While plans are still grappling with last year’s significant changes to The Center for Medicare and Medicaid Services (CMS) 2025 Star Ratings, more change is on the way. The new administration and Dr. Mehmet Oz, as leader of the CMS, have pledged stricter scrutiny of insurers and have indicated that more measures are on the horizon. For Medicare Advantage plans, this summer is a pivotal period to adapt amid uncertainty.
The Revenue Impact of 2024 Star Ratings Changes
The 2024 star ratings saw significant changes that impacted Medicare Advantage plans' revenue. The average star rating decreased from 4.14 to 4.04, resulting in an approximately $1 billion reduction in quality bonus payments. The number of five-star plans decreased from 51 in 2023 to 31 in 2024, marking the second-consecutive year of declining star ratings.
The result? Only 42% of plans were awarded a rating of four stars or higher, leaving 58% still struggling to reach the four- or five-star ranking. This decline in ratings has led to a significant loss of revenue for many Medicare Advantage plans, with some plans experiencing reductions in quality bonus payments by up to 5%.
What’s New This Summer?
The healthcare industry is bracing for potential regulatory changes that could significantly impact star ratings. Plans must contend quickly with changes like the increased weight of patient-reported outcomes metrics and new measures added this year, including Kidney Health Evaluation for Patients with Diabetes, Improving or Maintaining Physical Health and Improving or Maintaining Mental Health.
This summer is critical to adapt to the new star rating rules, expectations and cut points. The actions you take now will determine your 2027 star ratings.
Five Areas to Focus
Success in the fall starts in the summer. Prepare campaigns, people and partners now ahead of the fall Healthcare Effectiveness Data and Information Set (HEDIS), Consumer Assessment of Healthcare Providers and Systems (CAHPS) and Health Outcome Survey (HOS) urgencies.
Plans should focus on five key areas:
Enhance member engagement to close gaps
Optimize provider collaboration
Develop contingency plans
Focus on high-impact measures
Regularly review and adjust strategies
Tailor Your Efforts for Maximum Impact
Focus your summer efforts on the measures and members that matter most. Before launching last-minute outreach and engagement campaigns, confirm your assumptions about measure-level performance and goals, validate vendor capacity and pressure-test readiness for the latest regulatory changes from CMS. Zoom in on areas where performance is borderline, actionable gaps persist and just a few CAHPS responses or HEDIS numerators are keeping you from meeting goals.
How to Prepare for the Unexpected
For a comprehensive checklist to guide your efforts from now through fall, download the Stars Summer Action Guide and set your plan up for Stars success.
