By Petra Brock
The Health Equity Index (HEI) is a score created by the Centers for Medicare & Medicaid Services (CMS) to encourage Part C and Part D health plans to improve care for vulnerable and underserved populations. It is used to address the first priority (which aims to “expand the collection, reporting, and analysis of standardized data”1) laid out in the CMS Framework for Health Equity 2022–2032—an initiative designed to further advance health equity, expand coverage, and improve health outcomes for all individuals served by the various CMS programs.
The HEI was specifically created to help improve the quality of health care and to reduce the disparities in that care for enrollees with certain social risk factors (SRF). CMS intends to do this by using the HEI score as an incentive for Part C and Part D plans to create initiatives that will improve the care of their enrollees with specific SRFs. As outlined in its 2024 Medicare Advantage and Part D Final Rule, CMS will begin issuing an HEI reward based on the score generated by the HEI starting with the 2027 Star Ratings, with those ratings based on data collected in 2024 and 2025. The HEI reward will replace the current reward factor in use since the 2009 Star Ratings.
Shortly after the CMS announcement that HEI will become an integral part of the Star Ratings program, Deft Research included an evaluation of a health equity index in its 2023 Medicare Member Experience Study. The specific objective of Deft’s evaluation was to present information on how different groups of full-pay Medicare members experience the U.S. healthcare system in order to help carriers understand and improve member experiences through the critical lens of health equity, not to provide any expectations of future Star Ratings measures.
The incorporation of health equity as a guiding objective of health and healthcare in the United States goes back to the early 1990s when the U.S. Department of Health and Human Services (HHS) released Healthy People 2000: National Health Promotion and Disease Prevention Objectives which sought to address health equity and disparities reduction among vulnerable and underserved populations.2 To align with HHS, health equity was codified as a strategic objective by CMS in 2022 with the release of its Framework for Health Equity 2022–2032. Health equity is defined as “the attainment of the highest level of health for all people, where everyone has a fair and just opportunity to attain their optimal health regardless of race, ethnicity, disability, sexual orientation, gender identity, socioeconomic status, geography, preferred language, or other factors that affect access to care and health outcomes.”3
The HEI—and by extension, the HEI reward—will be based on a plan’s performance on a subset of current Star Ratings measures for enrollees with certain SRFs. Almost from the beginning, reward factors have been included in the Star Ratings program to incentivize payors to improve the quality of their MA plans. This rewards system provides additional funding for high-performing plans with the idea that these funds be reinvested in quality improvement initiatives to not only increase (or continue to maintain) plans’ Star Ratings but also improve outcomes for all plan enrollees.4 As such, a good HEI score will help carriers secure more funding to aid these SRF populations.
The measures included in the HEI will be drawn from five currently used sources including (1) the Consumer Assessment of Healthcare Providers and Systems (CAHPS), (2) the Healthcare Effectiveness Data and Information Set (HEDIS), (3) the Health Outcomes Survey (HOS), (4) the Pharmacy Quality Alliance (PQA), and (5) CMS administrative data on plan quality and member satisfaction. The final set of included measures will not be known until all data have been collected and evaluated for meeting a list of criteria or not. Two years’ worth of data will be used in the HEI calculation with the 2027 rating based on the data collected in 2024 and 2025.
For the 2023 Medicare Member Experience Study Deft had to create a modified version of the Health Equity Index since not all components of the CMS HEI can be measured in a survey setting—several components are based on performance outcome measures directly collected by CMS. Deft’s index is a composite measure of 26 attitude and experience measures from the following domains: 1) insurance comprehension, 2) access to healthcare, 3) health outcomes, 4) healthcare utilization, and 5) trust in the healthcare system.
The SRF populations that CMS will focus on for the 2027 Star Ratings will include members who qualify for low-income subsidies (LIS) or are dually eligible (DE) for both Medicare and Medicaid, and those who qualify for Medicare due to a disability. In addition, only contracts that meet a minimum percentage threshold of enrollment for these SRF populations will qualify for an HEI reward.5
Deft’s 2023 Medicare Member Experience Study focused on seniors receiving Medicare but excluded those receiving Medicaid or anyone under 65 so it only provides a snapshot of the non-SRF populations that CMS is interested in. However, Deft does conduct annual member experience research specifically on LIS/DE and disabled MA beneficiaries; and we are planning to include an evaluation of Deft’s index in the next Dual Eligible Retention Study which is scheduled to be published in July of 2025. Part of this evaluation will include a comparison of the index scores for LIS/DE and disabled populations with those of the senior population studied in 2023. This comparison should provide insights into how these two populations differ not only on Deft’s health equity measure but also on how they may differ on the CMS HEI score. In addition, this comparison could provide payors with some help on how to improve their Star Ratings under the new rating system.
Among the non-SRF senior population studied in 2023, the distribution of Deft’s index scores indicated wide disparities among the index. As seen in the chart below, the majority of respondents scored close to, if not above, the average, indicating a belief that they viewed themselves as having a good experience with the healthcare system. But there were also some people, even if relatively few in number, who rated their experiences as very poor. Comparisons by ethnicity showed that non-white seniors were disproportionately situated at the bottom of the health equity measure, reflecting well-established racial disparities in health equity. In addition, there were also HEI disparities by income, which illustrates how different socioeconomic factors intersect to impact health. Finally, the study also showed that for MA members, the relationship between HEI scores and Overall Plan Ratings is linear—as scores increase, the likelihood of providing a 9–10 rating increases. What this all means for health insurers is that they may be negatively impacted by disparities in health equity, not just in terms of potentially heightened utilization and cost, but also in terms of lower CAHPS ratings.
1CMS Office of Minority Health. (2022, April). CMS Framework for Health Equity 2022–2032. https://www.cms.gov/files/document/cms-framework-health-equity.pdf
2Department of Health and Human Services. (2001, October). Healthy People 2000: National Health Promotion and Disease Prevention Objectives. https://www.cdc.gov/nchs/data/hp2000/hp2k01.pdf
3Centers for Medicare & Medicaid Services. (2024, October 22). Health Equity. https://www.cms.gov/pillar/health-equity
4Centers for Medicare & Medicaid Services. (2024). 2025 Medicare Advantage and Part D Star Ratings [Fact Sheet]. https://www.cms.gov/files/document/fact-sheet-2025-medicare-advantage-and-part-d-star-ratings.pdf
5Centers for Medicare & Medicaid Services. (2022, December 27). Medicare Program; Contract Year 2024 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, Medicare Cost Plan Program, Medicare Parts A, B, C, and D Overpayment Provisions of the Affordable Care Act and Programs of All-Inclusive Care for the Elderly; Health Information Technology Standards and Implementation Specifications (A Proposed Rule). https://www.federalregister.gov/documents/2022/12/27/2022-26956/medicare-program-contract-year-2024-policy-and-technical-changes-to-the-medicare-advantage-program