Medication Adherence as a Path to Unlock Savings Opportunities

By Joe Mercado

May 21, 2020

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In a post COVID-19 world, it’s more critical than ever for health plans to gain market share as well as decrease costs associated with poor outcomes. By achieving the 5 star rating in the Star Rating Program, Medicare Advantage prescription drug plans and stand-alone prescription drug plans are able to enroll members throughout the calendar year compared to those plans who are only allowed to enroll members through open enrollment.

By achieving the higher rating, these plans are also subject to a bonus payment of around 5%. One way to achieve the higher rating is to focus on the triple weighted medication adherence measures. Plans can enroll in the AB2D program to receive the Medicare Part A and B claims for their enrollees which will help them to better track medication adherence and control their overall costs and outcomes. Read more about the opportunity below.

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Prescription Drug Plans

Medicare Part D is a voluntary outpatient prescription drug benefit for Medicare beneficiaries. These benefits can be delivered as stand-alone prescription drug plans (PDPs) or as a Medicare Advantage prescription drug plan (MA-PDs). PDPs provide drug coverage to individuals choosing to remain within the standard Medicare fee-for-service system for outpatient and inpatient medical services whereas MA-PDs provide beneficiaries with the opportunity to enroll in a comprehensive health care plan that also provides prescription drug coverage.1 In 2019, 45 million of the 60 million people covered by Medicare were enrolled in Part D plans. Of this total, 56% were enrolled in stand-alone PDPs and 44% were enrolled in Medicare Advantage drug plans.1

Why AB2D?

Historically, these drug-specific PDPs have not had access to additional beneficiary level claims data. Essentially, this lack of transparency forced the plans to operate in a vacuum. However, currently, CMS is developing a standards-based API (updated weekly and leveraging the Bulk FHIR Specification, Beneficiary FHIR Data server, and data from the Chronic Condition Warehouse2) to provide PDP sponsors with Medicare Parts A and B claims data for their enrollees called AB2D or “Medicare Parts A and B claims data to Part D Plans”.2 This API allows PDP sponsors the opportunity to request access to the comprehensive Medicare claims data, allowing them to better promote the appropriate use of medications and improve health outcomes, among other benefits.2 The AB2D API provides key information to allow PDPs to track enrollee utilization, patient-provider treatment relationships, and patient history to aid PDPs in their goal of providing the best support to their enrollees.

Ultimately, the value that AB2D brings is the ability for PDPs to improve care coordination and optimize therapeutic outcomes through medication adherence.3 With the hopes of improving care coordination, AB2D will give them more insight (in near real-time) into the beneficiary’s history as well as providers treating them enabling PDPs to prevent adverse healthcare outcomes (i.e., preventable emergency department visits, hospital readmissions) by improving a beneficiary’s treatment plan. With this insight, PDPs have a better chance of promoting medication adherence, a financial incentive of the Star Ratings program.

The Star Ratings Program

Given that PDPs and MA-PDs are CMS plans, they are assessed regularly by the CMS Star Ratings. Each year, CMS conducts a comprehensive review of plans across the host of measures that make up the Star Ratings. These measures range from data reliability, clinical recommendations, and stakeholder feedback. Ultimately, if plans achieve 4 or more stars, they receive a quality bonus payment of 5% for high performers.

MA-PDs are rated on up to 45 unique quality and performance measures; MA-only contracts (without prescription drug coverage) are rated on up to 33 measures, and stand-alone PDP contracts are rated on up to 14 measures.4 In 2020, 210 MA-PDs (52%) earned 4 stars or higher for their overall rating whereas 16 PDPs (30%) received 4 or more stars.4 An additional 42% of PDP enrollees are in 3.5 star contracts4. The 2020 Breakdown of Prescription Drug Plans Categories by stars can be found below.

