Since 2008, the Centers for Medicare and Medicaid Services (CMS) has published annual performance ratings for Medicare Advantage (MA) only, prescription drug plan (PDP), and MA and Medicare Part D (MA-PD) contracts, better known as Star Ratings.  CMS uses a five-star rating scale to grade Medicare health plan quality.  Initially, the Star Ratings system for MA plans, established in 2007, was envisioned as a tool to assist Medicare beneficiaries in selecting high quality plans.

Since 2012 CMS has tied Quality Bonus payments and other incentives to Star Ratings as well.  MA plans are rated on defined quality measures: up to 33 are in effect for MA-only plans, and up to 45 are in effect for MA-PDP plans, which also offer prescription drug coverage. Star Ratings range from one to five stars. They are assigned on a contract rather than an organizational basis; that is, one insurer may have multiple contracts.

Among the issues involved in the design and administration of the Star Rating system are its dual uses. First, as a guide to consumers for selecting MA plans and secondarily, as a factor in determining MA plan incentive and bonus payments. This dual function means that CMS must be responsive both to consumers who want transparent results relevant to their purchasing decisions and to health plans that have concerns related to differences in populations and their ability to influence the performance being measured.

The average 2018 Star Rating for MA-PD plans was 4.1.  Nearly three-quarters of MA-PD members are enrolled in a plan with a Star Rating of 4.0 or higher and since 2014, the share of Medicare beneficiaries enrolled in plans with Star Ratings of 4.0 or higher has increased from 52% to 73%.  It is clear that CMS’s Star Rating program helps direct members to higher-rated plans.Click here to add your own text

How Star Ratings are Calculated

The Star Ratings Program is consistent with CMS’ Quality Strategy of optimizing health outcomes by improving quality and transforming the health care system. The CMS Quality Strategy goals reflect the six priorities set out in the National Quality Strategy. These priorities include: safety, person- and caregiver-centered experience and outcomes, care coordination, clinical care, population/community health, and efficiency and cost reduction. The Star Ratings include measures applying to the following five broad categories:

  1. Outcomes: Outcome measures reflect improvements in a beneficiary’s health and are central to assessing quality of care.
  2. Intermediate Outcomes: Intermediate outcome measures reflect actions taken which can assist in improving a beneficiary’s health status. Controlling Blood Pressure is an example of an intermediate outcome measure where the related outcome of interest would be better health status for beneficiaries with hypertension.
  3. Patient Experience: Patient experience measures reflect beneficiaries’ perspectives of the care they received.
  4. Access: Access measures reflect processes and issues that could create barriers to receiving needed care. Plan Makes Timely Decisions about Appeals is an example of an access measure.
  5. Process: Process measures capture the health care services provided to beneficiaries which can assist in maintaining, monitoring, or improving their health status.
The Star Ratings Framework

The Star Ratings are based on health and drug plan quality and performance measures. Each measure is reported in two ways:

Score: A score is either a numeric value or an assigned ‘missing data’ message.

Star: The measure numeric value is converted to a Star Rating.

The measure star ratings are combined into three groups and each group is assigned 1-5 stars. The three groups are:

  • Domain: Domains group together measures of similar services. Star Ratings for domains are calculated using the non-weighted average Star Ratings of the included measures.
  • Summary: Part C measures are grouped to calculate a Part C Rating; Part D measures are grouped to calculate a Part D Rating. Summary ratings are calculated from the weighted average Star Ratings of the included measures.
  • Overall: For MA-PDs, all unique Part C and Part D measures are grouped to create an overall rating. The overall rating is calculated from the weighted average Star Ratings of the included measures.

CMS uses only the Overall Star Rating to determine whether an MA-PD plan will receive additional revenue or other incentive payments.

The Four Levels of Star Ratings that are calculated and reported publicly.

Each year, CMS reviews and often adjusts the measure sets, considering reliability, clinical recommendations, feedback from stakeholders, and data issues.

CMS calculates Star Rating scores for each measure.  Measures are weighted to reflect CMS priorities in judging MA plans. Currently:

  • Process Measures receive a weight of 1.0, as do new measures.
  • Patient experience measures receive a weight of 1.5
  • Outcomes and intermediate outcomes, a weight of 3
  • Quality improvement measures were raised from a weighting of 3 to 5 beginning in 2015

The complete list of 2018 Part C & D Star Rating Measures and their weighting is available at

In addition, MA plans are given a summary Star Ratings on the basis of their performance in five categories, or “domains”:

