Flaws in the Medicare Advantage Star Ratings

Flaws in the Medicare Advantage Star Ratings
JAMA Health Forum; David J. Meyers, PhD, MPH; Amal N. Trivedi, MD; Andrew M. Ryan, PhD; 1/25
The objective of the star ratings is to help beneficiaries select better plans, and to reward plans that deliver high-quality care. In June 2024, a US district court judge ruled that the Centers for Medicare and Medicaid Services (CMS) inappropriately calculated Medicare Advantage (MA) Star ratings due to not implementing a previously announced statistical adjustment. First, it is not clear if the star ratings are actually capturing a higher quality, as several measures in the star rating are reported by the plans themselves and plans often overstate their performance. Second, over 80% of contracts by enrollment are rated 4 stars or higher, which is the threshold needed to earn bonus payments, and a single star rating is assigned to each contract even when contracts may cover many different states and regions. Third, while bonus payments for star ratings are costly, plans eligible for enhanced bonuses have not shown greater improvement in measures related to clinical quality or administrative effectiveness. Taken together, the current star ratings are neither useful for all beneficiaries to make their plan decisions, nor do they appear to be capturing quality or catalyzing improvement.