2020 Overview of MA-PDs and PDPs by Star Rating

Overall Rating 2020 Plans Percentage of 2020 Total Plans
5 stars 20 2 4.99% 3.7%
4.5 stars 72 7 17.96% 12.96%
4 stars 116 7 29.43% 12.96%
3.5 stars 131 21 32.67% 38.89%
3 stars 55 14 13.72% 25.93%
2.5 stars 4 3 1.00% 5.56%
2 stars 1 0 0.25% 0.00%
Average 4.16 3.50

In the words of Michael Kavouras, Vice President of Star Ratings at Aetna, “Getting to 4 stars is really, really critical”.5 Not only do the bonuses help improve medical benefits, but a high star rating creates a competitive edge for a plan and is an unparalleled tool in promoting the plan to beneficiaries.6 The score offers a way for enrollees to compare performance among plans. Past bonuses helped Aetna retain zero-premium plans in many markets and offer options such as dental and vision coverage which then help attract more enrollees.5 Plans achieving a 5-star rating can also enroll members throughout the year, while plans below 5 stars can only enroll members during the late fall annual election period (2 months). Beyond the added bonus payment, a 3 to 4-star improvement can also generate 134 percent more value to its members in extra benefits through more generous rebates.7 In 2018, the bonus pool size was $6.3 billion which was distributed to the higher-rated plans as $500 per member, per year, on top of the premium.6

Originally developed under the ACA, the MA star ratings scale measures how well plans perform in these categories:7

  1. Staying healthy: screenings, tests, and vaccines
  2. Managing chronic (long-term) conditions
  3. Member experience with the health plan
  4. Member complaints, problems getting services, and choosing to leave the plan
  5. Health plan customer service

Listed below are the specific Star measures related to Medication adherence that fall into the Managing chronic (long-term) conditions category.

Medication Adherence

For PDPs and MA PDs, one of the most heavily weighted Star measures is medication adherence. Medication Adherence, broadly speaking, is defined as the extent to which patients take medications as prescribed by their providers. Adherence can be measured in terms of Percent Days Covered (PDC) and the Star Rating medication adherence measures are based on what percent of enrollees have at least 80% PDC. According to the World Health Organization, medication adherence can have a more direct impact on patient outcomes than the specific treatment itself. This in combination with the fact that medication-related measures are weighted so heavily (triple weighted) in Star Ratings, small changes in adherence could dramatically affect a health plan’s star ratings, influencing recruitment and reimbursement. It’s estimated that medication adherence measures can contribute nearly 50% towards the Star Rating aggregate weighting. Health plans are therefore strongly incentivized to improve medication adherence among their members, and there is considerable growth in health plan-supported programs to target medication adherence, including the development and strengthening of pharmacy care management programs focusing on adherence and payment models with providers that incorporate medication adherence measures.

Medication non-adherence is associated with poorer health outcomes and costly, avoidable complications such as heart attack or stroke. The impact of non-adherence is especially exacerbated among patients with multiple chronic conditions – or comorbidities – like high blood pressure, high cholesterol and diabetes.8

Below are the performance thresholds associated with the Star Medication Adherence measures to specify how a small change in adherence could have a major impact on the plan’s overall star rating.

2020 Part D Performance Metrics Thresholds for Star Assignments9

Performance Thresholds D10: Medication Adherence for Diabetes Medications D11: Medication Adherence for Hypertension (RAS antagonists) D12: Medication Adherence for Cholesterol (Statins) D14: Statin Use in Persons with Diabetes (MA-PD) D14: Statin Use in Persons with Diabetes (PDP)
1 star < 74% < 80% < 72% < 74% < 76%
2 stars 74% to < 78% 80% to < 83% 72% to < 80% 74% to < 78%/td> 76% to < 78%
3 stars 78% to < 82% 83% to <86% 80% to < 84% 78% to < 81% 78% to < 39%
4 stars 82% to < 85% 86% to < 88% 84% to < 87% 81% to < 83% 79% to < 83%
5 stars > 85% > 88% > 87% > 83% > 83%

Recently published research from the CVS Health Research Institute (CVSHRI) demonstrates that not only can plans better identify and focus adherence interventions on patients most likely to benefit from them, but in doing so, can also help reduce costs.8 For patients with three or more chronic conditions who became adherent, payors realized up to seven times greater savings than for patients with one or two conditions.8 Conversely, patients who went from being adherent to being non-adherent saw increased spending. Using our 100% Medicare FFS dataset, we calculated the potential savings opportunity for the Frail Elderly and Major Complex Chronic Conditions patient segments by increasing medication adherence (PDC) to the 50-75% or > 75% thresholds for Diabetes, Hyperlipidemia, and Hypertension. As you can see, there is a significant decrease in PMPY if a beneficiary is able to remain adherent to their regimen. For more information around the High Need / High Cost Patient Segmentation, please check out our recent JumpStart report.

