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quality improvement: more than just HEDIS®

December 21, 2017

You can’t have a conversation about healthcare quality without talking about HEDIS®, which has played a pivotal role in the industry for more than 25 years. Once thought to be nearly impossible, quality measurement is now a critical component of the industry’s transformation to value-based care delivery and payment systems. 


Inside health plan board rooms, however, there’s a growing realization that quality measurement and reporting without a tight connection to quality improvement is a missed opportunity—and often a quite costly one. Here, we share some of the primary drivers causing plans to deepen investment in their quality teams.

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quality improvement is increasingly tied to profitability

As NCQA itself acknowledges, HEDIS measures were designed for comparing performance among payers, not for quality improvement. As the industry evolves, programs that are based on both HEDIS and other measures not only demand quality improvement but also directly impact a health plan’s bottom line if it doesn’t deliver.


The most prominent example of this is the Medicare Advantage Five-Star Quality Rating System. Let’s take a look at its evolution: 

  • 2007: The Star Rating System is developed as a consumer-facing scorecard used to help enrollees choose the best Medicare Advantage plan. High-performing plans are given better visibility.
  • 2011: Star Ratings become associated with reimbursement as the Affordable Care Act (ACA) specifies payment incentives for high performance. The rating system is expanded to include quality incentives for 2012 and beyond.
  • Today: Medicare members congregate to the plans with the highest Star Quality Ratings (four stars and above). Medicare Advantage plans now need to score highly on Star Quality Measures to generate revenue, reduce costs, and increase enrollment.

With each iteration of Star Ratings, their importance to a payer’s bottom line magnifies. Plans with a four-star rating or above are seeing year-over-year growth of 40 percent while plans consistently below a four-star rating grow at less than 1 percent. This cycle will likely continue as payers that receive increased revenue from their high performance re-invest those dollars into additional options and benefits for consumers.

states are increasingly getting into the quality game 

Another key driver of the alignment between quality improvement and reimbursement is the Medicaid Managed Care Quality Rating System. Thirty-two states have opted to expand their Medicaid programs under the ACA. In 2016, the Centers for Medicare & Medicaid Services (CMS) released the Medicaid and CHIP Managed Care Final Rule, requiring states to develop and implement a quality rating system to align performance with clinical quality management; member experience; and plan efficiency, affordability, and management by 2019.


Of course, states want to customize their quality rating systems to adjust for the dynamics they face within their own populations, so the differences between states can be significant. For example, some states focus mainly on composite measures, while others focus on individual measures; some compare results to state benchmarks, while others compare to national benchmarks; and some prioritize quality of care while others prioritize patient satisfaction. These differences from state to state are creating an increasingly complex web of state measures that quality departments must now focus on. While any one state program may not be burdensome to manage, managing several programs between several states becomes difficult.

employers and providers are weighing in on quality measures 

Government programs aren’t the only drivers of quality improvement focus, however. According to an Agency for Healthcare Research and Quality survey, 62 percent of private-sector employers with at least 50 employees self-insured at least one plan in 2016. More employers than ever are self-funding their employees’ health plans, with many crediting this trend to the ACA, and therefore are more actively involved in reducing healthcare costs. Employers are looking for deep analysis into their cost drivers, which often means use of quality measures outside of those tracked by CMS or NCQA—especially those that provide insights into condition prevention rather than just condition management.


For providers, the challenge is one of measures management. According to a survey conducted by Xerox last year, 35 percent of providers are “very concerned” about their ability to keep up with reporting needs in order to receive appropriate reimbursement under quality-driven alternative payment models. Alignment, collaboration, and transparency between providers and health plans in the simplification of quality measurement will create an environment in which the path from measurement to improvement is straighter, clearer, and faster.

a new era for quality improvement

Health plans looking to make a true investment in quality improvement must put their resources into many critical areas:

  • Operational infrastructure
  • Their approach to targeting measures
  • Partnering and aligning with providers
  • Member engagement

The quality improvement department is no longer an afterthought; it is central to every payer’s business strategy. While the investments required to improve quality can be expensive, health plans can’t afford not to make them. As quality measurement programs continue to grow in both prevalence and complexity, payers will not just need to work harder, but smarter through the application of predictive analytics and meaningful stratification of their populations with gaps in care.




Verscend’s end-to-end Quality Improvement solution blends our “Best in KLAS” payer quality analytics and reporting software with high-volume, expert retrieval and abstraction services for overall process excellence, driving the best results at every stage. Learn more about our flexible, innovative solution.

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HEDIS® is a registered trademark of the National Committee for Quality Assurance (NCQA).

As vice president of product at Verscend, David Bartley drives the product development strategy for Verscend’s Quality and Performance solutions, working closely with sales, client services, data operations, and development teams. David has more than 10 years of experience leading product development at a variety of leading healthcare companies, including Humana, Healthways, and eviCore. He holds a BA in economics from the University of North Carolina at Chapel Hill and an MBA from Vanderbilt University.

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