Measuring Quality in the Commercial Market

Medicare Advantage plans are rated by CMS through Star Ratings. Clinicians in traditional Medicare are scored through MIPS. Medicaid managed care quality is governed by state contracts and the federal Core Set. The commercial market has no equivalent public program, and the gap was filled privately.

HEDIS and NCQA

The Healthcare Effectiveness Data and Information Set “is the nation’s most widely used set of health care performance measures.” It is maintained by the National Committee for Quality Assurance, a private nonprofit.

NCQA Health Plan Accreditation “is the only program in the industry that bases results on clinical performance and consumer experience (HEDIS and CAHPS).” Plans seeking accreditation must operate under an insurance license and report audited HEDIS results and CAHPS survey results. NCQA’s Health Plan Ratings “rank commercial, Medicare and Medicaid health plans by combined HEDIS, CAHPS and Accreditation scores.”

The result is a single measurement vocabulary spanning all three markets, which is why HEDIS measures appear in Medicaid managed care contracts and in Star Ratings as well as in commercial arrangements.

What this structure means

A private organization sets the standard. NCQA has no regulatory authority. Its influence comes from employers and states requiring accreditation in their procurement, which turned a voluntary program into an effective requirement.

Self-funded plans are outside it. HEDIS reporting and accreditation apply to licensed insurers. A self-funded employer purchasing administrative services is buying network access and claims processing, not an accredited insurance product, so the accreditation applies to the carrier’s insured business rather than to the employer’s plan.

Measures are largely process-based. As the introductory course’s quality module explained, process measures are easier to attribute and act on but weaker evidence of outcomes. HEDIS has added outcome and patient-reported measures over time, and the same tradeoff applies.

Worth remembering: the commercial market is where the least public quality information exists about the largest covered population. Medicare publishes Star Ratings, MIPS scores, and hospital measures for 68 million people. States publish Medicaid quality strategies. For the 154 million people in employer coverage, the primary quality signal is a private accreditation that most self-funded plans do not carry. When an employer says it cannot tell whether its plan delivers good care, that is usually accurate rather than an excuse.

The practical consequence for contracting

An employer or plan building a value-based arrangement in the commercial market has to select its own quality measures, because no external program supplies them. In practice most arrangements borrow from HEDIS, which is the right instinct: using an established, audited, nationally benchmarked measure is far better than inventing measures whose benchmarks nobody trusts. The contracting course covered how to evaluate a quality gate, and the availability of credible benchmarks is the first thing to check.

Key takeaways

• The commercial market has no federal quality program comparable to Star Ratings or MIPS.
• HEDIS is the most widely used performance measure set, maintained by NCQA, a private nonprofit.
• NCQA accreditation combines HEDIS clinical measures with CAHPS consumer experience results.
• Self-funded employer plans generally sit outside accreditation, so their quality signal is weakest of all.

Sources

• NCQA, Health Plan Accreditation (opens in a new tab)
• NCQA, Health Plan Ratings (opens in a new tab)