The Upcoming MA Stars Overhaul – Implications and How Plans Can Prepare

Medicare Advantage (MA) plans continue to worry about the impacts of the proposed Stars regulatory changes and what it will mean to Star ratings and benefits. This is occurring as the industry as a whole continues to struggle financially and has had to retrench from a geography, product, and benefit perspective. The major investment that has occurred is in Special Needs Plans (SNPs) the past two years, but some of the regulatory changes do not bode well for Stars for plans that will have SNPs or a high concentration of dual eligibles. 

A Refresher on Proposed Changes

Major measure realignment:

Beginning primarily in Measure Year (MY) 2027/Star Year (SY) 2029, CMS proposes to remove 12 measures (really 14 based on duplication in Parts C and D), largely focused on eliminating operational/administrative measures or those that no longer show variability in quality among plans. CMS also proposes to introduce a new Depression Screening and Follow-Up measure that would begin with MY 2027/SY 2029. This was expected as Universal Foundation measures are rolled out throughout government healthcare programs.

As can be seen below, operational measures were almost one quarter of the overall Star rating. 

EHO4all no more:

The Excellent Health Outcomes for All (EHO4all, the former Health Equity Index (HEI)), will not be implemented for SY 2027 (MY 2025). The Reward Factor would be maintained for consistently high-performing plans. This creates winners and losers. While most plans would see little additional reward under EHO4all initially, many plans have invested heavily in EHO4all in anticipation of the program coming online in SY 2027. And many of these plans do not have a shot at the Reward Factor (you need to consistently score at least in the very high 3s or higher on the overall rating to get it). Those who have consistently received the Reward Factor and do not have a major penetration of health equity populations would benefit from the reversal on EHO4all.

The fallout

All of the changes mean great risk for many plans in terms of Star ratings. 

CMS says this is the estimated impact on Star ratings:

• 62% of contracts will see no impact to Star ratings
• 13% of contracts will see an increase of one-half Star
• 25% of contracts will see a decrease of one-half Star
• One contract would drop by one Star

But what these statistics don’t tell you is that a good proportion of other contracts also see erosion in their Star rating, just not enough to cause a half Star rating reduction. For these other plans, they are then that much further away from increasing their Star rating. Overall, the operational measures were high performing compared with other measure groupings for many plans. More importantly, this helped many plans achieve and maintain higher ratings, especially for 4 Star and above. There was less volatility because of the presence of these admittedly easier-to-hit measures.

Actuarial firms seem to back up that impacts are worse than CMS says. A Milliman white paper shows 30% of contracts could lose half a Star, with a few dropping a full Star. At least 42 contracts may fall below the 4.0 Star level. The number of contracts below 3.5 Stars also increases by 63. And showing the impact on other contracts, the national contract-weighted average for overall Star achievement could decrease by 0.15 Stars.

Wakely just came out with its own analysis that dovetails with the worse impacts found by Milliman. It says the national enrollment-weighted market average for overall Star achievement will drop by 0.25 Stars. This will mean a loss of revenue of 1.4% for MA-Part D (MA-PD) plans and fewer 4 Star plus contracts. The lower Star ratings impact plans of all sizes — top 10, large, mid-size, and small.

The quirky economics of all this is that the reversal of the EHO4all reward and maintaining the Reward Factor means better Star bonuses in the short term for some contracts. But for those not getting a Reward Factor, the economics are bad. And once the measure changes come in, generally speaking things are even worse for most contracts.

Other changes also create some uncertainty

• The return of the Improving HOS measures will be 3x weighted. These are tough cohort measures.
• There are the new COB and POLY-ACH drug safety measures. By the time you see claims for overlapping medications, many are non-compliant for the measure for the year. To succeed, plans will need to adopt a risk-based analysis to stop cohorts of members from violating the overlapping medication policies in each measure.
• The new risk adjustment in the medication adherence measures will benefit some plans but hurt others. Plans need to study the risk adjustment algorithms. Gap closure should continue as is (without adjusting on a member level), but plans do need to understand from month to month how the risk adjustment (RA) process is working globally (this is where the risk adjustment is applied). But studying results at a member level could also be beneficial over time. Remember, these measures are 1x-weighted in SY 2028, but return to 3x-weights in SY 2029.
• With SNP enrollment growing and a push to establish free-standing SNP contracts, the impacts to SNP plans and those with high penetration of dual eligibles and SNP lives are especially important to consider. Studies indicate that highly penetrated SNP and dual plans have overall ratings that are 0.3 lower on average. Outcomes on certain measures can be even worse than that. With operational measures gone, even lower performance for these plans and more volatility is possible.

New Approaches Needed

Given the seismic shift in the Stars program, MA plans do need to think differently about their approach.

• Contract-level impact assessment: Conduct an assessment of contract-specific impacts for your contract(s). Are you one of the plans that loses a half Star on your contract(s)? Does the impact reduce your potential to increase your Star rating over time even if you do not drop a half rating?
• Strategic planning rigor: Planning becomes more of a necessity than before. Ongoing strategic planning during the measure year is key. 
• Sustained quality investment: MA plans will need to invest more and consistently in quality improvement budgets. Investments in improvement by measure and holistically at enterprise level capabilities are key. 
• Cut-point proximity analysis: Plot your strategy by looking at how close you are in a given year and across years to certain higher cut points. Mine the data to see what investments make sense in the current year and into the next.
• CAHPS and HOS prioritization: CAHPS and HOS have been trouble spots for many, but now become a key focus. Almost 40% of overall ratings are rooted in these measures as of SY 2029 and substantial investment is needed. These measures must be worked over a series of years. Understanding your members and then remediating issues are both required. Particular attention should be focused on the 3x weighted Improving HOS measures. These will be the Achilles’ Heel for many.
• HEDIS and medication adherence execution: That said, HEDIS clinical and drug measures now will be close to one half of overall ratings. Highly weighted medication adherence measures require daily attention and the freshest of data. Clinical measures require fresh data and concerted efforts each week and analysis each month to drive changes. The event-based HEDIS measures – PCR, TRC, and FMC – all tend to be poorer performing and require substantial investment in several areas. On a retrospective basis, review provider group performance for outliers and success stories. On a proactive basis, train on interoperability and documentation in the medical record of admission and discharge notification. Stress the need for patient engagement within 30 days for inpatient admissions and 7 days for emergency room visits.
• ECDS readiness strategy: You must have an electronic measure ECDS strategy. NCQA has a goal of converting all hybrid measures to ECDS by MY 2029 and non-hybrid by MY 2030. Many plans struggled with COL conversion in SY 2026 and there will be more of this to come without a coherent strategy and investment. In terms of hybrid measures, CBP could hit in MY 2028 as well as GSD, TRC, and the COAs in MY 2029.
• Universal Foundation preparedness: Plan now for the further phase-in of Universal Foundation measures. Depression Screening and Follow-up will hit in SY 2029 but more are sure to come. CMS has telegraphed this. Watch, too, for the following, which were once proposed for Star inclusion but not finalized: Initiation and Engagement of Substance Use Disorder Treatment, Initial Opioid Prescribing for Long Duration, and Polypharmacy: Use of Multiple Central Nervous System Medications in Older Adults.
• Monitor other proposed changes: Some plans will also monitor the following changes that could be made that were proposed in the past but not finalized.
  • Removing guardrails for non-CAHPS measures when calculating cut points. This was not finalized as part of the 2026 MA and Part D rule. 
  • Removing “with and without improvement” for 4- and 4.5-Star plans, effectively requiring improvement in calculations for all plans other than 5 Star plans. This was not finalized as part of the 2025 MA and Part D rule.

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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.