NEW: Foundation brief looks at implications of 2011 quality ratings for Medicare Advantage plans.

The Centers for Medicare and Medicaid Services (CMS) rates the relative quality of the private plans that are offered to Medicare beneficiaries through the Medicare Advantage program as a way of aiding beneficiaries who are considering enrolling in such a private plan.  CMS rates Medicare Advantage plans on a one to five-star scale, with five stars representing the highest quality.  

This analysis by Kaiser Family Foundation researchers finds that quality ratings vary by plan characteristics.  For example:

• Private Fee-For-Service plans and regional Preferred Provider Organizations (PPOs) have below average ratings — significantly lower than HMOs and local PPOs.  
• Non-profit plans have significantly higher average ratings than for-profit plans.  
• More experienced plans (with contracts beginning before 2004) have higher ratings than newer ones.
• Average quality ratings also vary widely among the largest organizations offering Medicare Advantage plans.

Overall, nearly one in four Medicare Advantage enrollees is in plans with four or more stars.  However, the share of enrollees in highly rated plans varies greatly by state — from less than 2 percent in 25 states and Washington D.C. to more than half in Massachusetts, Oregon and Hawaii.  

The analysis is based on the ratings posted by CMS on the Medicare Compare Web site, with additional information from the CMS Plan Directory and enrollment files.  The analysis examines the summary scores for the plans, which are an overall measure of the quality of care, access to care, responsiveness, and beneficiary satisfaction provided by the plans.  It does not attempt to assess the validity of the quality ratings.

The Foundation also has issued a new analysis examining changes in the 2010 health reform law that will reward bonuses to private Medicare Advantage plans based on quality rating. The analysis is available online.

Issue Brief (.pdf)