Star ratings are the metrics CMS uses to rate the quality of Medicare Advantage and Part D plans. These numbers help beneficiaries compare plan quality and are how CMS determines quality payments.
Here are 15 facts and updates to know about the rating system.
By the numbers
- Star ratings for Medicare Advantage plans are based on 38 quality measures in five major categories: screenings, tests and vaccines, chronic conditions, member experience, member complaints and customer service. Part D prescription drug plans are rated on 12 measures.
- The star rating system was introduced in 2008.
- It is difficult to earn a five-star rating. For 2023, 11 percent of contracts received the top score out of 507 plans.
- The average contract star rating for 2023 was 4.15.
- Few plans score below three stars. In 2023, 37 contracts received 2.5 star ratings, and just four contracts received two-star ratings.
- Nonprofit plans tend to score more five-star ratings, per CMS. In 2023, 21 percent of nonprofit plans received the top rating, while just 7 percent of for-profit plans earned top scores.
- For 2023, 11 percent of Medicare Advantage beneficiaries were enrolled in five-star contracts, and 51 percent were enrolled in contracts rated four stars and higher.
- For 2023, average ratings were highest on customer service measures like call center availability and timely appeals decisions. Average scores were lowest for health plan and drug plan quality improvement initiatives, according to CMS data.
Impact
- Star ratings can have a big effect on payers' financials. Plans with four- and five-star ratings receive quality bonus payments from CMS.
- Plan ratings can also affect enrollment periods. Medicare enrollees can switch to a five-star plan, if one is available in their area, once outside of the Medicare open enrollment period. Additionally, enrollees in an MA contract with fewer than three stars can switch to a higher-rated plan at any point during the year.
- Star ratings dipped in 2023 after hitting their highest ever levels in 2022. The end of several pandemic-era provisions in ratings calculations accounted for much of the change.
- McKinsey analysts estimated plans could see $800 million in revenue impacts from star rating changes in 2023.
- Some payers, including Aetna and Centene, have made improving Medicare Advantage ratings a top priority, after dips in quality for 2023.
- Though some methodology changes implemented by CMS made higher ratings more difficult to obtain, they should make ratings more stable from year to year, McKinsey analysts predicted.
Proposed changes
- CMS proposed adding a health equity index to the star ratings program in a proposed rule issued in December 2022. The proposed changes to the program would also reduce the weight of patient experience and complaint measures to align with other CMS quality programs.