How does HEDIS Affect Health Plan Reimbursement? (VIDEO)

As the H.E.D.I.S. (Healthcare Effectiveness Data and Information Set) season continues, CareNational is dedicating a series of blogs to help health plans. This segment comes from out talks with La’ Chanda Plummer, a highly qualified and experienced HEDIS Program Manager and Quality Improvement leader that we placed at a medium sized health plan in the Pacific Northwest in 2014/2015. It was her job to see that this growing plan achieved NCQA accreditation and improved HEDIS Scores. Under her direction, that health plan improved their Medicare Stars Ratings by 1.5 Stars in just 1 season!

She explained that there are actually several HEDIS related reports that are used, depending on the type of population the health plan serves. There are variations in reporting if the population is all Commercial, such as HMOs, as well as for Medicaid vs Medicare populations. Depending on how the Managed Care Organization is structured, they may send a separate report for their Dual Eligible (sometimes called SNP or Special Needs Program) population that receive both Medicaid and Medicare benefits. Additionally, each state may have similar healthcare programs tied to reported HEDIS measures, or similar quality improvement performance measures.

The Centers for Medicare & Medicaid Services (CMS) have directly linked reimbursement for healthcare services to patient outcomes. Consequently, health plans and providers are being asked to close gaps in care and improve overall quality. National measurement programs like HEDIS reflect different dimensions of plan performance and health outcomes through emphasis on physician collaboration and patient engagement. This focus on quality outcomes can help members get the most from their benefits, which ultimately means better use of limited resources. Over the past few decades, the variety of national quality assessment programs has dwindled and HEDIS is now considered the #1 standard of provider and payer reimbursement.

Ms.Plummer emphasized that it is only when health plans truly understand the amount of money at stake that they take HEDIS audits and quality measures seriously. It is not enough that the Director of Quality Improvement grasps the importance of HEDIS. Even more senior leaders, such as the VP of Medical Management or COO, need to have that deeper appreciation of its importance. That way the entire organization will continuously engage in all the everyday quality improvement activities that support the annual HEDIS season.

Just how much money are we talking about? She explained that for a health plan with just 100,000 members being evaluated by HEDIS, each quality measure would mean around $17 million in reimbursements from federal or state agencies. When you consider that there are 20-25 measures directly tied to reimbursement (depending on the health plan and the population served) that is significant amounts of money! Now consider what that might look like for larger Managed Care Organizations who have a million or more members enrolled.

“You are not talking about a little bit of money. You are talking about what keeps the machine running – literally!”

In addition to standard reimbursement, CMS Stars ratings are directly related to the percentage of HEDIS measures met. That also translates to losses or gains in revenue as Stars ratings are something the public is very aware of when shopping for a health plan. Ultimately, if a health plan demonstrates poor performance for 3 or more years, CMS will assess penalties against them, up to and including shutting the organization down. Having key leaders that internalize the monetary value of each measure, and the importance of HEDIS as a whole, generally transforms the whole company’s understanding of the importance of those quality measures, such as preventative care, safety, patient satisfaction, and provider satisfaction. That is the fundamental concept behind any Pay for Performance (P4P) quality initiative.

As stated initially, CareNational specializes in HEDIS staffing and career search consultation in these specialized areas, but we do not perform the functions ourselves. So how did we do? Did you find this information useful? We love feedback!

Special thanks to La’ Chanda Plummer for providing all this great, detailed information. She is a highly credentialed healthcare industry professional with demonstrated success in leading quality analysis, project oversight and compliance management for high profile employers in the clinical and insurance sector. She is an expert in all things related to Quality Management, NCQA, and HEDIS.

If you would like to speak with Ms. Plummer about HEDIS or the Quality Management processes in general, reach out to Aaron Lebovitz, President, her dedicated recruiting partner here. Contact him at 1.800.974.4828 ext 102, or email him at