The 2027 MA and Part D rule was a major reset for the Stars program and it is increasingly clear it won’t be the last. Momentum is building across CMS, Congress, and policy groups to rethink how quality is measured and paid for in Medicare Advantage. For plans, this introduces a new level of uncertainty around a program that currently drives more than $12B in annual bonus payments.
What’s emerging is not a series of incremental tweaks. It’s a directional shift toward a tighter, more outcome-driven system with less room for margin.
The 2027 Changes Are Already Reshaping the Landscape
The current rule has already set meaningful compression in motion. By removing a set of “easy” measures and narrowing the program, CMS has effectively raised the bar across the board. The early signal is clear: performance will be harder to achieve, and fewer plans will clear key thresholds.
Estimates suggest that the vast majority of contracts will see rating declines, with a meaningful drop in the number of plans achieving 4 Stars or higher. That translates directly into revenue pressure, with billions in quality bonus dollars at risk and measurable margin impact across MA-PD plans.
This is not a one-year disruption. It’s a structural tightening of the system.
The Bigger Question: What Should Stars Actually Measure?
Beyond the immediate rule changes, there is a more fundamental debate underway. Stakeholders are increasingly aligned on the idea that the current Stars framework does not fully capture what matters most, either in terms of outcomes or value.
Organizations like MedPAC have been consistent in pushing for a redesign of the program. Their view is that incentives should more directly reflect true quality and less on administrative or process-driven performance. In parallel, contributors to Health Affairs and groups like Paragon Health Institute are reinforcing similar themes, even if their end goals differ.
Across these perspectives, a few ideas continue to surface:
- A smaller, more focused measure set centered on outcomes and patient experience
- Greater transparency and predictability in how performance is scored
- A shift away from contract-level evaluation toward more localized performance
- Increasing pressure to make the program budget neutral rather than bonus driven
Individually, none of these changes are trivial. Together, they point to a fundamentally different operating model for Stars.
The Direction of Travel Is Clear
Even if the exact policy path remains uncertain, the trajectory is not. The program is moving toward fewer measures, tighter scoring, and more direct alignment with outcomes. At the same time, the financial stakes are likely to increase as policymakers scrutinize the cost and impact of quality bonuses.
There is also a growing willingness to challenge long-standing assumptions, such as how performance is benchmarked, how equity is accounted for, or whether Stars should continue to function as a budget-additive program at all. Some reform proposals estimate substantial federal savings over time, which only increases the likelihood that change will continue.
What This Means for Plans
For plans, the implication is straightforward but significant: the Stars program is becoming less forgiving and more execution-dependent.
Success will increasingly come down to how effectively plans can translate data into action at the member level, which will enable them to close gaps earlier, prioritize the right interventions, and adapt quickly as measures and methodologies evolve. Static reporting and retrospective analysis will not be sufficient in a system that is both tightening and shifting underneath it.
The plans that perform in this next phase of Stars will not just be measuring performance. They will be operationalizing it in real time.
Bottom Line
The 2027 rule should be viewed as the beginning of a broader transition, not the end of it. The direction is toward a more rigorous, outcome-focused, and financially constrained program.
Plans should assume continued change. Most importantly, they need to prepare accordingly.
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Lilac’s Stars Management platform helps plans navigate these types of major changes to Stars. We have the data models and analytics to easily understand the strategic implications of Stars program changes and agentic AI tools to make a plan’s member engagement in support of Stars more efficient and impactful.
Reach out here to start a conversation with the Lilac team about how we can help your plan.