Have you ever wondered what the Centers for Medicare and Medicaid Services (CMS) star ratings mean and how to use them to choose a health plan? In this article, we’ll cover what you need to know and explain how we use the CMS 5-star rating system to help you choose a plan with the quality of care you deserve.
We’ll answer the following top questions and many more:
[niche_faq cat=”4″ faq=”1,2,3,4″]
What are the Medicare Star Ratings?
When Medicare Part D (prescription drug plans) and Medicare Part C (Advantage plans) were signed into law in 2003, CMS created a complex quality of care measurement system to grade all private health plans. CMS uses the same type of grading system to measure the performance of its healthcare providers.
The benefit of the CMS grading system is that it rolls up many measurements into a single final grade. This final grade allows us, Medicare beneficiaries, to compare health plans at-a-glance.
Here’s what each star means:
- 5-Stars (★★★★★): Excellent
- 4-Stars (★★★★): Good
- 3-Stars (★★★): Average
- 2-Stars (★★): Below Average
- 1-Star (★): Poor
What are the Medicare 5-Star Measures?
CMS reviews the performance of all health plans annually and issues new star ratings each October in time for the Annual Election Period (AEP). So, if you choose a 4-star plan last year, it may only be a 3-star plan this year. Plan ratings change from year to year.
CMS rates Medicare Advantage plans, including Special Needs Plans (SNP), based on their performance in the previous year. They use five different rating categories to get to an overall star rating:
- Staying healthy: screenings, tests, and vaccines
- Managing chronic (long-term) conditions
- Plan responsiveness and care
- Member complaints, problems getting services, and choosing to leave the plan
- Health plan customer service
CMS rates its Part D plans based on their performance in four different categories:
- Drug plan customer service
- Member complaints, problems getting services, and choosing to leave the plan
- Member experience with the drug plan
- Drug pricing and patient safety
IMPORTANT: A plan’s star rating is one of many factors you should consider when choosing a health plan. Also, take into consideration a plan’s coverage and costs. For instance, if you are considering a Medicare Advantage plan, be sure the plan’s copays work for your health needs. This is particularly important if you have one or more chronic conditions. MedicareWire helps by offering a downloadable summary of benefits on each plan page.
What is the Purpose of the Star Ratings System?
The Medicare star rating system has several purposes. For the Medicare beneficiary, the rating system assists with health insurance and provider selection (i.e., is this plan bad or good?). For the plan providers (i.e., HMO and PPO organizations), the rating system helps them understand overall plan member satisfaction. A plan’s performance also determines the payments they receive from Medicare. For instance, 5-star plans are compensated more.
For healthcare providers, the quality measures help identify potential patient safety issues. The Centers for Medicare and Medicaid Services’ ratings identify which contracts to sanction for poor performance.
Are you wondering if Original Medicare is measured by the same 5-star system? Unfortunately, this wouldn’t be practical or even meaningful, as Original Medicare is a Private Fee-for-Service (PFFS) system. There’s no way to assess plan quality with Original Medicare because it isn’t a plan and has no way to track wellness. However, MedicareWire has created its own 5-star reviews for Medigap plans.
Do Medicare Plans Have To Provide Star Ratings?
Yes. Every Medicare-approved plan has a unique contract ID. Each year, the insurance companies must self-report on each of their contracts. For Medicare Advantage plans including Part D, 45 different measures are sent to CMS. Each measure is rolled up into the nine major categories listed above.
Where Can I Find CMS Star Ratings?
If you’re wondering, “Where can I find the most recent Medicare star ratings?”, MedicareWire publishes the star ratings for all plans in its Medicare Advantage plan directory (here), Medicare Part D plan directory (found here), and Medicare Advantage Special Needs Plan directory (on this page). You can also find star ratings on Medicare’s own plan finder tool.
What is the Medicare 5-Star Special Enrollment Period?
Special Enrollment Periods (SEPs) allow beneficiaries to switch their Medicare Part D or Medicare Advantage plan outside of the Annual Election Period. One of the SEPs is for 5-star plans.
CMS uses the quality rating data gathered from the previous year to determine a Medicare Part D or Medicare Advantage plan’s quality rating for the new year. Those plans with a 5-star score have the ability to get additional plan members.
Who is eligible for this SEP?
- Beneficiaries enrolled in any Medicare Advantage or Medicare Part D plan (including those that already have a 5-star plan)
- Beneficiaries currently enrolled in Original Medicare and meet the eligibility requirements for Medicare Advantage
When can I use the 5-star SEP?
According to Medicare:
If a Medicare Advantage Plan, Medicare drug plan, or Medicare Cost Plan with a 5-star rating is available in your area, you can use the 5-star Special Enrollment Period to switch from your current Medicare plan to a Medicare plan with a “5-star” quality rating. You can use this Special Enrollment Period only once between December 8 and November 30.
Enrollments from January to November are effective the month following the enrollment request.
When Does the Star Rating Cliff Occur?
If you are an actuary, you might be wondering about the progression from performance to the actual star rating. The first year that a plan can receive a rating from CMS is three years after the performance data is submitted. For instance, a plan that is first available in 2022 may have its initial star rating no sooner than 2024, which will affect payments to the plan in 2024.
More Information About The CMS Stars System
Most of the information above talks about the star rating system in relation to Medicare health plans. The rating system for plans is relatively straightforward. This isn’t the case for healthcare providers. Each type of healthcare provider (e.g., hospital, nursing home, home health agency, etc.) has its own measurement system.
Data sources used to measure the healthcare provider performance include:
Clinical quality standards:
- Health Effectiveness Data and Information Set (HEDIS®)
- Pharmacy Data (Prescription Drug Event-PDE), which includes medication adherence
- Laboratory data
- Health Outcome Survey (HOS) data (https://www.hosonline.org/Content/Default.aspx)
Member experience, satisfaction, and complaints with Plan:
- Consumer Assessment of Healthcare Providers and Systems (CAHPS®) (https://cahps.ahrq.gov/about-cahps/index.html)
- Medicare Advantage (MA) and Prescription Drug Plan (PBP) CAHPS (https://cms.gov/Research-Statistics-Data-andSystems/Research/CAHPS/mcahps.html)
- Complaint Tracking Module
- Grievances and Appeals
Administrative performance and compliance standards §
- CMS Audits
- Pharmacy (Part D) drug safety and drug pricing accuracy
- Customer Care Performance
Call 1-855-728-0510 (TTY 711) for plan assistance.
If you qualify for Medicare and don't know where to start, MedicareEnrollment.com, an independent HealthCompare insurance broker, has licensed insurance agents who can help you with your Medicare enrollment options, Mon-Fri, 8am-9pm , SAT 8am-8pm EST.
Citations & References
medicare.gov
- Find a Medicare plan
https://www.medicare.gov/plan-compare/ - Find a Medicare plan
https://www.medicare.gov/find-a-plan/staticpages/rating/planrating-help.aspx - Medicare.gov: the official U.S. government site for Medicare | Medicare
https://www.medicare.gov/
cms.gov
- Program history https://www.cms.gov/About-CMS/Agency-Information/History
- Five-Star Quality Rating System | CMS
https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/Certificat… - https://www.cms.gov/Medicare/Prescription-Drug-Coverage/PrescriptionDrugCovGe…
- CMS 1696 | CMS
https://www.cms.gov/Medicare/CMS-Forms/CMS-Forms/CMS-Forms-Items/CMS012207.htm…