RISE Radio
Join the RISE team as we chat with industry leaders and explore ever-changing policies, regulations, and challenges faced by health care professionals responsible for quality and revenue, Medicare member acquisition and experience, and/or social determinants of health. Produced by RISE, the number one source for information on all things Medicare Advantage.
RISE Radio
Episode 20: Navigating the 2025 Medicare Advantage Final Rule: Expert Analysis and Strategic Insights
Welcome to the latest episode of RISE Radio, our podcast series that focuses on issues that impact policies, regulations, and challenges faced by health care professionals responsible for quality and revenue, Medicare member acquisition and experience, and/or social determinants of health.
Our guests are Ana Handshuh, principal of CAT5 Strategies, Melissa Smith, founder and senior advisor of the Newton Smith Group, and Rex Wallace, founder & principal of Rex Wallace Consulting.
During this 70-minute podcast, they discuss the major changes in the 2025 Medicare Advantage Final Rule that the Centers for Medicare & Medicaid Services released on April 4. The conversation delves into the Medicare Advantage marketing changes, including supplemental benefits and compensation to MA brokers and agents; dual eligible special needs plans (D-SNPs); network adequacy standards; Star rating measures; and strategies for compliance.
For more on these changes, check out RISE’s upcoming spring conferences:
Special Needs Plan Leadership Summit, May 1-3 in New York City
Risk Adjustment Forum, May 20-22 in New Orleans
Qualipalooza 2024, June 2-4 in Atlanta
Hello and welcome to the latest episode of RISE Radio. I'm your host, Ilene MacDonald, the editorial director of RISE, and today we'll be discussing the 2025 Medicare Advantage Final Rule that CMS released on April 4th. Joining me today to guide us through the major changes are Ana Handshuh, principal of CAT5 Strategies, Melissa Smith, founder and senior advisor of the Newton Smith Group, and Rex Wallace, founder and Principal of Rex Wallace Consulting. All three will be speakers at Qualipalooza 2024, RISE's Quality Leadership Summit, which is taking place June 2nd to 4th in Atlanta, and Anna and Melissa were also recently named RISE Fellows and will be helping to shape our new RISE Bedrock of Health Care Virtual Training Series. Thank you all for joining me today. That final rule was massive, over 1,300 pages, and although I wrote an overview story, it highlighted some of the major changes and I wondered if I can ask each of you sort of your initial impressions of the final rule. Melissa, do you want to start?
Melissa Smith:Sure. So my initial impressions on,e obviously it was a lot. 1,327 pages is no small task and it is no small tweaks to our Medicare Advantage financial structures as a result of the Inflation Reduction Act implementation. My take on this 1,300 pages, now that we've had almost two weeks to digest it, is that this is essentially Medicare Advantage redesign and Stars redesign. Now, CMS did not use those words the way they did for the Part D redesign. The term Part D redesign is a proper noun from CMS. I've kind of just coined that vibe on how I'm shaping these 1,300 pages because I do think it's a complete upheaval of the real world, without ripping and replacing the chassis underneath our organizations. It's not going to require us to rip and replace claims or processes or enrollment or eligibility. It's just a redesign of the program around it. But I'm anxious to hear what Rex and Ana think. This is definitely a time to find friends and lots of perspectives. No one right answer here.
Ana Handshuh:I'll jump in Ilene, and yeah, I think Melissa is exactly right.
Ana Handshuh:So I'll start by saying, yes, it was a lot, but I wish it would have been more, because they left a lot of provisions, not just from this latest proposed rule, but from the previous proposed and final rules, left unsaid, specifically around Star ratings, there were some provisions that we were expecting to hear about specifically around hold harmless provision and in some other areas that they still left unaddressed.
Ana Handshuh:And so to me that was an important message that was sent. I think they realized we're putting a lot here and you know, perhaps addressing those other provisions would have created additional, you know, additional, I don't want to say instability, but just additional change for plans to get used to. So I think they did pick the provisions that, to them, were most important. And when you think about, if you were to say what's the theme of what they picked, for me I noticed a theme around protection of beneficiaries, specifically the most vulnerable beneficiaries, and adding choice, closing loopholes. Those are the types of things that I noticed are improving the experience overall for beneficiaries and making sure that the dollars in the program are used wisely so that we maintain the overall health and sustainability of the program in the long term.
Rex Wallace:Yeah, I mean you guys, spot on, I mean both of you. I would just, I guess, add that you know I too was happy that they clarified some of the things from the December 22 proposed rule. Finally, the Part D measures, especially that were hanging out there, left some really important elements still undecided on. So there's still a lot of unknown. That, could you know, and it's the biggest change out there that's still looming right, that we don't know if it's going to happen or not. That we'll get deep into, I'm sure, in this call, you know, I felt like it was a mix of changes that are addressing, beneficiary complaints and then things that are designed purely to relieve the financial pressures that CMS is feeling with the Medicare Trust Fund. And then some methodology changes and some examples are of those themes are the focus on the Universal Foundation measures and the adoption of those, which, which will be good in the end, right as far as creating some consistency across CMS programs, consistency with providers across quality programs.
Rex Wallace:That's, I think everyone will benefit from those in the end, even though there's some hard measures coming to Medicare because of that, obviously. And then, like the transformation of the health outcome survey, that's that's going to tackle more behavioral issues and those PROM patient reported outcome measures are becoming more and more and more important, like we thought they they would and they finally are. And then I think yeah Melissa touched on it with her first few sentences, the CMS is coming at us with transforming Part D quality. Right, they're going to rock the boat. They are rocking the boat with Part D quality and that's a huge, huge topic and I'm really just touching on the Stars changes, not to mention all the other things we'll get into with broker compensation and fun stuff like that, right. So lots of change and glad they got some clarification from some old things hanging out there. But yeah, much, much more to come.