  • Use of screenings, tests, and vaccines
  • Management of chronic conditions
  • Member experience with the plan (CAHPS)
  • Member complaints and changes in the plan’s performance (assesses the number of member complaints, the number of members choosing to leave the plan, and improvement, if any, in the plan’s performance from year to year)
  • Customer service/appeals (whether the plan makes timely decisions about appeals and how often an independent reviewer thought the appeal decision should be upheld)
What are the Star Rating Data Sources

MA star ratings are based primarily on data collected on performance measures drawn from five sources:

  1. HEDIS (Healthcare Effectiveness Data and Information Set), created by NCQA (National Committee for Quality Assurance), is a set of performance measures designed to assess a plan’s clinical effectiveness, accessibility to members, and use of resources.
  2. CAHPS (Consumer Assessment of Healthcare Providers and Systems) is a survey developed under the aegis of the Agency for Healthcare Research and Quality and CMS to assess a patient’s experience of care.
  3. HOS (Health Outcomes Survey) is a survey sponsored by CMS that gathers health status data from Medicare beneficiaries.
  4. CMS administrative data support measures such as call center performance, volume of complaints, and beneficiary disenrollment.
  5. Part D measures developed by the Pharmacy Quality Alliance are now included among the measure for MA-PDP plans.

Information reported in 2017 reflects care delivered in 2016 and will be incorporated in 2018 Star Ratings, though data collection on some measures may involve a look-back period of longer than one year. Star Ratings are made public each October, just prior to the open enrollment period.

Plans with performance that is both high-quality and stable over time have a reward factor (formerly known as an integration factor) applied to their rating. This can add up to 0.4 stars.

How Star Ratings Impact Medicare Advantage Plans

The MA-PD Star Rating Program is intended to drive two primary strategic goals; to improve the quality of care and general level of health for Medicare beneficiaries, as well as provide Medicare beneficiaries a reliable way to evaluate the quality of health plans when selecting a plan that will best meet their personal needs.

Health plans are required to provide Star Ratings to their members and prospective members and CMS publishes Star Ratings on Medicare Plan Finder where Medicare beneficiaries shop for their individual plans.  Star Ratings, understandably, have a profound impact on annual enrollment.  Additionally, plans with five-star ratings can enroll beneficiaries throughout the year instead of being limited to open enrollment and special election periods.

Health plan’s Star Rating also has a direct impact on their Quality Bonus Payment (QBP).  Health plans with an Overall Star Rating of 4.0 and higher can receive up to a 5.0% QBP in 2018 allowing the plan to lower member premiums or increase supplemental benefits.

How to Improve Your Star Ratings

To successfully improve and maintain high Star Ratings, health plans must employ an ongoing commitment to creating a culture of quality from the top down.   The complexities of Star Rating calculations dictate that success is highly interdependent on every operational department within a health plan.  Leadership must make Star Ratings a focal point of their organization by empowering a multi-departmental team responsible for developing and implementing a comprehensive Star Ratings strategy that includes objectives, goals, resource management, frequent evaluation and management updates.  Some common best practices include:

  • The Star Ratings Team – Team members must become Star Ratings experts on Star Rating measures, calculations and data sources and champion the dissemination of this information to management, staff, vendors and providers.
  • Change Plan – The Star Ratings team is responsible for creating and tracking a detailed change plan. The plan assigns responsibility for each Star Rating measure (i.e. provider, health plan, pharmacy, etc.), aligns timing and interdependencies and then prioritizes initiatives based on their likelihood to improve Star Ratings (i.e. ease of change, measure weight, gap to next Star Rating).
  • Supplemental Surveys – Deployment of a continuous, customizable, supplemental survey protocol will provide actionable data on Star Rating measures derived from CAHPS, HOS and HEDIS surveys. The survey should be customized to align with the specific goals of the organizational change plan.  Fielding the survey by email, SMS and/or telephone allows for real-time patient feedback that identify gaps in care, root cause and the effectiveness of change initiatives.  Attention should be given to the quality of the survey reporting and most importantly the ability to easily disseminate the survey data to leadership, management, staff and providers in a timely manner (i.e. real-time portal, automated email updates, report cards, etc.).
  • Engage Provider Network – Successful Star Ratings strategies include collaboration with the health plans provider network(s).  Engaging providers through Stars measure education and real-time patient experience survey data will encourage providers to make progress toward value-based care; improving outcomes while reducing costs.  Financial incentives for strong performance and/or meaningful improvement can be a powerful tool.
  • Review Star Ratings Monthly – Consistent evaluation of the Star Rating improvement plan is vital to it’s success.  Creating accountability both from leadership, the multi-departmental Stars team and other stakeholders will ensure that priorities are correct, efforts are aligned, and improvement strategies are effective.