Patients are starting to see the first major changes to Medicare required by the Affordable Care Act. The biggest changes are coming to Medicare Advantage plans.

The Centers for Medicare and Medicaid Services (CMS) is beginning to discriminate in plan enrollment based on quality star ratings. Beneficiaries will be allowed to move into 5-star plans at any time during 2012. Both the CMS Plan Finder website (www.medicare.gov/find-a-plan) and 1-800-MEDICARE telephone representatives are discouraging enrollment in plans given fewer than 3 stars.

Star ratings will also have a direct financial impact when CMS begins adjusting plan benchmark rates this year. Four and 5-star plans will see an increase in their benchmarks. Lower-rated plans will not.

“Benchmarks could double for the highest performing plans,” said Jennifer Rak, senior manager for healthcare consultancy Avalere Health during a recent webinar. “Rebates from CMS will also be based on star ratings.”

The new benchmarks will be phased in between 2112 and 2017, depending on the county. A 2-year quality demonstration project will cushion the transition for 3-star plans, added Mike Adelberg, vice president, public policy and government affairs, for senior market insurer Universal American. As with 4- and 5-star plans, 3-star plans will receive quality bonus payments.

When that demonstration project closes, plans with fewer than 3.5 stars will fall over a reimbursement cliff.

“These quality bonuses are very important, Adelberg said. “There are significant parts of the country, particularly rural and less affluent areas, where there are few or no 4- and 5-star plans. Benefits in these areas will become more modest. We could see significant changes to the Medicare Advantage marketplace.”

That’s the idea, said Elizabeth Goldstein, CMS director of Consumer Assessment and Plan Performance. ACA sets a 3-part goal of better care, healthier people/communities, and affordable care. Plans are rated on clinical outcomes, intermediate outcomes, patient experience, access, and process. Outcomes measures get triple the weight of process measures. Patient experience and access get 1.5 times the weight of process measures.

Plans that show higher quality will be rewarded, she said. Plans that demonstrate patient safety issues face a downgrade to no better than 2.5 stars next March.