Relationships Between Medicare Advantage Contract Characteristics and Quality-of-Care Ratings

Editors' Notes Context The Centers for Medicare & Medicaid Services measures the quality of care provided by the private, managed care plans in its Medicare Advantage program. Contribution Larger, older, and nonprofit plans received higher scores in 2010 than other plans. For example, on a scale of 1 to 5 stars, with 5 stars being the best score, nonprofit plans scored 0.55 stars higher than for-profit plans. Caution This observational study measured associations but could not establish causality. Implication Smaller, newer, and for-profit plans should receive more attention about quality-of-care issues. The establishment of Medicare Part C in 1997 continued the development of paths for Medicare beneficiaries to be able to choose to receive their health services via private, managed care plans instead of through Medicare traditional fee-for-service programs. After the passage of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Medicare Part D), Medicare Part C was renamed Medicare Advantage (MA) and became more attractive to beneficiaries because of the addition of prescription drug coverage (1, 2). Since 2008, the Centers for Medicare & Medicaid Services (CMS) implemented Medicare plan star rating (3), which computes an overall plan rating that summarizes plan quality based on 36 indicators related to processes of care, health outcomes, access to care, and beneficiary satisfaction (4). Such scores give each plan a rating of 1 to 5 stars based on its performance (1 star indicates poor performance, 2 stars indicates below average, 3 stars indicates average, 4 stars indicates above average, and 5 stars indicates excellent performance). Star ratings are assigned at the contract level rather than the individual plan level (a contract can cover 1 or several plans), and every plan covered under the same contract receives the same rating. Beginning in 2012, under the Patient Protection and Affordable Care Act, reimbursement and bonus payments are tied to the quality performance of these health plans. Many factors, such as the profit status, size, and maturity of the plans, have been recognized previously as being related to quality of care. Recent trends have pointed to a tendency for nonprofit health plans to convert to for-profit status. For example, Blue Cross and Blue Shield health plans, which were historically operated as local, nonprofit organizations, increasingly have been converting to for-profit plans since the mid-1990s (5). Many studies suggest that for-profit Medicare health plans may provide lower quality of care (68). In terms of plan size, there is a common assumption in economic theory that larger units with high production volumes offer advantages by increasing quality while decreasing cost. Such an assumption is controversial in health care. On the one hand, previous studies showed an inverse association between patient volume and mortality rates (9). On the other hand, larger organizations tend to be teaching facilities as well, which previous studies have associated with better clinical quality measurements (10). Also, older organizations tend to have more experience and perform more procedures (high volume). Such characteristics have been associated with better outcomes, with particular emphasis in studies on surgical procedures (11, 12). As a consequence, the structural variations among health plans may drive behavioral differences, including selection of providers that contract with the plan, priorities of the plan leadership, and use of effective quality management techniques (such as promotion of preventive care and use of electronic medical records). We hypothesize that profit status, maturity, and size of the contracts will predict quality of care, as measured by the MA star ratings. This article investigates the association between 3 characteristics of MA contracts (profit status, maturity, and size) and quality of care, measured by the MA star ratings. Methods Data We used 3 data sources in this study. First, we used the MA quality database in 2010, which reports star ratings at the MA contract level. A MA contract covers health services only (without medications). The star rating covers 36 different topics in 5 categories: staying healthy, managing chronic (long-term) conditions, member experience, member symptoms, and customer service. If the contract provides medication benefits only, the star rating covers 15 topics and 4 categories: customer service, member symptoms, member experience, and patient safety. If the contract provides health and medication services together, then the star rating covers all of the topics listed above. We used 2010 CMS data because they were more thorough information in terms of the number of contracts with star ratings than the most recent data available at the time (2011 data). Second, we used the 2010 Plan Information by County database, which contained MA contract characteristics, such