While many plans will not cry about the elimination of the Excellent Health Outcomes for All (EHO4all, the former Health Equity Index (HEI)) reward from Medicare Advantage Star Ratings, some plans have invested heavily to make the conversion to the new health equity improvement program. And the big question is whether the Trump administration is violating due process and the Administrative Procedure Act (APA) by eliminating the new reward as of SY 2027 with almost no notice.
Here is some of my thinking on this:
- The APA and due process requires that plans have adequate notice of (and the ability to comment on) proposed changes. In effect, that is not happening with the EHO4all elimination proposal because the draft has come out with just one month left in one of the measurement years key for calculating the EHO4all reward. What’s more, the rule will not be finalized until months after MY 2025 concludes.
- Plans did not assume the Reward Factor would continue and moved on to strategizing on driving results for health equity populations. Some plans have invested hundreds of thousands or millions of dollars in planning and driving results in anticipation of the EHO4all program coming online in SY 2027.
- Winners and losers are created overnight. Those not eligible right now for the Reward Factor (you need an overall rating in the very high 3s or higher to even have a shot) and those with high concentrations of Low Income Subsidy/Dual Eligible/Disabled populations were counting on EHO4all to help drive Star ratings. On the other side, the winners here are high-performing plans that do not have major health equity populations and get to keep the Reward Factor.
Some plans could challenge the provision and that would be legitimate. The HEI proposal went through full rulemaking back in 2023. Plans had sufficient notice to plan for the major change. They do not now. They relied on the sunset of the Reward Factor and conversion to the EHO4all Reward in their business decision-making.
Federal courts recently cited adequate notice provisions under the APA to throw out various CMS or regulatory provisions, including the RADV audit rule recently and on Stars itself in 2024 (guard rails and the Tukey outlier implementation).
From a good governance perspective, what the Trump administration is doing is simply wrong. The move is blatantly political – Trump hates all things health equity and CMS took an extraordinary step in rulemaking to stop EHO4all implementation. The move is not transparent and encourages government by fiat. It undermines the rule of law and calls into question how the private sector can rely on government direction and make investments. This goes beyond healthcare and takes in all of government regulation.
Whether you like EHO4all or not is beside the point. This is about getting adequate notice and preparation to carry out fiduciary and regulatory duties in government programs and the free market more generally.
The Trump administration has the right to eliminate EHO4all, but it should not be done in a scatter-shot manner. No administration should have the right to upend reliance on regulations and years of planning.
#cms #stars #medicareadvantage #quality
— Marc S. Ryan
