Average Medicare Advantage star ratings have declined once again, the Centers for Medicare and Medicaid Services (CMS) announced Thursday.
For 2025, the average star rating for Medicare Advantage Prescription Drug contracts was 3.92, compared to 4.07 for 2024, 4.14 for 2023 and 4.37 for 2022. Only seven contracts received a five-star rating for 2025, compared to 38 in 2024.
About 40% of Medicare Advantage Prescription Drug contracts that will be offered in 2025 received at least four stars. In addition, about 62% of Medicare Advantage Prescription Drug enrollees are currently in contracts with at least four stars for 2025.
“Changes in Star Ratings year-over-year are normal and expected and vary by measure,” CMS stated in its fact sheet. “The Star Ratings are intended to capture a contract’s performance during the measurement period and some contracts perform better or worse in different years.”
Star ratings appear on the Medicare Plan Finder for 2025 open enrollment to help consumers choose a plan. They also affect 2026 Medicare Advantage quality bonus payments. Medicare Advantage Prescription Drug contracts are rated on 40 quality and performance measures. For each measure, CMS sets thresholds known as “cut points” to evaluate whether a contract’s performance for that measure qualifies for a 1-, 2-, 3-, 4-, or 5-star rating.
CMS said that it did not make any major methodological changes to the 2025 star ratings, though “minor methodological changes were included for 2025, such as increasing the weight for the Part C Plan All-Cause Readmissions measure from one to three.”
The agency also incorporated Tukey outlier deletion into the hierarchical clustering approach used to set cut points for non-Consumer Assessment of Healthcare Providers and Systems measures. This change improves the accuracy of measure-level cut points by minimizing the influence of extreme outliers.
“When a small number of extreme outliers at the low end of performance are dropped, there is an upward shift in cut points because the few outliers on the lower end of performance are no longer having an undue influence on cut points,” CMS said. “However, in some cases, guardrails, which limit upward and downward movement of cut points year-over-year, prevent cut point adjustments from reflecting the full impact of Tukey outlier deletion.”
CMS also said that many of the measure-level cut points rose from the 2024 star ratings, so contracts had to perform higher on these measures in order to receive a high star rating. The increase in measure-level cut points was affected by several factors, including the fact that performance is returning to pre-pandemic levels.
Several insurers, including UnitedHealth and Humana, are challenging CMS’ star ratings. In an SEC filing, Humana said that just 25% of its members are currently enrolled in plans rated at least 4 stars for 2025, compared to 94% for 2024. CMS also had to recalculate 2024 star ratings in June following lawsuits from SCAN Health Plan and Elevance Health.
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