Pharmacy Benefits 101

Pharmacy Benefits 101: Medicare Star Ratings

May 30, 2023

Justin Venneri

Medicare Star Ratings are crucially important to health plans offering Medicare prescription drug and Medicare Advantage coverage to America’s seniors. With the 65-and-older population increasing rapidly1 as baby boomers age and over half of Medicare enrollees selecting Medicare Advantage plans2, we believe it’s worth spending some time discussing the top pharmacy benefit-related aspects of Star Ratings.  

I asked Capital Rx’s Senior Director of Clinical Government Services, Jay Tran, PharmD, to share his thoughts on this topic. The following summary of our discussion covers the basics of Star Ratings, what drives them, as well as what Capital Rx and JUDI® are doing to help health plans achieve optimized and predictable outcomes.

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What’s the Purpose of Star Ratings?

star ratings scale - 1-5 stars, 5 excellent, 1 poor

Star Ratings provide a simplistic view for Medicare beneficiaries to compare Medicare Advantage and Part D plans when shopping during Open Enrollment. A health plan’s rating reflects its success in delivering quality care and solid performance on a 1- to 5-Star scale, with 5 Stars being the best, and a higher Star Rating allows a plan to be displayed at a higher priority on the Medicare Plan Finder when members are shopping for plans.

Additionally, health plans with higher Star Ratings may receive rewards from the CMS in the form of annual bonus payments. Since bonus payments must be reinvested in benefits for members, there’s every incentive for health plans to excel in delivering better care and a better experience to beneficiaries.  

What pharmacy-related factors influence a health plan’s Star Rating?

Infographic - the 4 part D domains (customer service, member complaints/changes in plan performance, member experience, drug safety and accuracy of pricing).

Star Ratings are based on a weighting of points associated with several groups or “domains,” as the CMS refers to them. There are Part C domains pertaining to medical benefits, and Part D domains are for pharmacy benefits. The 2023 Medicare Advantage and Part D Star Ratings fact sheet contains the relevant details, and CMS provides several other resources for those interested in the technical aspects, changes year-on-year, and updates related to how the various components are scored.  

Modern technology and a true partner can help drive Star Ratings higher.

With Capital Rx and JUDI, our proprietary enterprise pharmacy platform that processes commercial, Medicare, and Medicaid claims, plan sponsors and stakeholders responsible for pharmacy benefit programs at health plans have a credible, trusted partner with modern technology providing the solutions they need. When we look at the specifics within each domain, we clearly see how combining JUDI and a proven ability to delight clients and members over the years leads to optimized and predictable outcomes.

And if members are happy and feel cared for, they aren’t filing complaints that could negatively impact a health plan’s Star Rating.

Medication Adherence for diabetes, hypertension, and cholesterol is heavily weighted in the Star Rating. When the right clinical programs are in place, and plan sponsors have and understand their data, including the tools and support to analyze the data, they can be proactive in managing beneficiaries with chronic conditions.

JUDI allows a multitude of systems to interact with one another seamlessly. The adjudication of a claim can trigger an action in real time. For example, the member’s calculated adherence to a drug or if they are late to refill is known at the same time when JUDI® adjudicates the claim. Set thresholds can then trigger direct communication (e.g., mail, text, app messaging, telephone, or fax) to members or prescribers or to internal communication to health plans as opportunities automatically. These are examples of time-sensitive information, and the “responded actions” are critical for Star Ratings. Higher adherence rates are necessary for therapeutic efficacy, and there’s plenty of evidence showing that poor medication adherence contributes to negative outcomes for patients3 (and higher costs). The greater the adherence rate, the more positive the impact on the Star Rating.

Medication Therapy Management (MTM): Providing medication reviews and targeted interventions can contribute to lower rates of drug-related adverse events and medication errors. Capital Rx offers a full end-to-end solution for MTM for health plans, which includes the program submission to CMS and a comprehensive medication review process. Traditional methods of mailing and telephonic outreaches are used, but in addition, a retail pharmacy network solution also exists. If health plans offer more comprehensive MTM services and their members safely take their medication, they earn higher Star Ratings.  

Drug Pricing & Access: Health plans that provide beneficiaries with affordable access to medications typically have higher Star Ratings. Having great customer service helps ensure that members feel like they can get the medication they need, when they need it, and at an affordable price.  

To summarize...

Overall, health plans that can offer their Medicare beneficiaries a better experience earn higher Star Ratings from the CMS. Prescription drug costs contribute to overall health plan costs. It goes without saying that if the pharmacy cost is controlled or in a negative trend, it can be a huge help to plan sponsors. Having the right partner and infrastructure solution to provide a better prescription drug plan with higher adherence rates, fewer safety issues, and greater flexibility to focus on member service will lead to improved outcomes, lower costs, and possibly larger bonus payments.

Contact us if you’d like to learn more about Capital Rx and what JUDI can do for your health plan and its beneficiaries.

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1 65 and Older Population Grows Rapidly as Baby Boomers Age (Census Bureau; June 25, 2020

2 Half of All Eligible Medicare Beneficiaries Are Now Enrolled in Private Medicare Advantage Plans (KFF; May 01, 2023)

3 Kim YY, Lee JS, Kang HJ, Park SM. Effect of medication adherence on long-term all-cause-mortality and hospitalization for cardiovascular disease in 65,067 newly diagnosed type 2 diabetes patients. Sci Rep. 2018 Aug 15;8(1):12190. doi: 10.1038/s41598-018-30740-y. PMID: 30111867; PMCID: PMC6093904.

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