Geographic location is an important predictor of the quality grades assigned to Medicare Advantage insurance plans. Therefore, Boston University School of Public Health researchers suggested in a new study that the federal government should consider accounting for geographic differences to allow for fairer comparisons among plans.
The study in PLOS ONE found that lower 'star ratings' were assigned to plans in the Southeastern region of the U.S., and that many states' ratings would rise or fall if these governmental measures adjusted for geographic differences nationally.
The rating system was instituted by the federal Centers for Medicare and Medicaid Services (CMS) as a way to make sure Medicare beneficiaries in different plans were getting high-quality care. CMS has tied financial incentives to the ratings; plans that earn at least four (out of five) stars receive a boost in reimbursement, have the option to expand as a business, and are eligible for bonuses. Indicators used in the ratings include health outcomes, access to care, patient ratings of satisfaction and other measures of quality - but not location of the plan.
Kazis and colleagues analyzed 409 Medicare Advantage contracts nationally, covering about 10.6 million beneficiaries, or about 86% of the total Medicare Advantage population. They found that geography alone explained 59.5% of the variation in the plan's ratings, while demographic differences (age, race, education, poverty level and median household income) explained 31.2% of the variation.
When the rating system was adjusted for geography, 20% of states rose in the rankings, while 24% fell. For example, Michigan, which was ranked 26th in the country, rose to the fourth highest rank. The opposite occurred with Hawaii, which fell from fourth to 26th place after the adjustment.
Kazis said, "The Affordable Care Act focuses on changing the system to increase access to health services, improve quality of care and decrease costs. Our results suggest a rationale for a geographical focus that reflects factors that are largely local, rooted in the environmental, social, economic and behavioral determinants of health."