What is the Medicare Advantage Star Health Equity Index?
As of Star Year 2027, the Health Equity Index (HEI) will take the place of the current Reward Factor in the Star calculation and mean the chance for plans to achieve up to a 0.4 extra bump in Star ratings. It could mean the difference between getting to 4 Star or not.
So what are the main elements tied to the HEI?
- Meeting Enrollment Requirement: First you need to meet a certain threshold of enrollees with dual eligible status, Low Income Subsidy status, or who are disabled. This is the initial definition of Social Risk Factors (SRFs) covered in the HEI. Contracts that meet the contract-level median SRF enrollment can get up to 0.4 more points in Star. Plans below the threshold but above 50% of the median can earn up to 0.2 more points in Star. The first SRFs are a bit old school, but it makes sense to start slow. Over time, the SRFs should take into account additional factors.
- Performance on Measures: More importantly, you have to perform well on a subset of Star measures (the list will grow and change over time as well) for these SRF groups to get some or all of the eligible HEI reward. You will be ranked on each eligible measure in three bands against other plans. Then you get awarded an SRF reward based on an aggregate roll up of your performance on the measures.
- Health Equity Replaces Reward Factor: The Reward Factor goes away after Star Year 2026. That creates great risk for some plans and opportunities for others. Right now, plans are eligible to receive the same 0.4 boost under the Reward Factor for consistently strong performance (if you are a 4.0 Star contract or greater). About 0.3 is being paid out in the aggregate today. Plans that don’t meet the SRF penetration noted above will not be eligible for the new HEI factor. Current estimates suggest that just 0.1 will be paid out in the aggregate in the first years of the HEI. This is because of historically weak achievement in Star for the SRF populations.
Why do we have both the Categorical Adjustment Index (CAI) and the Health Equity Index?
They serve different purposes and the CAI will remain. We know that it is tougher to achieve high quality outcomes in a plan the greater the percentage of socio-impacted populations there are. The CAI was introduced in 2017 to provide an equitable adjustment to Star calculations for those with higher penetrations of dual eligible, LIS, and disability populations. In the case of the HEI, it is an explicit reward for boosting outcomes for these same populations.
With the introduction of the HEI, the Star complexity increases dramatically. You could say the Centers for Medicare and Medicaid Services (CMS) are making tracking twice as complicated. Two years of Star tracking are always in–flight – one being closed and one starting. Plans have a hard time juggling two years now. Now, plans will not only have to juggle two years of Star, but also be tracking the SRF subset calculations for each year.
The HEI is actually applicable now!
While there is usually a two-year lag for most measures from the Star Year to the Measurement Year (e.g., 2026 Star uses a 2024 Measurement year for most measures), the HEI tweaks this formula a bit. Two years’ worth of data will be used. In the case of the 2027 Star year, the measurement years for the purposes of calculations are 2024 and 2025.
Plans need to begin the process of understanding where they stand. Will they be eligible for all of the HEI opportunity, half of it, or none of it? How much of the opportunity can they achieve based on performance?
In Part 2, we will dive deep into why Medicare Advantage Health Equity Index matters to your plan.
Lilac Software is developing cloud-hosted, data aggregation solutions for health plans’ most complex problems. Our Star Performance Management Platform gives unprecedented insight into all aspects of the Medicare Advantage Star program, including forecasting of aggregate scores and revenue, individual measure performance, as well as best practice remediations for all measures. Lilac will seamlessly show how plans are doing on each contract from an all-population perspective as well as for social risk factor (SRF) cohorts.
If you are looking for a solution to the Star complexity and best practices, reach out here to start a conversation with the Lilac team
