ADV Blog post

Proposed Changes to Medicare Stars Program are Poised to Advance Health Equity

By Annette Cutrino, VP Population Health Strategy, Healthfirst

As one of the nation’s largest not-for-profit health insurers, our membership is hugely diverse — we serve 1 in 5 New York City residents, including more than a third of the city’s Medicaid population, and cater to 70 different languages. While the COVID-19 pandemic highlighted and worsened health disparities and forced health leaders and policy makers to finally prioritize health equity, Healthfirst has been waging this battle for 30 years.

Though we have many successful interventions for our members, achieving health equity can only occur if everyone does their part.

It is paramount that the Centers for Medicare and Medicaid Services (CMS) pick up the baton and lead the nation in delivering health equity. This is why I was pleased to see CMS propose a rule that could help do just that. The proposed rule from the Centers for Medicare and Medicaid Services (CMS) is an important step forward in the march to make healthcare more equitable for Medicare Advantage beneficiaries with social risk factors (SRFs).

The proposed rule, released in late December 2022, would modify the Medicare Stars quality bonus program and reward plans that make the needed investments to deliver high-quality outcomes for the most vulnerable populations.

The rule proposes adding a Health Equity Index (HEI) into the Stars program. Doing so will go a long way to address the shortcomings of the Categorical Adjustment Index (CAI) that was implemented in Part C and D Star Ratings program in 2017. The Categorical Adjustment Index was originally developed as an interim adjustment to account for performance disparity among beneficiaries who are low income or disabled while awaiting a better methodology.

As a stop-gap approach, the intent of the Categorical Adjustment Index was to level the playing field for plans with high percentages of socioeconomically disadvantaged beneficiaries. Historically, these beneficiaries required greater attention and can often be left behind by our health care system. However, as designed, the CAI was limited in its impact on health equity as it failed to provide incentives for plans to improve health outcomes for beneficiaries with social risk factors.

And so, while the overall Stars program has effectively incentivized plans to make improvements overall, it has faltered in addressing inequities among the most vulnerable individuals.

The Health Equity Index (HEI) is structured in a thoughtful approach in that it:

  • Does not lower the expectations for health outcomes for members with Social Risk Factors, but instead encourages attainment of the highest level of health for all beneficiaries.
  • Supports continued improvement by including performance thresholds that can be adjusted over time.
  • Ensures those plans serving larger numbers of vulnerable members are rewarded appropriately by tying reward potential to plan Social Risk Factor membership volume.
  • Allows for the expansion of additional Social Risk Factors grouping into the Health Equity Index calculation in the future.
  • Compares performance of like-members to like-members, eliminating the need to identify and continuously update risk adjustment methodologies.

Ensuring that members with Social Risk Factors get recommended cancer screenings, comprehensive diabetes care, and medication management are essential to reducing real health outcome disparities among members. With the addition of the Health Equity Index, plans are now encouraged to invest in strategies to address disparities in healthcare outcomes and will certainly support CMS’s goal of advancing health equity. I look forward to CMS including the Health Equity Index (HEI) in the final rule.

In April 2023 CMS announced that a health equity index (HEI) reward will be added for 2027 Star Ratings.