WELLFLEET — On the first day of open enrollment for Medicare recipients to choose a health-care plan, Catherine Hess received a notice that her current insurer, Blue Cross Blue Shield, would no longer include Outer Cape Health Services (OCHS) in its Medicare Advantage network next year.
The letter, dated Oct. 15, advised Hess that she would have to choose a different insurance plan if she wanted to keep being a patient at OCHS. Otherwise, she would have to find a different provider.
“I was shocked,” Hess told the Independent. “It’s really hard to find primary care out here. I had no idea what to do.”
Hess, who lives in Wellfleet and is 70, is not the only one facing this challenge. About 1,000 Cape Cod residents, 550 of them OCHS patients, are now navigating the tangled web of health insurance options to try to find new coverage before Medicare enrollment ends on Dec. 7.
“It has been kind of a nightmare,” said Francis Conroy of Wellfleet, who has been enrolled in a BCBS Medicare Advantage plan for several years.
Medicare Advantage plans are approved by the government but run by private companies. The reasons for Blue Cross’s decision aren’t entirely clear but appear to be grounded in the health insurance industry’s complex “star rating” system — and an effort to increase profits by dropping certain clients that the company sees as giving it a lower rating.
The Star Rating Business
Amy McHugh, director of media relations at Blue Cross Blue Shield of Massachusetts, said that the company’s decision to drop OCHS has to do with “current market dynamics and challenges in the health-care environment.” She said she could not speak to the details of the decision as “this is an ongoing contractual issue.”
The company’s contract, it turns out, is not just with OCHS but with the Community Care Cooperative of 23 federally qualified health centers throughout the state, all of which provide primary care to underserved populations. In June, Blue Cross said it would be terminating the contract, cutting off 1,300 patients.
BCBS said that those centers were being dropped because of a decline in their quality ratings, according to a person at the cooperative with knowledge of the discussions. But those ratings do not actually correlate with quality-of-care metrics, according to a review of the data by the Independent.
A five-star rating system is used by the federal Centers for Medicare & Medicaid Services (CMS) to score insurance plans based on consumer surveys and clinical quality metrics. The star ratings affect the insurance companies’ bottom lines in two ways. First, stars encourage people to enroll in a company’s plan, and the more participants a plan has, the more profitable it is. Star ratings also affect the rates the government will pay the insurers: lower star ratings fetch lower payments, while plans that have at least four stars receive “quality” bonuses.
The CMS data show that Blue Cross Blue Shield of Massachusetts’s star rating dropped from 4 stars in 2023 to 3½ stars in 2024. Blue Cross told the Community Care Cooperative that it had reviewed quality scores associated with individual providers, and that providers in the cooperative’s network scored the lowest.
But the data show that the company’s lowest ratings are not in clinical quality metrics but in members’ experience with the company’s Medicare Advantage plans. In 2024, Blue Cross scored one star on member experience for its drug plan and three stars for its health plan, while it received four stars on clinical quality.
This finding is consistent with a June 2023 report from the Urban Institute, which found that two-thirds of the star rating is determined by beneficiary experience.
Hess said her experience with OCHS has been positive. “I haven’t experienced or heard of any major quality issues or access issues that would cause Blue Cross to drop them,” she said.
Knowledgeable sources told the Independent that Blue Cross Blue Shield terminated the contract in hopes that dropping federally qualified health centers would inflate its star rating.
A report from Physicians for a National Health Program outlined this practice as a strategy aimed at increasing insurance company profits. Researchers found that Medicare Advantage plans actively seek out healthier, higher-income patients in a process called “favorable selection” and “favorable deselection” to boost their star ratings.
While CMS’s star rating system is meant to incentivize better quality coverage, the unintended consequence is that insurance companies abandon communities they see as a risk to their ratings.
Future Care
OCHS’s 550 patients on Blue Cross’s Medicare Advantage plans have less than a month to find new providers who will be covered by their insurance plans or choose other insurers.
Catherine Hess discovered that the only other Medicare Advantage plans in the state that cover OCHS are through Tufts and Fallon Health. But those have limitations: while BCBS’s plans cover out-of-network medical care, these two alternatives do not.
Francis Conroy sought help from a counselor through SHINE (“Serving the Health Insurance Needs of Everyone”), a state service that coordinates mostly volunteer counseling for Medicare recipients. But the earliest date available for getting help was Nov. 29 — just eight days before Medicare enrollment ends.
Betty Eipper, a SHINE counselor in Wellfleet and Provincetown, said that volunteers have been inundated with requests for help. She said that of the 30 people she has seen who are enrolled in Medicare Advantage plans, 27 have had to change to a different insurer.
This has happened to people covered by United Healthcare’s AARP Medicare plan as well, Eipper said, although that plan is far less popular than Blue Cross’s.
“This is affecting a lot of people,” Eipper said. “What we are really worried about are the people who don’t look at their health-care coverage during open enrollment because they have had the same thing for 5 or 10 years.”
Come January, when their Blue Cross Blue Shield plans end, she said, “I don’t know what the outcome of that would be.”
