Do Consumers Actually Use CMS Star Ratings?

People use reviews to decide on all kinds of things. The best nearby pizza joint. The highest quality furniture. Books. Movies. Tech. Uber drivers. AirBnB guests. Plumbers. You name it, people rate it, and those ratings affect how brands, products, and people appear to consumers.

Ratings are intended to make our choices easier. They show us the best a category has to offer, so we can be more confident that we’re making a good decision.

So why not bring this helpful, consumer-focused system into the world of Medicare? Choosing a Medicare-Advantage plan is a huge decision, and the options quickly become overwhelming to the average consumer.

That’s the thinking behind CMS star ratings.

But unfortunately, it looks like most consumers don’t even know CMS star ratings exist. A recent survey found that only 22 percent of MA-PD members knew about CMS star ratings, let alone used them to choose a plan.

Despite that though, more consumers are choosing MA-PD plans with higher ratings. Since it looks like most consumers aren’t aware of star ratings, it’s possible that the high CMS star ratings are a byproduct of other factors consumers use to pick a plan. Medicare beneficiaries may focus on the specific quality factors that affect them more than the overall star rating.

In other words, just because a plan has a high CMS star rating doesn’t necessarily mean it’s the right plan for an individual consumer. But high ratings may increase the likelihood that it is.

It’s worth noting that the survey showing consumers aren’t aware of CMS star ratings was limited to patients with chronic conditions, and the vast majority of those who didn’t know about the ratings said they would use them if they knew about them.

Since most MA-PD members are enrolled in plans with high ratings, it’s possible that they focus more on a plan’s specific features such as those affecting chronic care, which affect the “Managing Chronic (Long Term) Conditions” component of a plan’s star rating. So it’s possible that to some degree, the CMS star rating has a corollary—not causal—relationship to a plan’s star rating.

But even if that’s the case, it’s hard to deny that plans with higher CMS ratings get greater visibility to the public, and that certainly impacts the likelihood that people will choose a given plan. And as the healthcare industry becomes increasingly consumer-oriented, people are going to rely on ratings like these even more.

Here’s why CMS star ratings are going to become more important as healthcare becomes more consumer-driven.

Benefits of a high CMS star rating

A high CMS star rating comes with some pretty big benefits. It can give your plan greater visibility, year-round enrollment opportunities, and financial advantages that directly affect your members’ benefits and costs.

In other words, it’ll cost you less to be competitive when your plan has a high rating.

Consumers are more likely to choose your plan

About three quarters of all MA-PD members have a plan with a 4.0 star rating or higher. This is about a 40 percent increase since 2014—more consumers are clearly choosing plans with higher CMS star ratings. And it’s not just that more plans have higher ratings now, either. The average rating of MA-PD plans only increased by 0.2 stars in the same time period.

For plans with a star rating of 3 or less, improving their rating by one star can increase their enrollment by 8-12 percent.

Your plan will be more visible

The increase in people choosing highly rated plans is at least partially due to the fact that the Medicare Plan Finder displays CMS star ratings—and this is the only rating consumers will see on the official government site for Medicare. Additionally, plans with high ratings get a special “High Performing Icon,” while those with low ratings get a “Low Performing Icon.”

On the Medicare site, consumers can also see how the star rating is determined and what it means. So your CMS star rating is:  

  • Highly visible
  • The only rating consumers can conveniently use to compare MA-PD plans
  • Used by an entity consumers can trust
  • Easy to understand, with transparent methodologies

You can enroll new beneficiaries year round

Plans with a five star CMS rating don’t have to wait for open enrollment or a special enrollment period to enroll new beneficiaries. They can enroll new members all year long. This is obviously one of the biggest advantages of a high star rating, because consumers can act on your marketing at any time.

The Medicare Plan Finder prevents consumers from enrolling online in plans that consistently receive low ratings.

CMS star ratings can impact finances

Your CMS star rating is the basis for your Quality Bonus Payment and it directly impacts your MA Rebate percentage. An established health plan with a low CMS rating won’t get a QBP at all, and will get a much lower MA rebate percentage.

This means plans that don’t follow best practices according to CMS will have to reduce benefits and potentially increase member costs, while those that do will have extra revenue to apply toward supplemental benefits or reducing costs for members.

That, plus the increase in enrollment can lead to a significant revenue boost. Improving from a 3 star rating to a 4 star rating, for example, can increase revenue by 13.4–17.6 percent.

So, how do you get your CMS star rating from where it is now to where you want it to be? For many health plans, technology is the answer.

How technology can improve your CMS star rating

You can’t make your members take assessments and screenings or get vaccines and treatments. But you can remind them about the care and services that are most important to them based on demographic data.

You can send automated text messages, app notifications, or emails—whatever they prefer. You can pack your member portal with valuable information about why preventive care is so important, and how detecting diseases early can lead to better outcomes and lower costs.

A robust healthcare orchestration platform makes all of this happen automatically, so all of your members can make wise choices about their care and have convenient access to the services they need.

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