Proposed Changes to Medicare Advantage Star Ratings System
Overview of Proposed Revisions
The Centers for Medicare & Medicaid Services (CMS) has announced plans to revise the Medicare Advantage (MA) star ratings system. This overhaul includes the elimination of twelve quality measures and the removal of a health equity reward. The proposed rule, released on Tuesday, indicates the agency’s intention to streamline the metrics that assess health plan performance, particularly those that focus on administrative processes where beneficiaries often find it difficult to differentiate among plans.
Details of the Star Ratings Changes
Most of the proposed changes are expected to take effect in the 2029 star ratings. The CMS aims to eliminate metrics that evaluate customer service, appeal timeliness, and other administrative tasks. In contrast, the agency intends to introduce a new quality measure focused on depression screening and follow-up care.
Significance of Star Ratings
The CMS annually publishes star ratings for Medicare Advantage and Part D prescription drug plans to assist beneficiaries in assessing the quality of health plans prior to enrollment. Currently, the rating system evaluates plans based on up to 43 quality measures across various categories, including health outcomes and patient experience. These ratings significantly impact insurers, as they are linked to substantial bonuses and competitive advantages within the privatized Medicare program. Insurers strive to achieve a 4-star rating out of 5 to qualify for higher bonus payments.
Current Landscape and Financial Challenges
Star ratings remained relatively stable for the 2026 plan year, offering a positive outlook for insurers after a period of declining quality ratings. However, the financial landscape for Medicare Advantage has become increasingly difficult, prompting some insurers to exit markets and reduce benefits to maintain profitability.
Focus on Clinical Care and Patient Experience
The proposed overhaul aims to simplify quality ratings and reorient the program toward clinical care, health outcomes, and patient experiences. The CMS intends to eliminate outdated quality measures in favor of a more focused approach on what is deemed essential for MA enrollees.
Rejection of Health Equity Reward
The agency has opted not to proceed with the Excellent Health Outcomes for All reward, initially set for implementation in the 2027 star ratings. This measure aimed to enhance care for low-income or disabled enrollees. The CMS clarified its decision, stating that the focus will shift toward improving clinical care, outcomes, and patient experience instead of incentivizing specific populations through the Health Equity Index.
Reactions from Stakeholders
The Alliance of Community Health Plans, representing nonprofit health plans, welcomed the proposed changes. They argued that the health equity measure overlooked patients in rural areas and penalized consistently high-performing plans. ACHP President and CEO Ceci Connolly emphasized the importance of prioritizing health outcomes for MA enrollees in light of the proposed adjustments.
Additional Medicare Advantage Policies
The proposed rule encompasses several other policies related to Medicare Advantage. Notably, it suggests introducing a special enrollment period for beneficiaries wishing to change plans if their provider exits their network mid-year. The CMS is also gathering public input on improving risk adjustment and bonus payments, acknowledging concerns that the current system may motivate plans to over-code patients’ illnesses for higher reimbursements.
Future Considerations
The agency is exploring a risk adjustment model that may incorporate artificial intelligence, as well as methods to expedite the quality measurement timeline. Furthermore, it seeks information on the growth of chronic condition special needs plans and strategies to enhance beneficiaries’ well-being and nutrition.
Efforts to Reduce Regulatory Burden
Finally, the CMS proposed several measures aimed at alleviating regulatory burdens on health plans. These include rescinding the requirement for MA plans to send mid-year notices regarding unused supplemental benefits and eliminating the necessity for MA quality improvement programs to address health disparities.