The Centers for Medicare & Medicaid Services (CMS) releases Medicare Advantage (MA) Star Ratings every October. The Star Rating system measures the quality of health and prescription drug services received by consumers enrolled in MA and Part D prescription drug plans.
This enables people to compare the quality of Medicare health and drug plans during open enrollment, which begins October 15th, so they can make the best healthcare decisions for themselves. Here are the major takeaways from this year’s Star Ratings, how they impact Medicare Advantage plans, and strategies to optimize future performance and improve member outcomes.
2025 Star Ratings methodology
The CMS has noted that while there were no major methodological changes to this year’s Star Ratings, there were small changes to calculations [1]. The minor methodological changes for 2025 include increasing the weight for the Part C all-cause readmission measure and adding the Tukey outlier deletion to non-CAHPS measures.
The implementation of the Tukey outlier deletion results in more accurate cut points that are not influenced by a small number of extreme outliers, often at the low end of performance. Dropping the small number of extreme outliers at the low end of performance results in an upward shift in the cut points. In some cases, guardrails, which limit the upward and downward movement of cut points year-over-year, can prevent cut point adjustments from reflecting the full impact of Tukey outlier deletion.
An analysis from Wakely Consulting Group has shown that most cut points have increased from 2024 to 2025 [2]. According to the CMS, increases in measure-level cut points result from contracts’ performance and CMS policies that continue to drive quality improvement for the program [1]. Cut points have also increased due to healthcare returning to pre-pandemic normalcy and because scores were overall more compressed, according to the feds.
2025 Star Rating results
2025 marks the third consecutive year the percentage of MA plans offering four-star plans or greater decreased. Some key findings from the 2025 Star Ratings include [1]:
- 40% of MA-PDs (209 contracts) that will be offered in 2025 earned four stars or higher for their 2025 overall rating
- 7 MA-PD contracts (1.79%) earned a five-star rating
- 24 contracts scored 2.5 stars or worse.
- 62% of enrollees (weighted by enrollment) are currently in contracts with a four-star rating or better
- Average star ratings for breast cancer and colorectal cancer screenings were their lowest in four years
Why Star Rating performance is important
CMS Star Ratings are important not only because they help Medicare beneficiaries make informed decisions about their healthcare but also because they impact enrollment, retention, and reimbursement. Higher-performing plans are rewarded with bonus payments and rebates. For example, health plans that earn 4 stars receive a 5% increase in their benchmark as a quality bonus payment.
Bonus payments and rebates enable Medicare Advantage plans to improve their services and offer additional benefits to members, such as reduced premiums and innovations in care, such as home-based care, care management, wellness programs, and telehealth.
Strategies to improve future Star Ratings performances
Being proactive and fostering a culture of continuous quality improvement is vital to keeping up with changes in Star Rating methodology. While some may only focus on next year’s Star Ratings, it is helpful to start early and be strategic about the next two or more years.
Evaluating plan performance against predicted cut points can help plans predict how changes will impact their ratings. Plans should also use predictive analysis to prioritize their population health management and performance improvement efforts and prioritize meeting HEDIS measures that will generate a meaningful impact in the next one to two years.
LetsGetChecked’s healthcare solutions can help close gaps in care so plans can improve member outcomes, meet crucial HEDIS measures, and optimize Star Rating performance. Our configurable and vertically integrated infrastructure provides quality solutions at scale that seamlessly cater to your members' needs.
References
- https://www.cms.gov/newsroom/fact-sheets/2025-medicare-advantage-and-part-d-star-ratings
- https://www.wakely.com/wp-content/uploads/2024/09/2025_Star_Rating_Cut_Point_Changes_September_2024.pdf
- https://www.cms.gov/newsroom/fact-sheets/2024-medicare-advantage-and-part-d-star-ratings