Ilene MacDonald:Thank you and I think we're going to start diving a little deeper into some of those specific changes. I know let's maybe talk marketing and CMS has made several changes in the last couple of final rules to crack down on misleading marketing practices and monitoring agent and broker activities, and this year it looks like they focused on compensation for MA brokers and agents and restrictions to third-party marketing organizations. Ana, can you talk about what all these changes mean for MA organizations?
Ana Handshuh:So I want to talk first since we are on marketing, before we address compensation, which was a major topic of discussion, not only in the preamble to the proposed rule but they addressed, I thought, pretty well, in the preamble to the final rule, in their commentary and in their comment section. I thought they did a good job of talking about the rationale. But before we talk about that, I wanted to talk about how they updated the marketing practices for the special supplemental benefits for the chronically ill, or SSBCI, which I think it's going to have a big impact on how plans think about their benefits. We're in the middle of bid season right now. Bids are due in early June and plans right now are putting their benefit lineups together and I think this was a timely change that they put together and they're going to need to factor in this change as they were thinking about their benefit lineup. So what did CMS do? They finalized what they said they would do in the proposed rule, which would expand the existing requirements to update the marketing practices to clearly list the chronic conditions that the enrollee has to have to be eligible for those SSBCI benefits and then any additional eligibility requirements to access the benefits. So if, for example, you have to have diabetes and transportation insecurity then they want to make sure that you clearly list that. The reason for that is because CMS perceived that many plans were using these benefits as a marketing tactic, without an intention of wide adoption or adoption by the targeted beneficiaries, and that beneficiaries would sign up thinking that they would be eligible for a benefit but in fact not be eligible to receive that benefit, and so it was almost like a little bit of a bait and switch that CMS was concerned about. So they created new disclaimer requirements to make sure that the benefits aren't confusing for beneficiaries, to make sure that the enrollment materials aren't confusing, and so plans are now going to have to list the chronic conditions. I think CMS has up to five of the chronic conditions have to be listed and then they'll have to be required to match the written formatting and spoken pace to share plan contact information in the disclaimer. So if you have a TV ad or a radio ad, you know how the car ads at the end say the disclaimers really fast? So CMS is saying no, you have to, if it's a written format, it has to be in the same as your contact information, and if it's in a radio ad or a TV ad, that spoken pace needs to be the same. So those were some of the things that they talked about in the commentary that I thought was very good.
Ana Handshuh:The other thing on the marketing side related to supplemental benefits would be that you have to send out a mid-year notice. So if beneficiaries have not used and, by the way, they say all supplemental benefits, so if the beneficiaries haven't used those benefits mid-year, you have to notify them in a personalized note that, hey, you haven't used your benefits, it's available to you, and they just want to make sure that there's equitable access to the benefits. So plans have to think about from a benefit offering perspective, are they able to track utilization of those benefits and be able to say, ok, these are the people that have not utilized yet during the year, and then they'll have to list those benefits, including how to access those benefits. So CMS is saying, hey, we want members to be able to access these benefits readily. So I think you started out by asking me how do we talk about agent broker compensation?
Ana Handshuh:What changes were made? And I would say that CMS really rocked the boat here. But this was expected, because this is what they proposed, they did finalize it with a small modification. So they made changes to the contract and compensation requirements for agents and brokers and third party marketing organizations, otherwise known as the TPMOs. Basically they closed the loophole. They felt that these payment strategies or these payment methodologies were circumventing the compensation caps that CMS has long held in place. So they were very adamant that they wanted to close that loophole to ensure that the existing compensation caps were observed.
Ana Handshuh:So what did CMS do? So first, they were super clear what their objective was, which was they didn't want any contract terms that would interfere with the agent what I call the kitchen table agent, the agent's responsibility to make an objective assessment of what plan is best for that beneficiary. So that was the first thing that they set out. The tone of their intention was that don't put anything in the contract that is going to interfere with that. The second thing they did is they said, okay, we recognize that there are administrative costs to agents and agencies and brokers and other TPMOs that they incur as part of doing business with the health plan. So some of the examples would be faxes or, you know, sending lead generation, those types of things.
Rex Wallace:HRA.
Ana Handshuh:Doing the HRA right. That was another example and although they were really critical of using agents as a venue to obtain HRA, I happen to disagree with CMS about the fact that agents are incapable of obtaining an HRA. I think they're very well positioned to obtain an HRA, but CMS actually saw that as a way to circumvent the cap. But in any case, CMS had originally proposed a $31 addition to the cap to cover administrative expenses and they realized, based on the commentary, that that was too low, so they increased that to $100. So the compensation cap is going to apply to rates paid by all plans, even when the payments are made through an FMO or a field marketing organization. So that's a really important thing, because plans were used to paying a commission to the agent in an administrative override, or another commission, in essence to the FMO, and CMS was really clear about what the definition of TPMO is and what they mean by compensation.
Ana Handshuh:I call this out because I have been reading and hearing a lot of misinformation related to this specifically around, saying this rule isn't final, CMS has to give additional clarification about what they mean by TPMO or what they mean by compensation or what they mean by administrative, and CMS really took great pains to define and explain all of those things and we remind people that final rules are final unless there is another final rule that comes along and codifies something different or clarifies, you know, some clarification guidance that further explains what they mean. I do not expect that to happen here. I do expect them to continue to double down on this cap and I do think, for better or for worse, depending on where you sit, that CMS will really stick to its guns here related to this maximum cap on compensation for each enrollment that is done by an agent or agency or FMO or broker. So I don't know. I know I said a lot, Rex, Melissa, what do you think?
