CH B AR THE LEONARD DAVIS INSTITUTE R ES E RI EF of HEALTH ECONOMICS 10 Penn LDI 20 16 . - No Impact of Medicare Advantage Prescription Drug Plan Star Ratings on Enrollment Before and After Implementation of Quality-Related Bonus Payments in 2012 Pengxiang Li and Jalpa A. Doshi PLOS ONE, May 2016 KEY FINDINGS: The five-star quality rating of Medicare Advantage Prescription Drug Plans had no direct impact on LDI RESEARCH BRIEF same-year enrollment. But after the introduction of a bonus payment for highly-rated plans, which had to be invested in additional benefits and /or reducing premiums, subsequent year enrollment in these plans increased. THE QUESTION Does an increase in a plan’s star rating have a direct impact on concurrent year plan enrollment? What’s the indirect To help beneficiaries make more informed enrollment impact (via bonus payments) of star ratings on subsequent decisions about Medicare Advantage Prescription Drug year plan enrollment? Plans (MAPDs), the Centers for Medicare & Medicaid Services (CMS) introduced a five-star rating system in 2007, THE FINDINGS and publishes these quality ratings annually. Initial reports on the influence of star ratings on plan enrollment have been Before the introduction of QBPs, an increase in a plan’s star mixed. In 2012, CMS also began awarding quality bonus rating had little effect on the plan’s enrollment, both in the payments (QBPs) to plans with three or more stars. The concurrent and subsequent year. After the introduction of the QBPs had to be reinvested to improve plan benefits and/or bonus payment in 2012, an increase in a star rating resulted reduce premiums in the subsequent year. in an increase in enrollment, but only in the subsequent year. This was likely due to the reinvestment of QBPs to In PLOS ONE, LDI Senior Fellows Pengxiang Li and Jalpa provide lower premiums and/or additional member benefits Doshi examine the impact of the MAPD star ratings before in the following year. There was still no direct impact on and after 2012, when they became tied to bonus payments. concurrent year enrollment. Hypothesized Direct and Indirect Relationships Between MAPD Contract Star Ratings and Enrollment. Source: PLOS ONE, May 5, 2016; DOI:10.1371/journal.pone.0154357.s002 Research to Improve the Nation’s Health System. DATA DRIVEN. POLICY FOCUSED. ldi.upenn.edu THE IMPLICATIONS were not eligible for the QBPs. The authors compared the effects of star ratings in the pre-QBP period and the post- This is the first longitudinal study to examine the impact QBP period. The analysis controlled for the type of plan, of CMS star ratings on MAPD enrollment, and how QBPs how long it had been part of the program, and the kind of affected that impact. The plans that receive a QBP are required beneficiaries that each plan served. Enrollment data were to improve member benefits or to reduce premiums, which based on January enrollment. other research has suggested is an important determinant of a consumer’s plan selection. This reinvestment of the Li P, Doshi JA. Impact of Medicare Advantage Prescription Drug Plan bonus, and what it likely did to attract consumers, meant a Star Ratings on Enrollment Before and After Implementation of Quality- significant indirect impact of the star rating system. Related Bonus Payments in 2012. DOI:10.1371/journal.pone.0154357. s002. PLOS ONE, May 2016. The authors comment: LDI RESEARCH BRIEF Although star ratings do not seem to be serving LEAD AUTHOR: DR. PENGXIANG (ALEX) LI their intended function in regard to directly aiding plan selection, the associated financial incentives Pengxiang (Alex) Li, PhD is a Senior have increased their utility. It is notable that an Research Investigator in the Division increase in a contract’s star rating led to a significant of General Internal Medicine at the increase in enrollment in the subsequent year. These University of Pennsylvania, Perelman lagged effects may be due to features of the rating School of Medicine. His research areas program’s incentive system. include pharmaceutical health services research and policy, comparative effectiveness research, health insurance plan One limitation of the study was the unavailability of other quality, hospital patient safety and quality, rural health care information that may be relevant to enrollees’ decision- delivery, regulation and hospital competition. making, such as plan reputation, specific benefits, and volume or effectiveness of marketing efforts. THE STUDY Using a longitudinal design, the authors analyzed 3,866 MAPD program contract-years using primarily 2009 to 2015 CMS Part C and Part D Performance Data and Medicare Advantage/Part D Contract and Enrollment Data. The data were divided into a pre-QBP period from 2009-2011 and a post-QBP period from 2012-2015. Stand-alone prescription drug plans served as an external comparison group as they Connect With Us: ldi.upenn.edu Since 1967, the Leonard Davis Institute of Health Economics (LDI) has been the leading university institute dedicated to data-driven, • ldi.upenn.edu/health-policysense policy-focused research that improves our nation’s health and health • @PennLDI care. Originally founded to bridge the gap between scholars in • www.youtube.com/user/LDIvideo business (Wharton) and medicine at the University of Pennsylvania, LDI now connects all of Penn’s schools and the Children’s Colonial Penn Center Hospital of Philadelphia through its more than 200 Senior Fellows. 3641 Locust Walk Philadelphia, PA 19104-6218 LDI Research Briefs are produced by LDI’s policy team. For more P: 215-898-5611 F: 215-898-0229 information please contact Janet Weiner at weinerja@mail.med.upenn.edu.