CMS and 37 states are taking a hard look at Medicaid quality measurement. The opportunity is much bigger than simply eliminating paperwork.
For years, Medicaid has had a quality problem. There has been no shortage of quality measures, reports, audits, core sets, HEDIS measures and external quality reviews. The problem is that all of that measurement has not necessarily translated into better health outcomes.
Now, the Centers for Medicare and Medicaid Services (CMS) is trying to change that. On September 25, CMS announced its Investing in Health Outcomes initiative, with 37 states signing a voluntary Medicaid Quality Pledge. Those states represent approximately 56 million Medicaid and CHIP beneficiaries and about $701 billion in Medicaid spending during fiscal year 2024.
The focus is long overdue. A CMS analysis of Medicaid managed care programs across 42 states found approximately 450 quality reporting requirements representing about 260 unique quality measures. Many focus on processes and utilization rather than directly measuring whether beneficiaries are actually becoming healthier.
That is a lot of measurement. It begs the question: Are we measuring the right things? I don’t think we have been. Much like the proposed streamlining of the Medicare Advantage (MA) Stars program to focus more on key clinical outcomes, Medicaid needs its own version of a Stars revolution.
The federal government began moving in that direction during the Obama Administration. The 2016 Medicaid managed care rule established the framework for Medicaid quality rating systems. The 2024 Medicaid managed care final rule went considerably further, requiring states with Medicaid managed care to establish public Medicaid and CHIP Quality Rating Systems, including an initial standardized set of 16 measures. States must display ratings for applicable mandatory measures no later than December 31, 2028. In other words, Medicaid is moving toward a standardized, publicly visible way for beneficiaries to compare managed care plans on quality—not simply another internal reporting exercise.
But implementation has been slow and uneven. Some states have developed meaningful financial accountability around quality. New York, for example, uses performance thresholds at the 50th, 75th and 90th percentiles in its Medicaid managed care quality incentive program. Arizona uses both bonuses/differentials and withholds tied to performance. Earlier CMS analysis identified Arizona, South Carolina and Washington as examples of states using withhold arrangements connected to quality and value-based performance. But too many Medicaid programs never took quality performance seriously. It was a second thought, much like coverage in the program itself.
My view is that a quality program should not simply penalize plans for missing a benchmark. It should create a financial reason to improve and reward actual improvement and achievement.
And CMS has identified four priorities:
- Focus on health outcomes rather than process
- Streamline quality measures
- Advance digital quality measurement with near-real-time data where feasible
- Align financial accountability with outcomes
That fits remarkably well with another CMS initiative I am a fan of. The Universal Foundation is designed to streamline high-priority measures across CMS programs while maintaining room for measures unique to particular populations.
That is exactly the direction healthcare quality should be heading. Medicaid beneficiaries are not identical to Medicare Advantage beneficiaries. Children are not seniors. Dual eligibles have different needs. There will always be population-specific measures. But focusing efforts on clinical outcomes of prevention, primary care, and disease management is key. These are the areas where better care can improve health while potentially reducing unnecessary utilization and cost.
Behavioral health deserves particular attention. CMS has made behavioral health measures in the Medicaid Adult Core Set mandatory beginning with 2024 reporting, while the Universal Foundation includes depression screening and follow-up. Medicare Advantage is also moving in this direction, with Depression Screening and Follow-Up entering the Star Ratings beginning with MY2027.
Last, the push for digital measures and adoption of interoperability is key. The world of manual chart chasing should come to an end. Every measure should have data on all eligible members, not a subset of members.
The initiative shows that the Medicaid opportunity is bigger than reducing paperwork. It is about building a simpler, more clinically meaningful and financially accountable quality system, connecting measurement to improvement rather than simply generating another report. I saw this for years when I was in state government.
CMS has created an important foundation. Now the challenge is to make Medicaid quality measurement actually improve Medicaid quality.
#medicaid #quality #stars #healthplans #managedcare
— Marc S. Ryan