Rex Wallace:I want to ask you too you and Melissa both like are plans upset about this one? I know agents are, I know TPMOs and FMOs are, but and I know plans are if I'm back in my plan chair, I'm upset if I can't use agents for HRAs and I've got to figure out another solution and things like that, but purely on standardizing compensation. Are plans upset about that or no?
Ana Handshuh:So I'll put my sales and marketing hat on, because I used to run sales and marketing organization at a health plan many, many years ago and you may have had to spot me for a backflip over this, but that's because I had the ability to, w e had very good relationships with our agents and we had them as captive agents oftentimes, and so that would have been very well and good with us. To the extent that that might push some consolidation and having plans now acquire their distribution channels, does that give beneficiaries less choice instead of more choice? You know, I don't know if that might be an unintended consequence and whether smaller plans that don't have the ability to maintain their own sales forces or to acquire their own distribution channel, whether that will have an impact on enrollment to those plans or their ability to acquire market share.
Melissa Smith:Yeah, that's a really good question. You know, I haven't heard any plan like your analogy, Ana, I've not heard any plan excited about these rules, though it's a little bit of a surprise, because it does tamp down the bad actors that cause us so much grief so I would have expected a little bit more of a positive reaction from plans, aside from the reality that there are going to be winners and losers, every single item in every one of these pages, most notably this section of the final rule, is going to create winners and going to create losers. If I look at the sales and marketing side, just like Ana you just pointed out, a lot of the plans are starting to figure out where can they just go, flip agents over to be captive, put them on a salary and work around these rules in a positive, compliant, appropriate fashion. It's going to create winners and losers, you know, I think, and you know it's not directly related to just this provision, but every single piece of this rule, plus the other 2024 and 25 rules we've received, are going to do that.
Melissa Smith:I was not long ago at a conference walking around the exhibit hall and thinking the same thing about vendors, not just the agents and brokers or the plans themselves, but the vendors. We're going to have a bunch of folks that just don't survive this. I think the sales and marketing situation is going to advantage some and disadvantage others. I think it's going to wind up being who moves the fastest and the smartest and the most intentionally within the construct of their lens and their mission and their vision. And folks who are slow are not going to win. By and large folks who watch and wait for a year or two or four are just going to not thrive in the near term. I don't think.
Ana Handshuh:What do you guys think about the very little talked about but super important provision around there's a one-to-one ratio between the permission you receive from the beneficiary to call or contact you to that particular plan or that particular interaction. In essence, right, what do you guys think of that? I thought that was pretty life-changing for some of these TMOs that are gathering these leads and then widely distributing them to multiple organizations. What do you think of that?
Melissa Smith:Okay.
Melissa Smith:So I'm going to be a little bit provocative for a hot minute here and I'm going to say one I don't know many, if any plans who are prepared to time and date stamp individual consents to do that.
Melissa Smith:So one I think we're woefully unprepared to administer that compliantly. If I put my beneficiary hat on for a hot minute, I have to say again I've used the word transformational, existential, seismic. I think that one little provision on that one slim, narrow issue, when sales and marketing and member retention is so vital to plans, if we imagine what this does to the beneficiary, I think it's going to dramatically change the entirety of how we interact with members around topics throughout the organization because it's going to reframe how we talk to members on what cadence, on what sequence about what. I think it's going to trim a bunch of vendors out that can't get involved in this. So I've got a little bit of a mixed emotion about the operational impacts that this is going to have beyond just the one-to-one consent, when you've just got one human being on the other side of all this interaction and documentation. What do you think, Rex?
Rex Wallace:I guess the only other thing I would say is that sales experience right is the, I think it's the most important encounter. It sets up their expectations. It's the key driver in retention, right? Like how that sales experience goes and how the beneficiary's expectations are set is the single big- studies I've seen, it's the single biggest driver in whether or not that member ends up staying with that plan or not. Are they put in the right plan? Does the agent put them in the right plan? And I think the scope of that initial conversation is so important. So I think anything we can do to make that better and prevent any kind of mis alignment of incentives or anything around that that that experience is a good thing. I know these changes are huge and I agree, operationally plans are going to have a have a have a hard time. But yeah, I think ff I'm a beneficiary, I think it's the right thing.
Melissa Smith:Hey, Ilene can I sneak us ahead and talk about what I know is one more question on your list about the D-SNP alignment procedures as it relates to this topic specifically? So again, a lot of you guys know I am like a super reader. It's my only superpower in my entire human being is that reading is my superpower, like the written word just jives with my brain.
Melissa Smith:The interconnectedness of this issue, specifically about the one-to-one consent as it relates to the change in the dual eligible special enrollment periods and the way that's gonna work, feels like the most unspoken topic and again I feel like it's probably that the 1,300 pages is a lot. It's a lot to operationalize, it's a lot to understand, nugget by nugget by nugget. But if we think about this one-to-one consent standing alongside the removal of the quarterly SEP, where dual eligible members who are the most susceptible to nefarious behavior in the past could go from plan to plan to plan to plan, quarter by quarter by quarter, we've got a lot of agents and brokers who are accustomed to that old model of lead gen without one-to-one consent, who are used to selling and moving D-SNP members from plan to plan to plan up to four times a year. When we look at the new rules. There is no more quarterly SEP. There is no more agent ability to switch a dual member from dual SNP to dual SNP quarter by quarter.