as profit status, contract types, contract age, and operating area. Third, we used the MA 2010 enrollment databases, which revealed MA enrollment status as of 1 October 2010. We applied a multivariable linear model to assess the relationship between profit status and star ratings, controlling for contract type, contract maturity, operating area, and contract size (measured by the amount of enrollees). Profit status was defined as either for-profit or nonprofit. Contract maturity was identified from contract establishment date until January 2011. We used categorical versions of contract data about both maturity and size because both variables are not normally distributed (skewed) and the interpretation of the results is clearer. In terms of insurance benefits, we saw 5 types of MA contracts: HMO or HMO with a point-of-service option (HMO-POS), private fee-for-service (PFFS), local preferred provider organization (PPO), regional PPO, and Medicare Cost plans. Inclusion and Exclusion Criteria We included only the contracts offering health services (Part C or Part C plus Part D) and excluded the contracts related to medication only (Part D) in our computations. This approach allowed us to make the scores comparable within contracts. As a result, 409 (71%) of 575 MA contracts were included in our final study sample. Institutional review board approval was obtained through Boston University Medical Center, Boston, Massachusetts. Statistical Analysis We implemented our data analyses with focus on the for-profit versus nonprofit status of MA contracts and differences in their star ratings in a series of steps. First, the CMS star ratings were measured using a multicomponent index scale that could take on values from 1 to 5 in increments of 0.5. Because the underlying variables that make up this index are continuous by nature, we analyzed the star ratings as a continuous variable. In univariate analyses, we examined the data set of 409 contracts with respect to continuous contract characteristic variables, such as star ratings, contract maturity, and contract size using measures of central tendency (mean and median), dispersion (SD and interquartile range), and 25th and 75th percentiles. Contract maturity and enrollment were categorized for later analyses based on these observed distributions. We examined nominal-scale, categorical variables, such as profit status, contract type, and contract operating area, in terms of counts and proportions. In bivariate analyses at the contract level, we constructed cross-tabulations of categorical contract characteristics with chi-square tests of significance. We next analyzed the data by using a multivariable linear regression approach at the contract level. We then conducted additional sensitivity analyses for the comparison of mean star ratings between for-profit and nonprofit contracts to assess the robustness of our findings. We used techniques to calculate robust regression estimates in these additional analyses to examine the validity of our linear regression results that assumed normality for the star ratings (13). The results from this additional analysis confirmed the results of the multivariable linear regression analyses (Appendix Table). Appendix Table. Robust Multivariable Linear Regression Analysis of Star Ratings on Characteristics of the Included Contracts To examine effect modification (interaction) among contract characteristics and tax status with star ratings, we added terms one at a time to our linear models, including all covariates in the contract-level data sets (such as the interaction of tax status with contract type controlling for all other contract characteristic variables). We considered P values less than 0.05 to be statistically significant in all analyses. We implemented all analyses using SAS, version 9.3 (SAS Institute). Role of the Funding Source This study was done without external funding sources. Results The mean star rating for all contracts was 3.32 (SD, 0.65). The mean contract maturity was 9.11 years (median, 5.47 years [interquartile range, 4.96 to 13.72 years]) (Table 1). Table 2 reports the counts and percentages of contract characteristics by profit status. In our analysis of 409 MA contracts, there were 10.56 million beneficiaries, representing 90% of the total MA population in 2010. A total of 271 (66.3%) MA contracts were HMOs or HMO-POSs; 97 (23.7%) contracts were local PPOs; and the remainder were PFFSs, Medicare Cost plans, and regional PPOs. As for the operating area, 274 contracts (67.0%) operated within a single state, 80 (19.6%) had presence in at least 1 county for all 50 states and the District of Columbia, and 55 contracts covered several states (13.4%). Table 1. Statistical Characteristics of the Included Medicare Advantage Contracts Table 2. Characteristics of Medicare Advantage Contracts The Figure shows the star ratings within for-profit and nonprofit health contracts. Overall, 17.4% (71 of 409) of health contracts provided below-average care. No cont