Medicare Advantage Plans Weigh Pros, Cons of Chasing Health Equity Reward

As part of CMS and the Biden administration’s overall framework for health equity, Medicare Advantage organizations’ ability to assess social risk factors (SRFs) and address care disparities has taken on new importance this year, thanks to the introduction of the Health Equity Index (HEI) to the Star Ratings. Starting in 2027, insurers won’t be penalized for failing to close gaps in care on certain quality measures, but qualifying Parts C and D sponsors will be rewarded if they perform well on the HEI, which CMS has described as a “methodological enhancement” to a subset of existing measures. Quality experts say readiness varies across the industry, and plans need to better understand where to target interventions and where they stack up against other plans that may qualify for the HEI.

And not all plans will qualify: Contracts that enroll a minimum threshold percentage of enrollees with social risk factors (SRFs) will be assessed and divided into three tiers of performance. Plans that perform in the top tier will receive 1 point, the middle tier will receive 0 points, and the bottom tier is assigned -1 point for each measure. After a series of calculations, the points translate to an HEI score that ultimately determines whether plans receive a reward that is applied to quality bonus payments for the 2027 Star Ratings.