The CMS star ratings challenge

Annually, the Centers for Medicare & Medicaid Services (CMS) releases star ratings, which measure the quality of care health plans deliver for its members. Launched in 2007, star ratings enable the CMS as well as consumers to compare health plans on metrics other than cost. Today, the CMS Five-Star Quality Rating System allows consumers to also compare health plans based on a payer’s performance, network and beneficiary reviews, in addition to premium costs.

Star ratings combine and average the scores reported for individual health-plan components of each plan (e.g., Medicare Advantage and Part D) for a comprehensive assessment of a health plan’s performance. CMS 5-star ratings are awarded to health plans that provide the highest quality of care and earn exceptional member satisfaction.

(Note: There are 46 quality and performance measures used for rating by the CMS.)

Each year, the CMS develops cut points—based on the performance of all plans for each measure over the previous year—which means that maintaining the same level of performance year after year is not enough to sustain a high star rating. Therefore, it becomes increasingly difficult for a health plan to move from four to five stars because, as all health plans improve their quality, the distribution of scores shift upward, in parallel.

Why are CMS star ratings important?

The Affordable Care Act of 2010 mandates the CMS to make quality bonus payments (QBPs) to Medicare Advantage (MA) organizations that achieve at least four stars in a 5-star quality rating system and, starting in 2012, the CMS incentivizes health plans to improve member experiences by increasing the QBP amount, based on their star rating.1 The goal is to ensure health plans commit to improving their performance as it relates to disease management, preventive care and customer service. The higher the ratings, the larger the bonus payments health plans receive from the government. With billions of dollars at stake for payers with CMS star ratings above 3.5, health plans want to earn four stars or higher as quickly as possible.

New CMS star ratings criteria 2021

While there are no new measures introduced, the CMS increased the weight of member experience, complaints and access measures from 1.5 to 2. This affirms the CMS’ commitment to serve Medicare beneficiaries by putting patients first, including their assessments of the care received. The CMS also eliminated the requirement for health plans to submit Healthcare Effectiveness Data and Information Set (HEDIS) and Consumer Assessment of Healthcare Providers and Systems (CAHPS) survey data.2 

With the CMS release of the Final Rule for Contract Year 2021 on May 22, 2020, Medicare Advantage (MA) plans now have some near-term clarity regarding the many star-rating proposals made earlier this year. However, achieving (or sustaining) strong star ratings—with the increased weight of the CAHPS and administrative measures—will require more proactive, nuanced activities than most plans are accustomed to performing.

The CMS Star Ratings Plan Preview periods are now active and—like so much of life in 2020—everything will be unique. Given the dynamic nature of the Medicare Advantage environment and of healthcare policy, insurers and other stakeholders must keep a watchful eye on several industry trends.

Read More – Medicare Star Ratings Changes 2021 

Industry trends

In the highly regulated healthcare insurance industry, thousands of appeals and grievances are filed each year. For example, a member may want the plan to reconsider a decision or a provider might dispute how a claim was processed.

Combined, these appeals and grievances can cost health plans millions of dollars each year. And, with more individuals projected to obtain healthcare insurance within the next few years, this means that health plans can expect a proportionate increase in A&G cases, as well.

With changing regulations, complexities are also likely to increase. Mismanagement of appeals and grievances can lead to severe penalties, such as lower Medicare star ratings, on the moderate side, while contracts and licenses can be cancelled, at the extreme end of the spectrum.

The CMS continually updates the performance levels required for ratings and, over the past several years, the trend shows it’s getting harder for healthcare payers to achieve four stars. So it should come as no surprise that it’s even harder to achieve a five-star rating; in 2019, only 21 plans received a five-star rating whereas 24 healthcare payers received the top rating in 2018.3

Given these trends, health plans must act now to improve their grievances and appeals processes to help achieve higher star rating. And Inovaare’s Appeals & Grievances solution empowers them to do just that through cloud-based automation.

A&G automation with single-click compliance

Digital transformation is no longer an option. It’s a necessity for every health plan.

To stay nimble within a rapidly changing regulatory environment, payers must carefully assess what automation technologies must be deployed to meet their unique A&G business challenges. But this much is certain: Digitization can reduce costs, decrease penalties, optimize workflows and improve productivity, all of which will boost a payer’s star ratings.

How it works

Inovaare’s Appeals and Grievances solution empowers operations teams through real-time data visibility that supports accurate monitoring, better decision making and expedited resolutions of all A&G cases. Whether a case is submitted via mail, email, fax, a web portal, member services or even on paper forms, all information gets integrated into Inovaare’ s A&G system in real time so compliant reports can be submitted with click of a button.

Seamless integration with core claims, utilization management and other transaction systems grants flexibility and scalability to all processes related to appeals and grievances. This intelligent system notifies A&G specialists of duplicate cases instantly and it also prevents fraudulent cases from being processed, which saves valuable time and resources.

Inovaare’s solution empowers compliance and A&G teams to collaboratively scrutinize and validate claims and authorization—as well as all pertinent member and provider information—within a unified interface. This makes in-depth investigation quick and easy for every user.

Acknowledgement, extension letter and determination letters are automatically generated, using pre-populated formats to ensure continuous compliance. Inovaare’s A&G solution also automatically calculates turnaround time for resolution of cases and then generates a due date, making the entire process more compliance driven.

Improved member experience is your reward

A positive customer experience is a key to business growth and plays a critical role in achieving high star ratings. Ideally preventing or, at a minimum, mitigating and resolving issues faster while ensuring consistency across all processes are critical to keep the customer happy. Inovaare’s comprehensive A&G solution with the optional Complaint Tracking Module allows health plans to track all cases at each stage of the process to ensure timeliness without compromising compliance.

If you haven’t yet, it’s time to break down silos throughout your health plan and facilitate real-time collaboration across all departments. Inovaare’s A&G software optimizes your processes so you can handle large volumes of data, reduce costs and ensure transparency to prevent fraud at every step. Take a bold and innovative approach to digitally transform the way your health plan manages appeals and grievances and watch your star ratings … and revenue … rise. Appeals and Grievances

Craig Giangregorio, A&G Industry Expert


  1. Centers for Medicare & Medicaid. 2012 Quality Bonus Payment Distributions and
     Administrative Review Process for Quality Bonus Payments and Rebate Retention 
    Allowances. CMS. December 2010. 
  2. Centers for Medicare & Medicaid. Year 2021 Medicare Advantage and Part D Final
    Rule (CMS-4190-F1) Fact Sheet. 
    CMS Newsroom. May 2020.
  3. Centers for Medicare & Medicaid. Medicare provides continued access to high-quality
    health coverage choices in 2019

    CMS Newsroom. October 2018.