Melissa Smith:The only place members can go out of a plan is back to original Medicare and a standalone PDP. So as I've kind of been thinking about this one-to-one match of the consent from the sales for the agents and brokers, it stands alongside a one directional churn where we're going to lose members out of MA and then the member can only reenter in that one-to-one consented relationship into an aligned and integrated plan on a different cadence. So we've got a lot of interrelatedness here that I feel like, as we kind of lean into all of the learning events this year, from Qualipalooza to Masterclass, to Part D, to Member Experience, we're going to have to think through how do we adapt any one of these changes when CMS' brilliance is to force the interrelatedness across activities and functions and domains and departments. I t just feels like a magical moment that it's time to get to more learning events, not less, in 2024, because of these interrelated provisions.
Ana Handshuh:Such a good point, Melissa, and I think about the interrelations that you just talked about and thinking about.
Ana Handshuh:If CMS, with these latest provisions, intends for there to be less churn across the program, right, because agents won't have any incentive to move a member and members will be put in the plans that are the right plans for them and there will be a greater incentive for health plans to provide benefits that members want and need and use and there will be more stability in membership across the membership year and from year to year to year. What does that do to Star ratings? What does that do to risk adjustment accuracy over time? What does that do to the effectiveness of our care management outreach and care management programs and wellness programs? Do we get to reap greater benefits across the board related to all of these provisions that are really intended to stop churn and make sure people are in the right plan and can actually access the benefits we've put together? So there might be a little bit more upfront costs for plans, but is it ultimately a very good thing based on the stated goals? What do you guys think?
Rex Wallace:I totally think so. I think you guys are making great, great points and I mean, yeah, I haven't thought about, like, the long-term effects that will fill in Stars and risk adjustment from these changes. It's indirect but, wow, it's definitely connected. And I think, also going back to something you talked about earlier, but even connecting with the SSBCI, because something that really jumped out at me that I think is related to all this is plans are like you talked about, the benefits that we offer right. Plans are going to have to, before they can choose an SSBCI for their membership, have to prove that it's effective, right.
Rex Wallace:And when I think about and I don't know, this puts pressure, I think, on the SSBCI vendors too, because it gives a few examples of how plans can get this. But it can be like a cohort study or their own impact study, but it can just be a study that's peer-reviewed in an article right in a peer review journal. And I think that puts pressure on the vendors right to really have case studies and really be able to document that they are meeting the needs of these chronically ill SSBCI members. And I think that, too, if these benefits are more effective and we're communicating mid-year to the ones who haven't used them. Hey, this is what you've got. This is the scope of the benefit. This is how you use it. I think that impacts retention too because it and the effectiveness of the benefit in general. So I do think these all tie together for a nice picture in the end, if we can just operationalize everything and get there.
Melissa Smith:Okay, y'all, I don't want to be a Debbie Downer, but like I'm gonna be a Debbie Downer for one hot second. I totally agree with everything. Y'all just said 100,000%, but I truly think we're going to spend two years in all of 24 and 25, I think we're going to have an absolute crisis getting to that utopia. And let me tell you why. Think about all of the risk-based provider contracts that have proliferated.
Melissa Smith:The entire cost structure of all these supplemental benefits isn't going to rest on the plans and margin. It's all going to go straight to the risk-bearing providers because most of it is classified as medical spend in some way, shape or form. It's going to be hung up in the settlements alongside the financial negotiations around the change crisis, all hung up in the entirety of this Stars redesign, which is going to do nothing but strip QVPs out that these providers aren't going to expect. So I totally agree that utopia is going to be amazing and we're going to get there, but I do not think it's going to be easy. Okay, now I'm going to keep going for one, like I've got my provocative hat on.
Melissa Smith:Think about all the 2025 benefit changes just to cope with the P&L burden out of the IRA and all of the formulary changes, we're going to have the caps upheaval while we're trying to deal with HOS. I just think we're going to have a massive, massive series of painful potholes that we have to cross over before we get to that highway of glory of the goodness. And how do we get through those potholes? I think it's going to be a very different next 18 months. While we deal with the reality of what it feels like to hit a pothole and feel that pain.
Ana Handshuh:I don't know that anybody's done the calculus yet sat down and said, okay, this provision. These are the implications from an operational standpoint, a compliance burden standpoint, a contractual standpoint, and, having had those discussions with their value-based providers, I saw a lawsuit yesterday where provider groups appear to be suing Aetna because they say these benefits that you're providing and I think they were talking about OTC, for example, in post-discharge meals are marketing ploys. They're not in fact, medical benefits. And why are you considering them in our MLR calculations for our service fund payments? So I thought that was super interesting and very much to your point about plans are now going to have to think about that.
Ana Handshuh:I disagree, right. I do think these are benefits that, or at the very least, the discussion needs to be had of what side of the responsibility for payment of these benefits, where's that coming from? But we fully expect that, now that we're going to have to advertise them appropriately, make sure people can access them. If you're targeting to them and making sure that mid-year we tell people we expect higher utilization on these benefits as well, meaning higher costs. So I do think this is a really big, big area.
Rex Wallace:And I think a lot of plans are guilty of what you just described. I think it's just not pulling the thread all the way through. They have this shiny object. Retention is the most important thing, arguably. There's so much competition and everyone's got a $500 flex card that you're competing with in your market and so you have to have these benefits to attract people and hopefully retain them, but there's very little sometimes focus on really activating the member. Really. It is a marketing thing a lot of times. It shouldn't be, of course, but it ends up being that because there's just no follow up. Or it's the same with. You know, you can say it's the same thing with an in-home assessment, where we're doing the visit but there's no follow up, and that's obviously a big, a big topic now.
