Health Plans Face Termination
In addition to the new four-star threshold for bonus payments, CMS's final 2015 MA rules are expected to reaffirm the agency's determination to oust health plans from the program if they score at the two-star level for three consecutive years.
"From CMS's view, you're talking about low performers," Kavouras says, noting Aetna does not have any MA health plans with less than 3-star ratings. "It should be rare. It's probably the right thing to do… so beneficiaries have high-quality plans."
For 2014, only 1.1 percent of MA health plans posted a two-star or 2.5-star rating, according to a Barclays analysis.
While Aetna does not have any low-performing MA health plans, it does have "some 3.5 star plans" that will pose a risk for the company when the new four-star bonus payment threshold starts in 2015, Kavouras says, noting that market forces are at play in some areas of the country that make it hard for MA insurers to reach the star-star mark.
"We think CMS should look closely at that," he said. "In one market, Aetna is the top performer in the state but only has 3.5 stars."
While acknowledging that setting a star threshold for bonus payments is "a challenge for CMS," Kavouras says the quality measurement difference between an Aetna MA health plan earning a 3.5-star rating versus a four-star rating has been as little as 0.003 of a point. "You're talking about minute differences," he says.