2024 CMS Final Rule: Focus on the Health Equity Index Reward

CMS’ 2024 Final Rule was as notable for what it didn’t say as it was for what it did say. Proposed changes from updating colorectal cancer screening measures to modification of the improvement measure hold harmless policy were tabled until a future “surprise” final rule is issued.  

The Health Equity Index Reward 

One of the standout changes CMS did finalize this spring was the Health Equity Index (HEI) reward that will take effect for 2027 Star Ratings (measuring performance in 2024 and 2025). The HEI reward is an indicator that CMS will continue to drive equitable health care despite the presence of social risk factors that may act as barriers to quality care. The replacement of the current reward factor with the HEI reward sends a clear message that the agency expects clinical outcomes for members with social risk factors to be as good or better than outcomes for other members.  

Which Populations Qualify as Having Social Risk Factors? 

CMS took a first pass at defining this portion of a Medicare Advantage (MA) population as members receiving a low-income subsidy (LIS), members who are dually eligible for Medicare and Medicaid and/or those members with a disability. This definition comes as a result of findings reported to Congress in “Social Risk Factors and Performance Under Medicare’s Value-Based Payment Programs.” The report states: 

“Dually-enrolled or low-income-subsidy, Black, and rural beneficiaries, beneficiaries living in low-income neighborhoods, and beneficiaries with disabilities experienced worse outcomes compared to other beneficiaries on many to most of the quality metrics included in the MA Quality Star Rating program.”

How Will the Reward be Calculated, and What Will it Be Worth? 

Rather than creating a new set of measures meant to evaluate outcomes, the agency will choose a set of existing measures and compare outcomes in populations with social risk factors to those without. The key takeaway is that CMS expects plans to go beyond simple identification of members who may have social risk factors affecting their ability to seek and receive quality care and outcomes, plans are expected to take steps to close those care gaps in these populations. The table below outlines the methodology that CMS will apply to the reward. 

Further reinforcing the point, CMS included in its 2024 Advance Notice an expansion of the Low Income Subsidy program. The LIS program will be extended to members earning between 135% and 150% of the Federal Poverty Level (FPL). Previously, this program was only available to members who made less than 135% of the FPL. This means that single members earning between $1457 and $1561 per month and married couples earning between $1973 and $2114 per month may now qualify for premium subsidies.

The combination of the expansion of members qualifying for LIS and the use of LIS as a defining characteristic of contract enrollees who will be evaluated for the newly minted HEI reward sends a clear signal to plans for what to do next. 

What Should Medicare Advantage Plans Do Next? 

1. Know Your Members 

Identifying members who will be counted in the denominator of the HEI reward is step number one. CMS committed to articulating which measures will be included in the evaluation at a future date, but plans should begin now ensuring they have a solid understanding of their dual eligible membership, those qualifying for subsidies, and those with disabilities. 

2. Have Infrastructure in Place 

As stated above, mere identification isn’t enough. Plans should make strides to ensure that their supplemental benefits are in place to address the most common barriers to care. According to the Commonwealth Fund, transportation, housing, and nutrition security benefits have the greatest impact for both health plans and members.

3. Overcommunicate

Health plans have learned the hard way that benefits are not an “if you build it, they will come” proposition. Even members who don’t have the added burden of social risk factors struggle to know what their benefits entail. And communicating with members for whom housing or food are obstacles can be a challenge. Enacting a multi-channel communication approach and ensuring they are written in a way that can overcome low levels of health literacy are keys to success.