The Relationship Between Medicare Advantage Star Ratings and Enrollee Experience

Medicare Advantage plans, private managed care plans that enrolled 34% of Medicare beneficiaries in 2019, received $6 billion in annual bonus payments on the basis of their performance on a 5-star rating system. Little is known, however, as to the extent these ratings adequately capture enrollee experience.

To measure the effect of exposure to higher rated Medicare Advantage contracts on enrollee experience.

An instrumental variables analysis using MA contract consolidation as an exogenous shock to the quality of plan enrollees are exposed to.

A total of 345,897 MA enrollees enrolled in non-consolidated contracts and 21,405 enrollees who were consolidated.

The primary exposure was enrollee star rating, instrumented using contract consolidation. The primary outcomes were enrollee self-reported experience measures.

There were no significant effects on increased star ratings on 23 of 27 outcomes. A one-star increase in contract star rating leads to a 5.4 percentage point increase in reporting that pain does not interfere with daily activities (95%CI 2.4, 8.4), and a 4.4 percentage reduction in the likelihood that a physician would talk to the enrollee about physical activity (95%CI: -7.8, -1.1, all p<0.05). A one-star increase in contract star rating led to an 8.4 percentage point reduction in achieving the top score on the received needed information index (95%CI: -16.4, -0.4), and a 1.8 percentage point reduction in responding with the lowest score for the overall rating of care (95%CI: -3.5, -0.1).

Exposure to a higher rated MA contract did not appreciably increase enrollee experience. Policymakers should consider reassessing how these ratings and associated bonus payments are currently calculated.