The Million-Dollar Impact: Why Every Measure Counts

Medicare Advantage plans are learning a hard lesson about the high cost of missing the mark on quality of care. Recent lawsuits brought forth by Medicare Advantage (MA) plans have shed light on how overlooked measures and rounding disputes can impact star ratings, and the high cost to health plans when they fall short.  

In the MA industry, thorough documentation and a high level of accuracy in quality improvement is becoming more and more important. When the difference can be measured in the hundreds of millions of dollars, MA plans cannot afford to leave their quality scores to chance or the courts.

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How quality measure disputes are leading to costly lawsuits
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Last month, news broke that Elevance Health, a large national insurance company, lost its lawsuit with CMS regarding its Medicare Advantage Star Rating. Specifically, Elevance had raised an issue with the rounding of its overall star rating as well as the threshold of a particular quality measure.  

Elevance claimed its overall star rating of 3.749565 should have been rounded up to a score of 4. Instead, CMS had awarded Elevance a score of 3.5. Additionally, Elevance had failed to meet the threshold for the quality measure D01: Part D Call Center – Foreign Language Interpreter and Teletypewriter (TTY) Availability, which measures the ability of consumers to receive foreign language assistance when contacting Elevance. To meet the threshold of success for the score, CMS required plans to achieve a 99% success rate. Elevance, which only had a success rate of 98.4%, argued in the lawsuit that it was “mathematically impossible” to meet the required threshold given the sample size. Ultimately, the court sided with CMS, stating that its methodology followed the law.

Elevance Health is not the only payer bringing disputes with CMS to court over star ratings. Humana also introduced a lawsuit after its star ratings dropped this year, focusing on just three customer service phone calls. UnitedHealth also sued CMS over disputes in its star ratings. In that case, the judge ruled with UnitedHealth, and CMS recalculated the health plan’s scores.
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The critical importance of CMS Star Ratings to health plan performance
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The uptick in lawsuits associated with Medicare Advantage Star Ratings demonstrates just how critical the scores are to health plan success. Elevance Health’s recent loss, for example, will cost them $375 million in quality bonus payments. Even falling short on just one measure, such as the foreign language assistance interpreter and TTY measure, can make a difference of hundreds of millions of dollars by tipping a plan’s overall score in the wrong direction.  

Health plans lose out on more than direct bonus revenue when their Star Ratings decline; they face a direct impact on enrollment revenue. One analysis by Navigant, for example, found that one star rating can lead to a 12% increase in enrollment. That boost in enrollment pays dividends; an increase from 3 to 4 star rating could increase health plan revenue by up to 17.6%.

Recent lawsuits highlight the high stakes of every quality measure. Even one weak spot can jeopardize a health plan’s overall performance. With regulatory scrutiny rising, fueled by expanded RADV audits, the financial risk of neglecting any measure is a cost Medicare Advantage plans simply cannot absorb.

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For MA plans, there is no recourse for statistical variation
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Unfortunately for Elevance, the finding of its lawsuit confirmed that there is little recourse for disputes involving rounding or sample sizes. The U.S. Federal Judge who heard the case, Mark Pittman, wrote: “Understandably, Elevance would have preferred for those contracts to reach the next half-star tier. But the fact that they fell short does not give rise to a claim for relief under federal law.”

“In other words,” he continued, “it is not one which a federal court is well suited to second-guess. Absent any arbitrary and capricious conduct by CMS, this court is in no position to question the outcome of the star rating system.”

The case should serve as a warning to other MA plans. High attention to each and every measure, and capturing every single action pertaining to quality measures, is critical to maximizing quality scores. In the end, losing out on a star rating due to a rounding error or a dispute over a single measure can cost hundreds of millions of dollars, and recent lawsuits indicates courts may not be able or willing to intervene.

When all measures matter, quality improvement demands a heightened focus
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Recent moves by CMS have pointed to heightened scrutiny on the Medicare Advantage program.  The current administration has published estimates that MA plans may overbill CMS by $17 billion a year. Dr. Mehmet Oz, CMS Administrator, has stated, “We are committed to crushing fraud, waste, and abuse across all federal healthcare programs."

In this environment of increased scrutiny, MA plans cannot afford to lag on quality measures. A year-round approach to quality improvement, supported by powerful technology, is becoming essential for each plan to improve care documentation and ensure a high level of accuracy in quality measurement. To prioritize all measures, consider technology that incorporates:

• Unified retrieval: Leverage technology that enables chart retrieval, document ingestion, and clinical data aggregation to flow into a central repository accessed by both risk and quality teams.

• AI-powered abstraction: Incorporate AI for distinct logic for risk and quality, auto-validating findings, and surfacing evidence for coder review and abstractor workflows.

• Real-time data: Centralize all documentation and data lineage, making audit responses for compliance quick and reliable.

By taking this approach to quality improvement, MA plans can close care gaps more effectively while ensuring precise documentation for every measure. Plans that consistently capture each action not only maximize their quality scores but also secure a competitive edge. Leveraging technology brings greater predictability to star ratings, strengthens compliance, and reduces the risk of costly, avoidable lawsuits.

Health plans interested in taking their quality improvement to the next level with unified, AI-powered retrieval and clinical review should schedule a demo to tour Reveleer’s Quality Improvement Solution.