CMS to Delay Star Ratings for Plans in Duals Demo

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By Mindy Yochelson

Nov. 9 — The Centers for Medicare & Medicaid Services said in a Nov. 6 memorandum that it plans to post quality data on health plans that participate in its demonstration program that coordinates care for beneficiaries dually eligible for Medicare and Medicaid while it constructs a quality star rating system for them.

Until it develops the quality system for the plans, known as Medicare-Medicaid plans (MMPs), the agency, starting in 2016, will put quality performance data, including how MMPs compare with one another, on the Medicare-Medicaid Coordination Office website.

“We believe this interim solution provides consumers and researchers with useful performance data while we construct the MMP star rating system,” the memo said.

The overall picture of MMP performance data would be linked on

Data on Plan Finder 

The demonstration is in 13 states, 10 of which work with health plans as part of the demo's capitated model. The state and the CMS contract with health plans or other qualified entities that receive a prospective blended payment to provide enrollees with coordinated care.

Called the Financial Alignment Initiative, the demonstration was launched in 2011 with the goal of integrating Medicare and Medicaid benefits for dual eligibles in the areas of primary, acute, behavioral health and long-term services and supports.

The CMS is working on a star rating system for the MMPs and said it will be similar to other star rating systems it has developed.

However, “a new, fully mature star rating system will not be in place during the testing of the Medicare-Medicaid capitated financial alignment model,” the agency said. Nonetheless, “we intend to start work now to prepare for potential future expansion of the capitated financial alignment model.”

Will Demo Continue?

The CMS, however, has not decided whether to continue the demo.

That decision will be “made by the Secretary in coordination with CMS and the Office of the Chief Actuary based on whether findings about the initiative meet the statutory criteria for expansion,” the memo said.

The demonstrations have faced a variety of challenges, including the need for more efficient data collection and exchange, figuring out how to measure the most important outcomes and determining how to transition enrollees to other systems of care when MMPs fail to renew.

Tim Engelhardt, director of CMS's Federal Coordinated Health Care Office, said recently that he's optimistic the states will be willing to continue for an extra two years. In July, participants were asked to extend the scheduled end dates for their three-year demonstrations.

Limited Time

“Because of the limited time necessary for development of measures, a comprehensive star rating system for MMPs would not be possible until after the demonstrations are currently scheduled to end,” the memo said.

However, as part of its longer-range plan, the agency asked the public for input by Dec. 21 on designing the MMPs' star rating system and on the interim proposal.

For the rating system, the CMS outlined a number of goals, such as measuring quality across the full spectrum of Medicare and Medicaid services, including long-term services and supports and treatment of behavioral health and substance abuse. Where feasible, measures would allow comparison of MMP performance with other MMPs, Medicare Advantage (MA) plans and fee-for-service Medicare.

Interim Solution

While it constructs the new rating system, information will be posted “on how MMPs perform on important quality measures and how individual MMPs perform on these measures compared to one another for each demonstration.”

Starting in 2016, data will be made available on MMP performance on Parts C and D quality measures and on the demo's eight core reporting requirements.

“These eight measures would add important measures addressing the treatment and management of mental illness and substance abuse, and measure MMP success in fostering community living,” the memorandum said. The eight include antidepressant medication management, comprehensive health risk assessment and care transition record following inpatient discharge.

Risk Adjustment

The memo on the star rating system for MMPs follows another from CMS that sheds light on how it intends to handle plans that care for large numbers of dual eligibles.

In an Oct. 28 memo, the CMS said it's considering changes to the structure of its risk adjustment model in order to improve the “predictive ratios for full benefit and partial benefit dual eligible beneficiaries in the community.”

Under risk adjustment, Medicare reimburses managed care plans based on the health status of their members as well as other demographic factors.

The model would create “up to six separate community segments based on dual and aged/disabled status in the payment year,” the memo said. The agency said its “analysis indicates that these subgroups have distinct cost profiles.”

CMS Deputy Administrator Sean Cavanaugh, in comments about the situation earlier in October, said the memo would respond to complaints that MA plans that enroll a substantial portion of dual eligibles or receive the Part D drug program low-income subsidy weren't receiving adequate funding.

This is because the payment system doesn't sufficiently adjust for the higher cost of dual eligible beneficiaries, Cavanaugh said (203 HCDR 203, 10/21/15).

Comments Due Nov. 25

In the memo, the agency invited the public to comment on the potential changes by Nov. 25.

“In the coming months, we will share our analysis with stakeholders and, if appropriate, propose modifications to the model to improve predictive accuracy in a future year’s process,” the CMS said.

The memo was praised by Association for Community Affiliated Plans (ACAP) CEO Margaret A. Murray.

“CMS confirmed what ACAP has long been saying, that the Medicare Advantage (MA) risk-adjustment system under-predicts the costs of full-benefit dual eligibles,” she said.

In a Nov. 5 letter to Cavanaugh, Murray asked the CMS to implement the proposed changes to the risk-adjustment model for MA plans in 2017.

Further, ACAP wants the CMS to make retrospective payment adjustments to MMPs and others that care for large numbers of dual eligibles “to reimburse plans for these under-payments,” she wrote.

To contact the reporter on this story: Mindy Yochelson in Washington at

To contact the editor responsible for this story: Janey Cohen at