CMS MA Star Ratings - Algorithm, Evolution Perspective and Introspection

#1SF schematic given below uncovers the extensivity of Nation’s largest value-based program #CMSMAStarRatings. All of us who are associated with US healthcare would come across tons of materials, articles and documentation round the year on #CMSMAStarRatings. This is a topic very close my heart and I’m super charged to write more than I generally do. Please excuse my liberty for this one time! At the first, I decided to breakdown and simplify the exhaustive Star rating methodology for common consumption through this article. The algorithm depicted in #1SF schematic is based on 2024 CMS Star Rating Tech Specs. CMS has already announced significant changes to this algorithm for 2025/2026 Star ratings. My endeavour here is draw appreciation for the involved complexity of CMS Star Rating algorithm by outlining it holistically for all those who has read about Stars but never really got a chance to explore its depth. Hope you find this #1SF schematic useful.

As an Analyst, I’m an ardent follower of #CMSMAStarRatings since 2014. It presents a perfect equation / problem with significant spread of variables and possibilities that pushes my data crunching abilities and keep me busy for days and months uncovering the numbers. The table below compares 2014 and 2024 to show the transition and its relevance in current times.

As a Consultant, everytime I visit this topic, It always makes me think “Does this have to be this complex?”. Medicare Advantage or Privatized Medicare came into existence to contain the disproportionate spend of traditional Medicare back in time. Several years fast forward the equation got completely flipped. In current times, the uncertainly of Star ratings is driven by numerous micro and macro-economic factors such as changes is Star rating algorithm, changes is Star measures, changes in social factors, influence of disaster/unforeseen pandemic, inflation and price rise, health labour shortage and many more. Medicare advantage plans are expected to? have extraordinary foresight to proactively identify and de-risk such factors which are absolutely outside of their locus of control. In reality, a Medicare Advantage plan can truly exercise control on only 30% of Star rating program i.e. administrative/operational measures. For remaining 70% of Star Rating program they are overtly reliant on providers and partners. Thus, Medicare Advantage plans employ several strategies to influence 70% Star ratings such as offering low-cost or free supplemental benefits, zero-dollar premium, competitive value-based incentives, care coordination initiatives, member/provider engagement programs. All such planning is done while maintaining 80-85% (ALR) Administrative Loss Ratio (depending on region) and at the same time enabling a magic bid-value that optimizes quality incentive and rebate gains against consistent 4 Stars and above Star ratings. MA plan's challenges get further magnified with almost 70-75% of the MA market is controlled by big 7 National players making it even more difficult to survive for other health plans. Just take a minute and reflect on plight of smaller MA plans who are under 4 Stars. Thus, looking at Stars performance, I always wonder, if 70% is controlled by Providers and 30% by MA plans, should Providers and MA plans be monitored and incentivized for their share of contributions independently. Isn’t #ACO model better equipped to deliver superior Star rating goals. Can we not reform high dollar spend influencers such as drug price rise, access to low-cost care, broken information exchange. Probably trivial thoughts of a curious learner. Let us leave it at that. ?

1SF Background- Taking advantage of my industry experience while working with wide variety of healthcare problems, shaped 1-Slider-Fox (#1SF) an initiative to uncover some of the complex business problems and situations prevailing in US healthcare. 1-Slider-Fox distinctly breaks down the problems for common understanding with simple flows and visualizations within “One Slide”.? Through #1SF, I look forward to bring series of such business problem explanations pertaining to US payer/payvider in future.

Disclaimer – The content presented through 1SF is my own original creation and includes my own personal viewpoint. This has no bearing whatsoever on my present or past employment.? – Prosenjit Dhar (Pro)