CMS Announces Key Updates to Medicare Star Ratings for 2027
The Centers for Medicare and Medicaid Services (CMS) has announced critical updates to the Star Ratings system as part of their final rule for the Contract Year 2027 Policy and Technical Changes for Medicare Advantage and Part D Prescription Drug Benefit programs. These changes, targeting the 2027 review period, will impact payments starting in 2029.
CMS projects that modifications to the Star Ratings will allocate approximately $18.5 billion to Medicare Advantage and Part D plan sponsors over the next decade. This financial shift results from the removal of thirteen Star Ratings categories and the decision to cease the implementation of the Health Equity Index rewards.
The agency plans to eliminate ten Star Ratings measures: six exclusive to Medicare Advantage, one to Medicare Part D, and three applicable to both. Three measures will be phased out beginning with the 2028 ratings period, while the remaining eight will be discontinued in the 2029 ratings period. The removal of measures related to call center operations and appeals is expected to lower ratings due to historically high performance, although they were criticized for perceived unfairness.
Additionally, CMS will introduce a new measure for the 2027 review period, affecting the 2029 Star Ratings. This measure will evaluate the percentage of Medicare Advantage plan members screened for clinical depression using standardized tools and receiving follow-up care within 30 days if they test positive. It aligns with recommendations from the U.S. Preventive Services Task Force, addressing a gap in behavioral health care management.
The decision to maintain the historical reward factor rather than transition to a Health Equity Index reward factor, which was deemed potentially biased against certain plans, reflects a commitment to consistent improvement in clinical care and patient experiences since 2009. These changes aim to streamline the Star Ratings program by focusing on significant performance differences and reducing administrative tasks where plan variance is minimal.
Looking ahead, CMS will continue to evaluate Star Ratings measures, suggesting possible future adjustments. For the 2027 review period, insurance plans should focus on measures scrutinized by CMS, emphasizing clinical care, outcomes, and patient experience to achieve higher Star Ratings and potential bonus payments. It's critical to review past operations concerning call center and statin therapy measures, as they will not be assessed in the 2028 ratings.
Reed Smith will monitor developments in the Star Ratings program and Medicare Advantage and Part D payments. For further inquiries, contact the firm's legal representatives.