The Impact of Medicaid Quality Rating Systems on Consumer, Health Plan and Provider Behavior

Thursday, November 17, 2016
Summary and Key Findings: 

As a result of increased emphasis on quality health care, spurred in part through the Affordable Care Act, quality measurement and reporting are undergoing a major shift. Data collected through quality ratings systems are no longer solely being used to create benchmarks and monitor performance of plans and providers. Instead, quality rating systems are increasingly being used to collect, analyze and share ratings in order to influence the behavior of consumers, health plans and providers. 

A white paper from the Anthem Public Policy Institute, The Impact of Medicaid Quality Rating Systems on Consumer, Health Plan and Provider Behavior,” examines state-developed quality rating systems that help consumers compare quality among Medicaid managed care plans and discusses the extent to which these systems influence key stakeholders .

What role do quality rating systems play in Medicaid managed care today? 

States have taken on various efforts to measure, promote and improve quality in their Medicaid managed care programs, including a number of states that have developed and are using quality rating systems. (New federal regulations finalized in April 2016 will require all states to implement a quality rating system in the next three years.) These ratings are available to beneficiaries, often as part of a consumer guide, to aid in their selection of their health plan. States often use stars to indicate degrees of performance relative to state or national averages.

How can Medicaid quality rating systems influence behavior?

While there is little evidence on the impact of Medicaid rating systems to date, the experience of quality rating systems used for other populations, along with the growth of quality improvement incentives, suggest that as Medicaid quality rating systems continue to evolve, so too could their impact on behavior and quality of care.

  • For consumers, quality rating systems have the potential to empower Medicaid beneficiaries to choose the best health plan for them. In order to do so, these rating systems must present quality information in a way that is both clear and useful to consumers—otherwise the consumer will not be motivated to include those ratings in their consideration.
  • For health plans and providers, quality rating systems can influence both behavior changes and quality improvement strategies if ratings are linked to accreditation by national quality organizations, value-based incentive payments, or future procurement decisions. Quality ratings can also lead to more innovative partnerships and collaboration between health plans and providers, as they seek to better serve consumers and shift to more value-based payment arrangements.

What are potential barriers to the effectiveness of Medicaid quality ratings systems?

The evolution of Medicaid quality rating systems is not without challenges. Some key barriers that can reduce the impact of Medicaid quality rating systems include:

  • There is a shortage of evidence about how consumers actually use rating systems. There has been no significant research done on how much quality rating systems in Medicaid factor into beneficiary plan research or if they are really used at all.
  • Determining the appropriate type and amount of information to share with consumers and how to present that information is critical. Health care jargon can be intimidating and alienating, while oversimplification of ratings can damage their efficacy. For example, using ratings of “below average, average, and above average” is not particularly useful to the consumer, without a deeper explanation of what those levels entail. The need for understandable information highlights the complex balance between transparency of measures and methodology and “information overload” for consumers.
  • Even when armed with understandable and actionable quality information, consumers may not prioritize health plan quality relative to other competing factors. Factors such as the size of the provider network, the ability to continue seeing a current provider, the availability of medications on the prescription drug formulary, and name recognition are powerful drivers of health plan selection behavior.
  • Many Medicaid beneficiaries forgo the opportunity to make a voluntary plan selection. When beneficiaries do not make a plan selection, they are instead auto-assigned to a health plan by the state Medicaid agency.  In some states, auto-assignment constitutes the majority of Medicaid health plan enrollments. Consequently, ratings are not used by these individuals.

Quality rating systems are tools that can be used to empower consumers and drive quality improvement. As Medicaid managed care quality rating systems grow, it is important to assess on an ongoing basis whether and to what extent these systems are able to effectively drive changes in consumer, health plan and provider behavior.

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