Mark Lutes Quoted on Medicare’s Star Rating System

Managed Healthcare Executive

Mark Lutes, a Member of the Firm in the Health Care and Life Sciences practice, in the Washington, DC, office, was quoted in an article titled "Pathway to More Medicare Stars: Medicare's Star Rating System Is Still a Work in Progress."

Following is an excerpt:

Health plans breathed a sigh of relief when the Department of Health and Human Services (HHS) decided to delay part of its Medicare Advantage (MA) payment strategy. Bonus payments will be based on quality scores—a five-star standard—but now the rules are slightly more relaxed to allow time for phasing in.

A $6.7 billion infusion of federal funds will be up for grabs as MA plans aim for five-star quality ratings, which insurers and consultants generally agree are useful but need to be tweaked. Originally, only plans that received four stars or more in the 2011 assessment would receive bonus payments. However, MA plans rated as "average"—those with three or three-and-a-half stars—will receive bonuses now, albeit at lower levels.

The industry is poised like never before to tackle these issues, according to Mark Lutes, a healthcare regulatory lawyer for Epstein Becker Green.

"Reform is more feasible today than in the '90s when we last took a run at it," Lutes says. "Well over 50% of physicians work for healthcare systems, and their salary formula can include bonus methodology that includes quality and efficiency standards."

Regardless of the ultimate fate of healthcare reform, MA plans are here to stay, says Lutes.

"Most of the challenges are leveled at the individual mandate and access portions [of the reform law]," Lutes says. "Medicare Advantage plans are favored entities. There is no public policy cry to defund the Medicare Advantage program. The next question is how effectively the program is run and having payments reflect quality differences."

Public policy skeptics claim that the move by CMS to delay payment changes for MA plans shows a weakening of the government's resolve to transform healthcare. Lutes believes that money is a powerful motivator to drive quality, however.

"You have to heavy up the incentives to capture attention," Lutes says. "Any time you try and change priorities, if you put more money to it, you can change behaviors pretty quickly."