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Commentary

2025–2026 Star Ratings: The Path to Success

Ashley McNairy, senior product director, Cotiviti

Even though many Medicare Advantage (MA) health plan executives braced for another year of declining performance on their Star Ratings, seeing their 2024 ratings drop for the second consecutive year has been a tough pill to swallow. However, forward-thinking leaders can use the coming months to proactively address methodology changes and improve their success with the 2025–2026 ratings.Ashley Headshot

Explaining the 2024 Star Ratings Results

The average Star Rating for Medicare Advantage plans with prescription drug coverage (MA-PD plans) dipped from 4.14 for the 2023 ratings to 4.04 for the 2024 ratings, while the percentage of MA-PD plans earning four stars fell from 51% to 42% for the same period. More than one-third of plans saw their ratings drop by a half-star or more (Exhibit 1).

Exhibit 1

Exhibit 1

Source: Cotiviti analysis of CMS data (excludes plans without a 2023 Star Rating).

One reason for this continued decline in ratings is the fallout from the elimination of policies that inflated ratings during the pandemic.

Another reason was the change in ratings methodology. Each year, the Centers for Medicare & Medicaid Services (CMS) bases its Star Ratings on 40 clinical and nonclinical measures with different weights. For the 2024 ratings, CMS changed how it calculates cut points, the range of scores that determine how well a plan performs on each measure. Specifically, CMS eliminated the highest and lowest performers through what is known as the Tukey outlier deletion method. As a result, more than half (52%) of cut points increased for the 2024 ratings (Exhibit 2).

Exhibit 2

Exhibit 2

Source: Cotiviti analysis of CMS data.

These cut point changes had a significant impact on several measures, including Blood Sugar Control for Members with diabetes (Exhibit 3). For the 2023 ratings, a 44-point spread separated 5-star plans from 2-star plans on this measure. For the 2024 ratings, that spread narrowed to 29 points. In addition, the cut points for this measure climbed higher for 2024, with the 4-star threshold increasing by 5 points.

Exhibit 3

Exhibit 3

Source: Cotiviti analysis of CMS data.

As a result of these cut point changes, plans must work hard to maintain a high Star Rating and even harder to raise their current rating. Similarly, if they fail to improve their performance each year, they risk losing a half-star or more. Plans whose ratings drop below four stars forgo a 5% bonus, amounting to millions of dollars in lost revenue. Five-star plans that are unable to maintain their rating also lose the opportunity to enroll year-round — a potentially severe consequence, given that beneficiaries have more MA plan choices than ever.

Key Measures for Success

Of the 40 quality measures that will determine a plan’s 2025 Star Ratings, several new, revised and returning metrics may have a substantial impact:

  1. Colorectal cancer Screening, which will now be reported in the electronic clinical data systems (ECDS) format only, so data can no longer be extracted from hybrid chart review
     
  2. Kidney health evaluation for patients with diabetes, a new measure, which replaces the retired diabetes nephropathy measure
  3. Statin use for people with diabetes and medication adherence, which will use the continuous enrollment requirements from Pharmacy Quality Alliance (PQA), requiring a full year of enrollment in the plan, and will no longer only look for one month of enrollment

  4. Patient experience/complaints and access measures, which have a reduced weight (from 4x to 2x, meaning that 16 measures will lose half their weight)

  5. Improving or maintaining physical health, which is returning as a 1x-weighted health outcome survey (HOS) measure after being “retired” during the COVID-19 pandemic

  6. Improving or maintaining mental health, which also is returning as a 1x-weighted HOS measure

The revised colorectal screening measure could have the greatest impact on plan ratings as most plans rely on hybrid chart review to report this measure. However, if most plans’ performance on this measure slips in 2025, cut points will also reflect this decline, which tempers the potential impact. This illustrates why it is critical for executives to consider national trends as they prioritize which measures matter most to their performance.

Proactive Strategies for Plans

Taking a proactive approach is essential for plans to address the evolving nature of the Star Ratings methodology. Here are several effective strategies that plans can use to enhance their performance for the next round.

Empower your Star Ratings team to foster a culture of continuous quality improvement. Many regional and new MA plans fail to dedicate adequate resources to their Star Ratings efforts. Yet maintaining a plan’s ratings should not be a part-time responsibility of the quality team. Instead, plans should assemble cross-functional teams of dedicated leaders who are accountable for coordinating quality improvement efforts across the organization year-round and engaging the provider network in the process.

Start early and look ahead to 2026. Too many plans only focus on the following year’s Star Ratings when they should be strategic about the next two years or more. For example, HEDIS measures will account for 25% of a plan’s overall 2026 Star Rating, up from 17% for 2025 (Exhibit 4). In addition, over the next two years, CMS has proposed more than 12 different changes that teams should be reviewing and incorporating into their strategies. The Stars team can develop long-range strategies to account for how changes will impact their measure-level and contract-level ratings, such as initiatives to improve HOS scores (as measures increase to a 3x weight in 2025) or account for the loss of hybrid reporting for the diabetes eye exam metric in anticipation of these changes.

Exhibit 4

Exhibit 4

Source: Cotiviti analysis of CMS data.

Create a baseline and benchmark results to identify areas of opportunity. Conducting a comprehensive assessment of their performance across all clinical and nonclinical measures is critical for plans. After determining a baseline of their own performance, plans should benchmark their results against national trends and their competitors to create a list of measures to focus on.

Prioritize measures that will generate a meaningful impact in the next 12 to 24 months. Plans should evaluate their performance against predicted cut points to anticipate how these changes could affect their ratings. By using predictive analytics to project their Star Ratings, plans can prioritize their population health management and other performance improvement efforts. For example, they may want to identify which measures require less than 5% of the population to increase a star as well as which members have multiple care gaps measured by CMS (such as members with diabetes who require blood sugar control, eye exams, kidney disease monitoring, and drug adherence discussions) that could be closed in one visit.

Staying Ahead of the Changes

Even though some plan leaders may be discouraged by their 2024 Star Ratings performance, there is reason for hope. By using insights from predictive analytics, plans can stay ahead of methodological changes and prioritize the specific performance measures that will determine their success in the 2025- and 2026-Star Ratings. Focusing on these critical measures may also present plans with new opportunities to improve provider alignment through targeted population health strategies and bolster the member experience.

© 2024 HMP Global. All Rights Reserved.
Any views and opinions expressed are those of the author(s) and/or participants and do not necessarily reflect the views, policy, or position of Integrated Healthcare Executive or HMP Global, their employees, and affiliates.

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