Ana Handshuh:That's what CMS was reacting to, Rex, exactly what you said is. That is exactly the problem CMS is trying to solve.
Rex Wallace:I think and I agree, Melissa like, like utopia is like if, if you can kind of see it on the horizon, it's going to take a long time to get there and it's gonna be a really hard journey. Because also in these rules, I mean CMS is putting a lot of onus back on plans you know in in so many different places. I mean from you know the requiring the UM committees to do a health equity analysis for members of social risk factors. Make that study public on the website, right. Make the results public so everyone can see it. Or even the whole administrative review process and reconsiderations around QBPs and putting the onus back on the plan to, hey, you have to prove what you know beyond the shadow of a doubt that CMS failed like so much onus is pushed back on the plans in this. So it's not an easy road by any stretch.
Ilene MacDonald:I feel like we could devote an entire podcast episode to all this, but I am going to switch gears a little bit just so that we can touch on some of the other highlights, and one of them is those network adequacy standards for behavioral health. CMS wants to beef those up to make sure that MA enrollees have access to behavioral health providers. Ana, what do organizations need to know to ensure they comply with the changes?
Ana Handshuh:So they added a CMS with this final rule finalized, adding some specific criteria that plans will have to report in order to utilize nurse practitioners, physician assistants or certified or CNS' to meet the requirements. So just some insight. These are really the continuing of what they've been trying to do to expand behavioral access for Medicare beneficiaries. So the network adequacy focus for them is making sure that they're aligning the codification of the rules with the benefit categories that are provided by these types of therapists, so the marriage and family therapists, the mental health counselors, the opioid treatment providers, so all of those other behavioral health providers. So they really added categories and they added network adequacy standards for these types of providers. And then, because a lot of these providers provide services via telehealth, plans will they made allotments for time and distance network adequacy standards related to these specific providers, because they provide their services very often via telehealth.
Melissa Smith:You know, and one of my favorite parts of that new rule is that they also put in that each provider has to actively verify the volume of services they're performing as the mechanical method by which plans don't just write a bunch of contracts to submit a bunch of HSD tables and operationalize a ghost network. Now that to me, is going to be fascinating, because we've heard that quote unquote ghost network term as a linchpin from some congressional leaders in DC for years. What I took away is that buzzword out of DC has now been codified as a way to eliminate the ghost networks. So again, what I'm kind of doing is looking for the next round of potholes. What else are we hearing buzzy out of DC that we should start expecting will show up in the next final rule. Prior auth is coming. It's all over DC. We should expect prior auth coming next, next pharmacy rebates and PBM overhaul. We're hearing that out of DC buzzy Again, the fact that we've seen the way to take a buzzword and codify procedures and compliance requirements to operationalize a solution.
Melissa Smith:We should start asking our plan leaders are you ready? Are you watching what's in DC more actively? Or if you, if you claim to be a leader, are you leading? Are you watching what's in DC more actively? If you claim to be a leader, are you leading? Are you watching the leading edge, the bleeding edge, or if you're just kind of watching and waiting, are you maybe not a leader? I mean, it's okay to say you're a laggard in a market. I mean there's plenty of industries where laggards can succeed, but it feels like that term in particular has got a bigger story than just the network adequacy under the mental health and behavioral health specific application.
Ana Handshuh:And the reality is that there's been such a shortage of these providers. We know that when we analyze data, or when we look at our access and availability data from a health plan standpoint, we know that we lack adequacy. Or perhaps we have adequacy but we lack appropriateness right to really connect members with the services that they need. And CMS, again, is responding to that, and I think you make a very good point that they're watching what the Hill is saying.
Ana Handshuh:The New York Times recently took on prior authorization. We saw this spectacular video that they put out with patients and providers and about their prior authorization challenges and they made it a very, very compelling and personal video that they've had out now for a while and that we see our elected officials reacting to, and I think that is what's coming. That's here now, right, we see what's happening in the background with CMS and I know it's not the subject of this, but the new focused compliance audit related to utilization management space, and I think that's what's coming next. You know, access, not only from a network adequacy perspective, but also from a utilization management perspective.
Melissa Smith:Yeah, you totally hit the nail on the head on one of the things that in Stars kind of drives me nuts. You know we have all these Stars teams that think Stars is a thing and we can just solve CAHPS by some sort of activity in a Stars department. This is CAHPS. This is an illustration. If you choose to submit a bid to care for human beings in a county, you get the opportunity to lean into that county. The degree to which you construct this network to not just be compliant in the network adequacy requirements but to actively assure that your patients can get the care they need, the drugs they need for positive health outcomes, your CAHPS follow.
Melissa Smith:So again, I walk in with a bias that I do think that the current administration is brilliantly forcing our hand. I hope this will start busting up the old mantra that Stars teams needed to be huge and doing a bunch of work to manage and manipulate perceptions and opinions. This is care, next to cost, next to outcomes, access to care that you can afford and get. I think it's gonna really cause us to ask some really hard truths as we tackle the chase for the 5% QBPs through four-star ratings in new ways that we've been long overdue. Frankly, I think we've been long overdue to bust up a lot of the outdated, obsolete chasing measures and really get to our core, and I think this compliance-related rule is a great illustration of that as we go forward.
Rex Wallace:To add on, access to care is the most important thing. It's why the plan should exist in the first place, it's why members sign up and I agree some of these changes are tackling it head on as far as adequacy for behavioral health providers, but also the prior off thing is an access to care barrier to, right? A lot of times. So sometimes it's necessary, many times it's not, and whether it's necessary or not, it's still a barrier to care frequently, right? So, yeah, I agree those are the biggest things we need to be tackling.
