This week’s In Focus highlights a white paper that Wakely, a Health Management Associates, Inc. (HMA), company published in September 2024, titled “A Cut Above the Rest: Summary of 2025 Star Rating Cut Point Changes.” The paper provides an in-depth analysis of the latest cut point changes from the Centers for Medicare & Medicaid Services (CMS) to demonstrate how policies like the Tukey Outer Fence Outlier removal logic (Tukey), guardrails, and changes in overall quality performance have led to the highest Medicare Advantage (MA) Star Rating cut points in the program’s history.
Why Cut Points Matter
MA Star Ratings are a critical measure of the quality and performance of MA plans. The MA Star Ratings cut points are the thresholds CMS has set to evaluate the performance of MA plans. These ratings, ranging from 1 to 5 stars, are based on various quality measures, including clinical outcomes, patient experience, and plan administration. CMS applies methodologies such as Tukey to set the cut points and guardrails to stabilize them over time. MA plans are evaluated and earn a rating that is based on their performance against the cut points. Higher Star Ratings can lead to increased enrollment and higher payments from CMS, making them a key focus for MA organizations.
Key Findings
Wakely used the 2025 Star Rating Technical Notes to analyze measure-level cut point changes. The data summarize how Medicare Advantage organizations (MAOs) performed on various quality measures during the 2023 measurement year. Notably, the Tukey methodology was applied for the first time within the 2024 Star Ratings cut points. Initially, the full impact of this methodology was evident in the initial 2024 Star Ratings, but the updated 2024 Star Ratings restricted use of guardrails and spread the impact of Tukey over a few years.
The analysis reinforces expectations for changes in MA spending in 2026, in part because of changes in Medicare Advantage Prescription Drug Overall Star Ratings.
Key Considerations
The Star Ratings have been on a steady decline over the last two years while CMS continues to refine and evolve its Star Ratings methodology and areas of focus. Key issues to consider in this climate include:
- MAOs are experiencing significant reductions in quality bonus and rebate payments, which potentially affects opportunities to improve member health outcomes.
- Strategies to enhance Star Ratings and elevate program quality are crucial for performance and meeting the unique needs of MA enrollees.
- MA plans and other stakeholders also should consider that as plans optimize performance on certain traditional quality measures, CMS is placing increased emphasis on member experience with their health plan and providers during care.
- The Star Ratings is an important tool CMS uses to redirect plan focus and resources.
CMS is scheduled to release the final scores and Star Ratings for Star Year 2025 in early October 2024. These ratings will be based on the performance data from the 2023 dates of service. This release will provide MAOs with updated quality and performance metrics, which are used to determine CMS Star Ratings and subsequent quality-based payments.
Connect with Us
For further insights into the Star Ratings and more information on the report, contact our featured experts below.
Strategies and actions MAOs implement in 2024 and 2025 will affect their 2026 Star Ratings. For further insights into programmatic strategies, best practices for design of meaningful solutions to implement, and approaches to measure the effectiveness of these solutions, explore The HMA Stars Accelerator Solution.
