What Do Healthcare Leaders Think About CMS’ Proposed Star Ratings Overhaul?

In recent years, there have been numerous lawsuits from Medicare Advantage plans against the Centers for Medicare and Medicaid Services over Star Ratings, including from SCAN Health Plan, Humana and Elevance. MA Star Ratings evaluate plan quality based on several measures, giving them a rating ranging from one to five stars. 

Many of these lawsuits were tied to administrative measures that payers claim led to lower ratings for their plans. For instance, issues with customer service phone calls and foreign language interpreters.

Now, CMS is suggesting a major overhaul of the Star Ratings system, particularly around these administrative measures. This has generated mixed feelings among several healthcare stakeholders. Some say the changes will increase focus on patient outcomes, while others worry they could create problematic incentives for payers.

In addition to informing beneficiaries about the quality of MA plans, Star Ratings are important for financial reasons. CMS provides bonus payments to plans with higher Star Ratings, which they can use to improve benefits for members.

Last week, CMS proposed removing 12 measures focused on administrative processes. This includes metrics like making timely decisions about appeals, the availability of foreign language interpreters at call centers and customer service.

In addition to removing these measures, the agency proposed introducing a new depression screening and follow-up measure that would start with the 2029 Star Ratings. It also proposed not moving forward with the Excellent Health Outcomes for All reward, previously called the Health Equity Index reward. This reward incentivizes health plans to improve health outcomes for members with social risk factors like being eligible for both Medicare and Medicaid, receiving a low-income subsidy or being disabled.

“The Trump Administration is committed to ensuring Medicare beneficiaries have access to high-quality affordable care options,” said CMS Administrator Dr. Mehmet Oz in a statement. “This proposed rule continues that commitment by enhancing Star Ratings to reward meaningful improvements in quality and innovation, while making it easier for beneficiaries to compare and choose coverage that best meets their needs.”

What do the experts think?

According to Dr. Sanjay Doddamani, founder and CEO of Guidehealth and a former CMS senior advisor, the intent of the CMS proposal is to retain the focus on patient outcomes while getting rid of areas with less impact.

“It’s a bit of a pendulum swing when it comes to either having too many measures or too few measures and trying to improve the overall health outcomes, clinical care and patient experience,” he said. “I think that’s what the intent is, at least in terms of retaining the focus on those three, namely, the clinical care, outcomes and patient experience. They want to improve and overhaul things that are less meaningful. So, for example, removing 12 measures that are either administrative or lack meaningful variation on health outcomes.” 

An executive of SCAN Health Plan, meanwhile, said she was surprised by some of the changes.

“I think they’ve been signaling that they want to simplify the program, which, by all means, simplification is great,” said Annie Low, chief quality officer of SCAN, in an interview. “The program is very complex, but getting rid of all the administrative measures was a surprise. … What that does to Star Ratings is it really compresses everything, contracts everything.”

In other words, removing these measures now places a higher emphasis on remaining measures and categories, such as HEDIS (Healthcare Effectiveness Data and Information Set) and CAHPS (Consumer Assessment of Healthcare Providers and Systems) measures.

She added that it wouldn’t be far-fetched to say that the lawsuits related to Star Ratings led to CMS getting rid of these administrative measures. This will likely reduce the number of future lawsuits, she noted.

Another expert echoed Low’s comments on having mixed feelings about the proposal. Medicare Advantage is funded by taxpayer money, and the Star Ratings system is an accountability mechanism to ensure that private plans are meeting the needs of beneficiaries, according to Dr. Adam Brown, an emergency physician and founder of healthcare advisory firm ABIG Health, as well as a professor of practice at the University of North Carolina.

“If the intent is to say, ‘Hey, we want to cut Star Rating metrics that don’t necessarily track patient outcomes,’ then that is possibly a good thing, because there’s an administrative burden to tracking metrics. … [But] if they are reducing those metrics on administrative pieces, like appeals or appeals process time or call time, one has to think those may be important metrics to track, because that relates to how patients navigate the system or even appeal to the system. How is that going to change incentives of the private insurer? How is that going to affect the patient experience?” he said.

He added that it’s great that CMS is adding a metric for depression screening, but would like more information on what the screening is and how in-depth it is.

Brown has more concerns, however, regarding the removal of the Excellent Health Outcomes for All reward (previously the Health Equity Index reward). 

“Disparities in healthcare are a significant problem in the United States,” he said. “Disparities in healthcare span across regions, races, age groups. … Removing the health equity measure from the star rating system could have a very negative consequence to communities of need, and especially those that have Medicare Advantage plans that are more targeted to communities of need. This could have the consequence of private insurers focusing less on those communities.”

A spokesperson for the Better Medicare Alliance (BMA), an advocacy organization for Medicare Advantage, said the group is reviewing the proposal and that a stable, transparent Star Ratings system is essential.

“The key will be ensuring those changes fit together smoothly, avoid unnecessary swings, and continue to support high-quality, affordable care for the more than 35 million Americans who rely on Medicare Advantage. … The most important thing is that any updates—whether in measurement or methodology—support predictability for beneficiaries and providers, and ensure that plans serving high-need or high-risk populations are assessed fairly,” said Susan Reilly, vice president of communications for BMA.

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