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Sachin H. Jain: Transient Improvements in Star Ratings Waste Taxpayers Money

Sachin H. Jain/kelloggbhc.com

Oct 23, 2024, 11:34

Sachin H. Jain: Transient Improvements in Star Ratings Waste Taxpayers Money

Sachin H. Jain, President and CEO of SCAN Group and Health Plan, shared a post on LinkedIn:

“With massive variation in star ratings, health plans often resort to unsavory, non-transparent tactics to bolster their ratings.

Here are a few:

Novation: plans will merge a low performing contract in one geography with a higher performing contract in another geography, blending the performance of a low-performing cohort of people with a higher performing cohort in another / overlapping geography. Star ratings may look higher to the public but there has been no fundamental improvement in performance.

Contract area expansion: a health plan will take a high-performing plan in one geography and file an expansion into a new geography (including one in which they already have a lower rated plan). This also reflects no fundamental improvement in performance—and deceives the public into thinking that a plan is better than it is.

These tactics are clever.

And can lead to transient “improvements” in star ratings that are hard to maintain.

But they also waste the taxpayer’s money because it is rewarding a plan for no *real* improvement in performance.

*Shareholders and equity research analysts of these plans (and potential acquirers) should also catch on to the fact that these tactics—which drive transient earnings bumps—don’t really reflect fundamental improvements*

*And brokers should be aware of these shenanigans when lower rates plans suddenly show up in a market with markedly higher star ratings than they earned in previous years*

*Even most employees of these companies don’t understand these tactics and how they are used to “enhance” ratings*

*******

Novation and overlapping area expansions are dirty secrets of how health plans (not named SCAN) manipulate Star ratings without any underlying improvement.

Health plans that engage these loopholes don’t serve the public well and the Centers for Medicare & Medicaid Services guided by the Medicare Payment Advisory Commission should work to close them in the best interest of American seniors.”

Sachin H. Jain is the President and CEO of SCAN Group and Health Plan and an Adjunct Professor of Medicine at Stanford University School of Medicine. He also serves as a Board Member at The Paul & Daisy Soros Fellowships for New Americans, an Academic Hospitalist (WOC) at the U.S. Department of Veterans Affairs, and a Board Member at America’s Health Insurance Plans (AHIP). He is also a board member of Omada Health.