Potential Savings Opportunity by Improving Medication Adherence for High Needs High Cost Diabetic Patient Population

High Need / High Cost Segmentation Adherence Bands PMPY % Change in PMPY By Rising to The Next Adherence Band
Frail Elderly < 25% $44,628
> 25% and <= 50% $63,883
> 50% and <= 75% $55,976 12%
> 75% $32,430 42%
Major Complex CC < 25% $11,682
> 25% and <= 50% $12,782
> 50% and <= 75% $11,045 14%
> 75% $8,737 21%

Potential Savings Opportunity by Improving Medication Adherence for High Needs High Cost Hyperlipidemic Patient Population

High Need / High Cost Segmentation Adherence Bands PMPY % Change in PMPY By Rising to The Next Adherence Band
Frail Elderly < 25% $39,964
> 25% and <= 50% $58,547
> 50% and <= 75% $55,064 6%
> 75% $34,318 38%
Major Complex CC < 25% $12,715
> 25% and <= 50% $14,151
> 50% and <= 75% $13,075 8%
> 75% $11,229 14%

Potential Savings Opportunity by Improving Medication Adherence for High Needs High Cost Hypertensive Patient Population

High Need / High Cost Segmentation Adherence Bands PMPY % Change in PMPY By Rising to The Next Adherence Band
Frail Elderly < 25% $39,850
> 25% and <= 50% $59,995
> 50% and <= 75% $51,968 13%
> 75% $29,844 43%
Major Complex CC < 25% $13,515
> 25% and <= 50% $17,833
> 50% and <= 75% $14,513 19%
> 75% $10,081 31%

Patients in the <25% adherence band are coded with the chronic condition but either don’t have the condition or are not bad enough to need the drug yet.

For more information and to access a geography specific savings opportunity, please fill out the form above.

Other Uses of AB2D

As mentioned above, standalone PDPs can enroll in the AB2D program for real-time insights to better manage beneficiary medication adherence against those Star measures. But, the CMS AB2D program can also be used to track success in a variety of advanced payment models like the Enhanced Medication Therapy Management Model (EMTM), Value-Based Insurance Design Model (VBID), or the Part D Payment Modernization Model.

Explore with CareJourney

Explore with CareJourney in multiple ways:

  • generate specific patient lists by partnering with us in the AB2D program;
  • discover specific cohorts of patients with a history of non-adherence.

For those plans eligible and enrolled in the AB2D program, CareJourney is happy to partner with you in generating lists of patients that best meet your organization’s needs or sharing best practices from our Interoperability Advisory Services team.

For those of you who have not enrolled in AB2D, but would like to understand opportunities that would benefit your organization, please reach out to us! CareJourney is happy to partner with you to surface specific cohorts of patients with a history of medication non-adherence or other cohorts that would best help you find success in the pursuit of the optimal healthcare journey.

If you are currently a member, please reach out to your Member Services analyst for more information. If you’re not a CareJourney member, email us at [email protected], or you can learn more by requesting a meeting below.

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  1. Kaiser Family Foundation.An Overview of the Medicare Part D Prescription Drug Benefit. November 13, 2019. Accessed May 10, 2020.
  2. CMS. Claims Data to Part D Sponsors. Accessed May 10, 2020.
  3. CMS. Understanding AB2D Data. Accessed May 10, 2020.
  4. CMS. Fact Sheet – 2020 Part C and D Star Ratings. Accessed May 10, 2020.
  5. Galewitz P. Medicare Plans Score Higher Ratings And Millions in Bonuses. Published March 7, 2016. Accessed May 11, 2020.
  6. Morse S. Healthcare Finance News. October 15, 2019. Accessed May 20, 2020.
  7. Bajner R, Meinkow E, Munroe J, Smith J, McHugh J. Impact of star ratings on Medicare advantage plan success. Published March 15, 2018. Accessed May 11, 2020.
  8. Brennan T. How to Make the Most of Adherence Interventions. CVS Health – Insights Feature. August 4, 2016.
  9. CMS. Part C and D Performance Data – CMS. Published October 21, 2019. Accessed May 10, 2020.