By MICHAEL MILLENSON
Open enrollment season for Medicare, which began Oct. 15 and ends Dec. 7, triggers a deluge of information about various options. Since I’m a health care consultant and researcher as well as a Medicare beneficiary, I’ve looked critically at what we’re told and what we’re not. Unfortunately, information crucial both for the individual and for the broader policy goal of moving toward a “value-based” care system is often difficult to find or not available at all.
The most glaring example involves Medicare Advantage, the increasingly popular insurer-run plans that are an alternative to traditional fee-for-service Medicare. Plans receive a quality grade from one to five stars from the Centers for Medicare & Medicaid Services. Those grades are designed to incentivize providing the highest quality care for the money — the very definition of “value.” A high grade triggers both a boost in payment from Medicare and a boost in enrollment. Not surprisingly, almost three-quarters of people chose a plan with a 4-, 4.5- or 5-star rating, according to CMS.
Those ratings, however, should come with a large asterisk attached. It’s not just that the methodology can be controversial, particularly when a lower grade is meted out. It’s that the star ratings aren’t anchored in geography, as one would naturally expect; i.e., the rating is for the plan offered in my area. What is colloquially called a “five-star plan” is actually a plan that’s part of a five-star Medicare contract — and those two typically are not the same thing.
For instance, one large insurer contract that I tracked included at least 17 plans scattered across the country. It defies common sense to believe that care quality is identical among plans in, say, Rhode Island, Mississippi, Illinois, Colorado, and California just because they all share the same government contract number.
If you’re wondering who benefits from this not-very-transparent transparency, some insurers have been known to improve the rating of a low-performing plan with a small number of members by merging it into a contract with more members and a higher rating.
In 2024, nearly 33 million people, or 54% of Medicare beneficiaries, were enrolled in an MA plan, according to KFF (formerly the Kaiser Family Foundation). KFF expects that number to increase to nearly 36 million in 2025. It’s a long-accepted truism that “All health care is local.” Medicare beneficiaries deserve local plan information.
Meanwhile, about 14 million Americans, or half of those remaining in traditional Medicare, belong to an “accountable care organization” or ACO. As with MA plans, ACO reimbursement involves a significant financial incentive based on quality measures, although the restrictions on Medicare beneficiaries are much looser. As someone who’s researched ACO patient-centeredness, I know that Medicare regulations require ACO quality information to be public. The location of that information, however, is not required to be proactively shared with ACO enrollees. It can be difficult to impossible to find, and even when available it typically lacks the clarity and context that would make it useful for an individual.
And sometimes there’s no disclosure. When the ACO to which I belong wrote that it was now in partnership with a population health company, I started to dig deeper. I discovered — and stay with me here — the ACO of my nonprofit health system in suburban Chicago is managed by a separate, California-based population health company that is partially owned by the first one, which itself is partially owned by the venture capital arm of my health system. Both those companies are also partially owned by private equity firms.
Yes, I’m still receiving actual care from my local doctor. Nonetheless, the vague term “partnership” hides who is actually managing the ACO and the complicated financial ties involved. I wonder whether even the government knows the impact of private equity and other for-profits doing ACO management.
Moreover, although ACO boards are required to include a Medicare beneficiary — presumably to advocate for the elderly — there is, again, no requirement to proactively disclose that individual’s name, biography, or contact information. My ACO board’s Medicare beneficiary’s name is listed, at least, but he is identified only as “retired.” The fact is that he’s a businessman who a few years ago sold his company to a private equity firm for $2.2 billion and now advises another private equity firm. The board member listed as a “consumer representative” seems to be the former mayor of the California town where the ACO operator is based.
Hidden information is bad for the public and bad for public policy. The easiest solution, of course, is comprehensive, voluntary disclosure. Health insurers, which regularly extol their pro-consumer orientation, know how each local MA plan is performing; they should share that information with members. The same rule for full disclosure of everything a consumer would want to know applies to those who control ACOs.
Absent a sudden spurt of voluntarism, however, public protection demands legislation or regulation. The CMS National Quality Strategy promises to “engage individuals and communities to become partners in their care.” Questionable or absent information about care quality and financial incentives is no way to treat a partner.
Michael L. Millenson is president of Health Quality Advisors & a regular THCB Contributor. This article was previously published in STAT