bring new services and offerings conveniently to their members where they are frequenting—retail locations like pharmacies in Walmart and Sam’s Clubs stores. Imagine a member being able to quickly do routine screenings or learning valuable information at a kiosk while picking up a prescription or doing some shopping. It’ll hit on two CMS Star Rating points—routine screenings and customer satisfaction.

There are many technologies that plans can take advantage of to provide better more convenient access and services to members. There are mobile apps for checking activity levels, eating habits, and now even EKGs. There are technologies to digitally and efficiently remind people to take their necessary daily medications. There are a slew of “fitness bands” that do a remarkable number of health and wellness capabilities. And most every one of these are attached back to a data source—many cloud-based—so you can track, trend and share your results. And what about online services like website, social media and email communications? How engaged are you across all today’s digital channels?

Bottomline: Health insurers need to evaluate their current technology offerings and services and from the viewpoint of the consumer. What consumer-centric services can you be offering that would empower your members to conveniently take charge of their healthcare. Not only will you be empowering them towards better health but you’ll be striving toward your goal of that coveted 4-Star and 5-Star ranking. Much of the CMS Star Ratings is about perception: How do consumers perceive your plan and services offered? Start delivering on that service promise by leveraging the latest technologies and create positive member perceptions.

Need a little motivation? The CMS has more than three billion dollar bills to help.

Bart Foster is the CEO & Founder of SoloHealth.