By Jane Norman, CQ HealthBeat Associate Editor
April 2, 2013 -- The insurance industry landed a victory last week when the Obama administration backed away from a proposed cut in Medicare Advantage plans. And insurers also scored a second coup when officials delayed proposed changes in the star rating system for awarding bonuses to plans.
Under the five-star rating system, Medicare Advantage plans are rated from one star to five stars, with five being the best. The idea is to give consumers a better idea about the quality of their private plans.
The star scores are based on how well plans do on more than 50 performance measures, and in 2012 the plans began receiving bonuses based on these ratings. Most enrollees are in plans with at least three or three and a half stars.
But in an initial proposal in February, the Centers for Medicare and Medicaid Services (CMS) proposed a new method for computing the star scores that got a cold shoulder from both insurers and members of Congress.
House members in a March 27 letter protested that the CMS proposed change could mean some "popular" plans would find it harder to achieve four or five stars, and they asked the agency to delay implementing the new policy.
"Further changes to the star rating should be transparent, made prospectively after the end of the current plan performance period and allow for input from the stakeholder community and members of Congress," the lawmakers said.
In their response last week, CMS officials said they have been considering various ways to better reflect the true performance of the private plans. Currently, each individual quality measure receives a star rating and the stars are then averaged to obtain an overall summary score. CMS proposed to instead use a system in which scores for each underlying individual measure were computed and then averaged, thinking it might bring more precise results.
But in their announcement last week, officials said they have now opted to delay changes until more research can be done. "We hope to present the results of our additional research to plans this summer," they said.