Ana Handshuh:You just made a point about the administration, and I think these themes cross administrations. Right, we started seeing, in the last administration with Seema Verma in the last administration, patients over paperwork and under that, CMS is where we got all of the flexibilities related to addressing social determinants of health. Getting all of the flexibilities related to SSBCI would be another example, and then the current administration just doubled down on it and continued that, and I make that point to say these are safe investments for you to make in your health plan. These themes are not going away. These themes of access, themes of availability, beneficiary protections, closing health equity gaps, addressing social determinants of health, doing the right thing, putting the members in the right plan. All of those things have crossed administrations, from administration to administration, and we think that that's going to continue into the future because it answers the CMS quality strategy, which is a long-term strategy, the CMS health equity strategy, which is also a 10-year long-term strategy passed 2030.
Ana Handshuh:So I think these are important themes where plans shouldn't say, oh, there's so much volatility, I'm going to wait back, I'm going to sit back and see what happens. I think it's time to realize that these are safe, bedrock type things of setting up your plan for success in the future.
Ilene MacDonald:And, Melissa, you mentioned Stars a few minutes ago. Can we talk about that a little bit? I did not cover Stars at all in my article. There was just so many changes. Is there anything significant that plans should know about the Star measures?
Melissa Smith:Yes, and so I'll weigh in. And then Rex and Ana, you guys come behind me. So let's talk about Stars for a hot minute. There was so much in the 1,327 pages that Stars, despite having a yet another batch of seismic changes, Stars didn't even make the summary section at the beginning. And I want to just pause there because, as much as we hear every board and C-suite tell us that getting to four Stars and earning QBPs is their most important goal or if they want to be a five-star plan, it's their most important goal, it is not big enough. Despite being big, it still didn't make that summary page because it's behind the other seismic changes. So I want to frame up what I'm about to say in Stars that there is a prioritization schema here to tackle things in order.
Melissa Smith:This final rule solidified, we have three more new Star measures in 2025. One is not a big deal, just a new HEDIS measure. Nothing new, nothing exciting. Two of the new measures are polypharmacy-based measures that are intended to check us on our real-time clinical intervention capabilities to prevent hits from happening in a Star measure. Now, I know that was a little bit clumsy, but I wanted to use the words that these two new pharmacy measures will behave nothing like the old med adherence measures, will require totally different data, interventions, and strategies for success. They are, as Ana said, part of the bedrock of chasing the long-term CMS quality strategy of tackling safety and the opioid crisis.
Melissa Smith:Now, for a lot of plans, it's a little bit hard to imagine what this means, because we already have three new measures previously codified for addition in 2024, for which many plans are still thinking about what to do in 2024 for the new 24 measures. Now we have three more being added in 2025, while CMS removed three measures in 2025. So I wanted to bundle all that up together because plans probably need to take a pause and thoughtfully tackle the entirety of this, rather than the way most plans have tackled Stars in the last four or five years, which has been measure by measure, list by list, activity by activity. This is enough change coming out of this addition of three more new measures next year, the removal of three next year for us to really think about what are we doing, why are we doing it, what people are we doing it with both doctors and patients, and how do we do the right things for success across multiple measures at the core of our operations? This is not something a Stars team is going to be able to solve. Now. I want to mention one other thing, and then, Rex and Ana, I can't wait to hear what you guys have thoughts on, too. A s we tackle this important new news for 2025
Melissa Smith:in this final rule, it is simply unavoidable that plans are going to have to stop doing what they've done in the past in large part. Th ey're going to have to change investments. They're going to have to eliminate redundancies. I worked with a plan in December that was buying medication adherence computations from three vendors. Same computations purchased three times to check each vendor over and over again. We can't pay three times. It's a limited pot of money. We need to buy once, buy right, maybe have a check and balance. I've seen the same thing with Stars reporting. People buy Stars reporting from one of the 10 or so vendors that sell it and then hire three analysts to redo it. We're going to have to really think about what we do and how we do it. We're going to have to ask more from the vendor of choice and make sure that we're ready for this, because this is a lot of change. It's more change than we've actually seen since Stars was in the demo not coming out of the demo, but in the ACA demonstration period.
Melissa Smith:Six new measures in two years. Three removed measures in two years. Alongside CAHPS and admin weight changes, six or eight dramatic measure changes. This is existential. If you're Stars team, if you're listening to this podcast and you're part of a Stars team, this is this time to get truth to power and talk about really what this means. There's just no way to baby step your way through this slowly or or deal with this incrementally. This is going to be foundational change in programs. Rex, Ana, would you guys frame it differently from your seats on the bus?
Rex Wallace:Ana go ahead.
Ana Handshuh:Yeah, I would say, Melissa, you're absolutely right. But again, this is about back to basics and connecting members with the like I say all the time, services, medications, and information that they need. That's how to succeed at Star ratings. Because of these significant changes that are coming, what I see is that there's a lack of understanding. You know, we've gotten very used to understanding the current measures that we're working on and the mechanics of those measures, Even though some of those mechanics might change. How we report them might change. NCQA has made some significant changes that seem to have happened very quickly, even though we've known for a long time that these changes are coming.
Ana Handshuh:But with these new measures, they look differently, they're measured differently. Should we act to them differently? So I think we need to understand what the mechanics are of these measures that are coming and then also how to work them in holistically in how we generally deliver care and services and programs, within our benefit design, within our care management program, within our wellness programs. We really need to holistically look at these measures and how they fit in. And, Melissa, I think you said it brilliantly, who are we? What members are touching these multiple measures? What providers are touching these multiple measures and how are we going to drive behavior change, not only with providers and members but how are we going to drive that within our own organization? I think it starts with just really getting down to really understanding what are the changes, when are they coming, and then beginning into with the end in mind, backing into what would need to be true in order for me to succeed or in order for me to get this result that I'm looking for?
