Keep Reaching for the SDoH, Not just the Stars
The new 2025 Star ratings are now out for Medicare Advantage-Part D (MA-PD) health plans, and only seven plans received a five-Star rating, down from 38 in 2024. About 40 percent of plans received four Stars or higher, and about 62 percent of MA members are enrolled in these plans. The average Star rating for 2025 is 3.92, demonstrating an increasing challenge to plans to maintain or increase ratings against an evolving set of criteria, which will require the development of new strategies by health plans.
Going into 2027 more plans need to re-examine their Star strategy, with more emphasis on innovative approaches to the measures comprising their Health Equity Index (HEI). Designed to incentivize MA plans to improve care quality for vulnerable populations, the HEI rewards plans based on two criteria: plans that have a high percentage of vulnerable members in their population with social risk factors (SRF), such as low-income subsidy (LIS), dual eligibility with Medicaid, and disability; and plans that perform well on a subset of Star rating measures.
By now, it is well-known that these vulnerable populations are disproportionately affected by social risk factors, or social determinants of health (SDoH), which are economic stability, education, social connection, neighborhood environment, and health care access and quality. Because SDoH involves multiple sectors and stakeholders, the approach to address SDoH is likewise multifaceted.
Congress and the Centers for Medicare & Medicaid Services (CMS) are key stakeholders, and thus they now allow MA plans to tailor their benefits to targeted chronically ill populations by expanding the definition of primarily health-related services for supplemental benefits. Payers and providers as stakeholders must collaborate within their communities to develop new ways to address the SDoH that affect their unique population and to understand the intersection of Stars and SDoH. Since SDoH are said to be responsible for 80 to 90 percent of health outcomes, understanding this intersection is critical to developing innovative and comprehensive strategies for delivering high-quality, socially responsible care that is unique to the population served by the payers and providers.
Value-based payment arrangements are designed to incentivize payers and providers to identify and address their members' unique SDoH; however, they require tools to execute a comprehensive payer/provider collaboration strategy that goes beyond simply focusing on the Stars measures and closing quality gaps. Below is a summary of some important considerations for a holistic strategy that is focused on identifying needs, sharing data, and providing appropriate referrals, and there are manyth tools and solutions available to assist MA plans with that focus.
What can payers and providers do?
Complete and accurate clinical documentation and Z-code capture: The foundation and most critical aspect of the strategy is that all SDoH that are applicable to members found during a social needs screening are documented by providers according to ICD-10 coding guidelines and transmitted to payers on claims, and there is a subset of ICD-10 codes in the Z55-Z65 range for this purpose. Ensure that patient workflows include screening for SDoH; there are many tools available for this purpose. If the EMR/EHR system cannot accommodate the capture of these codes or they are not being extracted and sent on claims submitted to payers, providers must work with payers to determine strategies to address this. Payers in turn need to ensure these codes are being submitted on encounters to CMS.
Leverage analytics to build a social risk profile: After providers capture SDoH data, payers must translate information into action by not just providing referrals to services, but also leveraging analytics to better predict future clinical and social needs based on actual utilization. Many health plans have invested in artificial intelligence (AI) and predictive analytics solutions to build a social needs index or profile for their membership. This will help ensure that there are no surprises when the Health Equity Summary Score (HESS) is assigned to the plan by CMS.
Leverage eligibility and enrollment solutions to identify and assist at-risk populations: Providers and payers need to ensure that members are enrolled into low-income programs when applicable. Self-pay or uninsured members in particular should be screened for eligibility. There are solutions available that use predictive modeling to determine the members with the highest likelihood of qualifying for full or partial dual eligibility as well as LIS, and still other solutions that can identify and help members apply for SSI or SSDI disability benefits. This is especially important since the HEI metrics specifically focus on dual, LIS and disability eligibility. It is worth noting that six out of the seven 5-star plans offer benefit packages for the dually eligible.
Benefits design and referral tracking: Payers should offer flexible benefit designs with supplemental benefits based on the SDoH profile or social needs index of the membership and ensure that a solution is in place that makes and tracks referrals and connections to the providers of these benefits, including community-based organizations (CBOs). Get creative in using incentives to help drive member health actions.
Complete and accurate encounter data submission: Payers must ensure that supplemental benefits encounter data is submitted completely and accurately to CMS to the Encounter Data Processing System (EDPS) according to the recently released CMS requirements. CMS wants to understand the use and value of supplemental benefits in MA for the benefit of future policymaking and to ensure that what is being provided as supplemental benefits is consistent with the plan bid. Most importantly, it wants to ensure that supplemental benefits support members' health and social needs because this supports CMS' overall health equity strategy.
Real-time clinical data interchange to identify risk and quality gaps: Payers must proactively identify members with risk and quality gaps by leveraging real-time clinical data interchange tools that inform retrospective and prospective strategies focused on quality gap closure and care management, and that communicate these gaps meaningfully into provider clinical systems to facilitate closure. Payers must also perform clinical documentation improvement interventions for those providers who require education or assistance with documenting and submitting SDoH ICD-10 data.
Over time, we can expect to see improvements in the accuracy of Star rating measures based on new measures that include SDoH, and continued transformation of the relationship between medical and social needs in the delivery of health care. Payers will need to enhance their focus on key non-clinical factors that affect their most difficult-to-engage members by leveraging data to identify SDoH barriers and implementing creative, member-centered strategies to overcome the barriers. They will also need to collaborate closely with providers to ensure they capture their needs. By pairing the above activities with a focus on high-impact measures with the biggest effect on overall performance, health plans can tackle the challenges of the Stars measure that fall under the HEI while positioning themselves for greater operational and financial success in the future.
Dawn Carter
Director, Product Strategy
Centauri Health Solutions, Inc.