Rex Wallace:Yeah, I won't even add anything on the, on the changes themselves. You guys captured, everything just from the impact that these changes are going to have and the and the impact from the last couple of final rules. If you think about, you know, fast forwarding out three or four or five years, right, and this is based on analysis that our team's done, that Milliman has done in recent white papers that you know that I like to read as well. We're looking at in payment, year 2028, based on 2027 Stars changes, about $2.5 billion in QBP savings. That's quite a few health plans that are not going to get the QBP that are getting one now.
Rex Wallace:We know, with reward factor going away and HEI, which we haven't talked about because it wasn't in this final rule, it's already been codified but huge change still impacting our future results, when you look at all of this together, virtually every five-star plan will fall to four and a half stars when the reward factor goes away and only 25% of them will even have a shot at earning any of it back. So not a one-for-one, we know, but that's a lot of five-star plans that are not going to be five-star plans in the future. And the 25% that even have a shot based on HEI eligibility, they still have to perform, they still have to be in that upper third of the HEI index or the health equity index or they're not going to get a reward at all. So distribution looks way different, of course, and then this is from a Milliman white paper that I found really interesting.
Rex Wallace:But when you look at the average Star rating declining over the next few years, right now I think in 24 Stars it was 4.05. They're looking at it falling to 3.94 in 2027, which doesn't sound like a whole lot maybe, but it's the lowest since the demo. So we're talking in 10 years, right or so. And if this hold harmless provision change that is the thing still kind of looming out there that's not finalized yet. If that happens, it lowers it even more down to around 3. 9 so you know lots, lots, lots of financial impact from these changes that will be reflected in Stars and loss, quality bonus payments and more difficulty competing, etc.
Ana Handshuh:A nd I think it'll be existential, like an, an existential issue, as Melissa, I think, couched it when we started that these changes are, I think she said seismic, so I would agree.
Melissa Smith:I keep trying to find new words to describe it because I use the word existential and everybody just like, eye rolls and glazes and moves on. So I keep trying to find a word that like causes people to stop and think about what these changes are. You know, Ilene, you asked about what's in the final rule, one of the most interesting things to me about the new measures being added to Stars through this final rule on the Part D side, again, like Ana said, not enough long overdue. I'm excited these Part D Star measures are coming, even though they're going to be hard. The final rule articulates why they're being added to Stars. It's because failures on the measures cause people to stop being able to breathe, to stop being able to function as human beings, to stop being able to walk safely. They get dizzy, they fall.
Melissa Smith:So I bring that up because, like Rex just pointed out, we've got a whole slew of business decisions to make, and then we have a whole slew of clinical decisions to blend with the business decisions. We've not had since maybe mid-2010s. We've not had a moment where we really needed intense involvement of clinicians, designing the work and investments to attract Star ratings, success and QBPs. Now what that's done is it's caused a proliferation of folks chasing little best practices of others and running around and comparing notes. This is a moment for us to figure out what are the clinical leaders in your plan think about these intense clinical issues. The words in the final rule have teed up the right conversation for plan leaders and Star leaders to have. I t's safety, breathing, life, different from maybe I'll go get a mammogram or an eye exam. So I'm pretty excited that this is going to hopefully spur a really impactful moment for our business and clinical leaders to take the time to work together to find positive solutions to this new assignment from CMS.
Ana Handshuh:I do see one more major impact that we haven't talked about, which is a shake-up in the expertise bench inside health plans. Because it tends to be so limited, even at plants that have a huge number of resources to throw at this. There is such complexity that has been created that I see a lot of people leaving a lot of experts whether they're operational experts or they really have this really unique Stars understanding or analytical understanding or clinical understanding that I see all of these folks kind of leaving their organization and saying I'm just going to go into consulting because I am going to want to help more plans, I don't want to be stuck in this one lane, and I think I'm almost seeing this kind of brain drain out of health plans into the consulting space where they can really spread their wings and help more people understand all of the things going on. Are you guys seeing any of that as well?
Melissa Smith:Yeah, definitely.
Melissa Smith:It's shocking how many experts are hanging a shingle out and trying to get into consulting, Though I will say I don't think it's all just the person in the plan making the choice.
Melissa Smith:I've seen a shocking number of smart, skilled leaders asked to leave their organization, shall we say politely, sometimes given a boot out of their organization by just simply being fired, sometimes being told their performance wasn't good enough and just simply cut by organizations.
Melissa Smith:I'm, frankly, a little bit worried about that, because we seem to have an awful lot of plan leaders that don't realize just how scarce smart, skilled people are and, instead of investing in the person who knows a certain domain and helping them shore up pieces and parts they might have missed or might not have done so well on, they're just sort of cutting them out and firing them and there's not a replacement. There are not enough skilled people. This is a really important time for executives to figure out the people they can lean into, even if they have a miss, even if they have a failure. I mean, I'm very worried about what this means for MA plans because there's not there's just not a lot of experts out here in the market right now who grew up building plans and know every chapter of the managed care manual and all the ins and outs just not too many of us out here.
Ana Handshuh:I would urge plans to build their bench strength there. Sorry, Rex.
Rex Wallace:Yeah, it's a huge issue. I totally agree. I mean we've, we've benefited a little bit from it.
Ana Handshuh:I was about to say I think you hired a lot of these people.
Rex Wallace:But but you know, if you look at Stars, right, the Stars program, I mean it's in and we're biased, obviously I'm definitely biased. I mean you know it's such a hard job. I mean you know it's a matrix program driving such significant revenue. Your, your organization, cannot compete if your program is not succeeding. But you have no, you have limited control over it.
Rex Wallace:It's all about influence, right? So you have to be the right person and it's not something that you know you can just slide somebody into who's got some great skills and expertise. Like it takes the right person in and it depends on where the organization is and its maturity and its level of engagement on who that person is. It's a lot of pressure. One of the smartest people in Stars that I knew several years ago got out of Stars and he told me Stars does strange things to a man. But the pressure was a lot. And as much as I love it and I know you guys love it and the challenge of it, it's putting a different complex puzzle together every day and working this complex math problem and influencing people, like if you love it, you love it and you're good at it right. But if you are missing some pieces there and you can't or can't get in the weeds enough to really drive what needs to be driven. You're not going to be there very long and plans feel so much pressure and they will. They'll make a change quickly.
Rex Wallace:If it's not the right person or if that person is just not getting the results based on who the other people are and they can't engage. It's a really hard job and it is driving people out of that role, unfortunately, and that's bad for our industry. We need to figure that out and plans need to equip that person, support that person, that team. It's not that person, it's not just one person, but you know that person's kind of the quarterback, right, but it's the team. And how do we get this team engaged so that we all perform better together? Because if not, yeah, all the experts are leaving and that's not where we need to be as an industry.
Melissa Smith:Yeah, Ilene, huge shout out to RISE and one of the things I've said for the last two or three years is that every single person in every single MA plan has an impact on the plan Star ratings through the daily job they do and the daily decisions they make. We've got to reskill, retrain, upskill, uptrain. We've got a completely new slate of Medicare Advantage Part D and Stars rules and requirements and rigors. This is the time to lean into training and education. I really applaud RISE for rising to that challenge pardon the pun and upping the volume of training and education available for people in every department to come join.
Melissa Smith:I hope we'll see more plans that truly want to succeed in MA and Stars send more people, not less, to learn, more people, not less, to network. More people, not less, to grow as professionals, because we need plans to really lean in and learn and grow and network and development this year. There's no one magical answer to how we get from here to there. So a lot of moment of clarity from a learning perspective and thanks to you and the RISE team for helping us do that.
Ilene MacDonald:Well, thank you, I'm happy that I write about this and not actually do the work, because this is a lot. I want to thank you all for your time today, but want to give you an opportunity for any other final thoughts, anything that you want our listeners today to take away, if they only take away one thing.
Rex Wallace:I think the most important thing is you, and I'm talking to, like, quality leaders and Stars and Medicare Advantage organizations in general really right, with all these changes, but you need to deeply understand these changes and how they impact you. Right? We're all unique. E me one Stars program and I'll show you one Stars program.
Rex Wallace:Every Medicare Advantage organization is different, with their level of engagement internally, their provider makeup, their member mix, right, their broker relationships, like, and the impact on you is going to be unique and you need to understand that and probably with maybe some help, with some data and policy people, but you need to understand that. And then, if you're the quality leader, especially, or even the Medicare Advantage leader or StarS leader, you need to set expectations within your organization. You know, quickly and clearly and confidently on, hey, this is what it's going to do to us, we think, and this is what we need to do to mitigate the risk, right, so I think it's all about, yeah, deeply studying, reflecting and then managing expectations internally.
Ana Handshuh:I will say that typically, health plan leaders are not too keen on understanding how the sausage is made, but I think this is an important moment to get that understanding. So if you're a health plan leader listening to this, you're in the C-suite, you're responsible for the ultimate results of your Medicare Advantage program or you're responsible for funding the Medicare Advantage program. You've got revenue responsibility or clinical responsibility. It's time now, although you may not have had to do so in the past, to at least, at the most basic level, understand how the sausage is made and, like Rex said, understand what is the next best action and what will you need to be doing, planned for the next 36 to 48 months, and so that you can make some long-term you know, some short-term decisions and then some long-term planning for your organization. It will be seismic and it will be an existential issue.
Melissa Smith:I'll add one last thought. You know we've kind of, I think, alluded to this. This is not business as usual. This is not just the next little set of final rule updates and tiny tweaks. What got us here won't get us there, and I say that within a construct that most health plan leaders, both executive and mid-level leaders, wake up every day and their calendars are booked. Their budgets are all spoken for. We're going to have to carve out every.
Melissa Smith:I encourage everyone to look at your calendar. Stop doing things with your time that don't march towards that 24 to 48 month pathway. Stop doing things with your money that don't march you from that 24 to 48 month pathway. We've got to free up both time and money to be able to figure out what will get us there for success in this new world, and it's a great time to find a network of colleagues that you can pick up the phone and call. All of us do it all the time. So if you happen to be listening to this podcast and you feel like you don't have that network of colleagues, this is the time to raise your hand. There's a bunch of folks that will rally around anyone who feels a little alone or isolated, tackling this in their own personal vacuum. A lot of us that just live, eat, sleep and breathe and love this that will help you through this.
Ilene MacDonald:That's great. Thank you and you mentioned it earlier, Melissa, we thank you. We have a lot of conferences coming up that will address some of these issues and create that network of people you can call and ask for some advice. One of them is all three of you are going to be speakers again Qualipalooza in Atlanta in June. We have our Risk Adjustment Forum in May in New Orleans and our Special Needs Plans Leadership Summit in May in New York City. So I thank you all for your time today and to all our listeners, good luck.