Star Ratings used to be a measurement program. You performed, CMS scored, and the relationship between the two was stable enough to build a business plan on. That’s no longer a safe assumption.
Somewhere in the last few cycles, Stars split into two different games. One is played in Baltimore: cut point recalculations, measure reweighting, methodology changes, and now litigation over how ratings get computed at all. Plans don’t control that game. They can comment on rulemaking and challenge outcomes, but they can’t plan around it with any confidence.
The other game is played member by member: whether a member with diabetes gets their eye exam, whether a prescription gets refilled on time, whether someone who called customer service twice with the same unresolved problem just received a CAHPS survey. Plans control this game almost entirely. And the more chaotic the first game gets, the more the second one matters.
Fewer Winners, Bigger Pot
The numbers behind this year’s volatility deserve a closer look than the headlines gave them. KFF reported in July That 68% of Medicare Advantage enrollees are in contracts qualifying for quality bonus payments in 2026, down from 75% in 2025 and the lowest share since 2018. Behind that drop: substantially fewer contracts achieved at least 4 Stars than the year before, as recalculated cut points raised the bar across the program.
Here’s the detail worth pausing on. Even with fewer plans clearing the bar, total quality bonus spending still rose, reaching at least $13.4 billion, up from $12.7 billion in 2025.
Fewer winners. Bigger pot. That combination changes what Stars means strategically. This is no longer a program where most plans earn a participation bonus, and the difference between 3.5 and 4 Stars is a rounding error in the financial plan. The dollars are concentrating among plans that hold the line at 4 Stars, while cut points move against everyone. Falling below the threshold now means watching a growing pool of revenue flow to competitors who didn’t.
What the Litigation Actually Signals
If you want a measure of how financially serious the Stars have become, look at where the disputes are happening. After Clover Health won its challenge to CMS’s ratings methodology this spring, CMS recalculated the 2026 Star Ratings. In early July, Elevance sued, arguing CMS applied the wrong methodology to the recalculation and claiming roughly $115 million in lost bonus payments.
The merits of the case will be sorted out in court, and that’s not the point here. The point is what the litigation tells us: when the industry’s largest plans are litigating the fine print of how ratings get computed, the measurement system’s stability has fallen behind its financial stakes. Ratings methodology is now material enough to fight over, which means no plan should assume this year’s rules survive until next year.
Why Medicare Advantage Star Ratings Got Harder to Earn
Set the courtroom aside, and the structural picture is still unforgiving. Stars are graded on a curve. Cut points recalculate annually against industry-wide performance, so when everyone improves, standing still is falling behind. The pandemic-era guardrails that once cushioned declines are gone. Measure weights keep shifting under plans’ feet: member experience measures dropped from 4x to 2x weighting with the 2026 ratings, a reminder that even the definition of what matters most is subject to revision.
Each of these changes has a reasonable policy rationale. Together, they mean a plan can execute exactly as well as it did last year and earn a lower rating. That’s the environment quality leaders now have to plan in: one where effort and outcome have become loosely coupled at the methodology level.
Which is precisely why the member level is where the strategy has to live.
The Levers That Don’t Move
You can’t control where CMS sets a cut point. You can control how much margin you carry above it. Every point of cushion a plan builds through member-level execution is insurance against methodology it can’t predict.
In our work with Medicare Advantage plans, the pattern among plans that weather cut point volatility is consistent, and it’s less about working harder than working earlier:
- CAHPS as a year-round discipline, not a survey-season scramble. The strongest plans identify which members are likely to respond negatively months before the survey field, then resolve the underlying issue rather than hoping it fades.
- HOS shaped across the whole year. Members’ perception of their own physical and mental health is built through every interaction, not by anything a plan can do the week the survey arrives.
- HEDIS gap closure on the member’s calendar, not the measurement year. Reaching people in the first quarter, when there’s still time to act, not in November.
- Medication adherence is treated as a ground that can be held. Triple-weighted on the Part D side, and one of the most predictable, influenceable behaviors in the entire Stars portfolio.
- Honest measurement. Reached versus unreached, intervention versus control, so the plan knows what moved the number instead of guessing.
Talking CAHPS: Exploring Best Practices for Off-Cylce CAHPS and HOS Surveys
The results compound quietly. In one program mPulse ran with a Medicare Advantage plan, members who received proactive outreach ahead of the CAHPS window disenrolled at a 2.7x lower rate than members who didn’t. That’s a member-experience outcome and a retention outcome in the same motion. And retention protects the very denominator your future ratings are calculated on.
None of this requires knowing what CMS will do next. That’s the point.
The conversation to have internally
A few questions worth putting on the agenda before the next planning cycle, the kind that tend not to come up when ratings are stable:
- If cut points move against us again next year, which of our measures carry enough margin to absorb it, and which are one bad recalculation from a downgrade?
- How much of our current Stars forecast assumes this year’s methodology survives intact?
- Do we know which members are likely to drag our CAHPS scores before the survey fields — or do we only find out after the score drops?
- Is our gap-closure effort front-loaded into the months when members can still act, or concentrated where the fiscal calendar says it should be?
- If we lost bonus status for one year, what’s our plan for the member experience investments that bonus revenue currently funds?
If those questions don’t have crisp answers, that’s not a criticism. It’s the agenda.
Where this settles
The disputes over methodology will eventually be resolved — in court, in rulemaking, or in some combination that satisfies no one completely. What won’t change is the direction of travel: more scrutiny on the program, more money concentrated among fewer high performers, and less tolerance for plans that treat quality as a reporting exercise.
The plans that come out ahead in this era won’t be the ones that correctly guessed the next methodology. They’ll be the ones whose member-level fundamentals were strong enough that the methodology mattered less. The ground is moving. Build on the part that doesn’t.
Sources:
- KFF: Medicare Will Spend More Than $13 Billion on the Medicare Advantage Quality Bonus Program in 2026 (July 1, 2026)
- mPulse internal program documentation (CAHPS/retention predictive analytics program)
Frequently Asked Questions
Why did fewer Medicare Advantage plans earn 4 Stars in 2026?
Only 207 MA contracts achieved at least 4 Stars for 2026, down from 261 the year before, largely because CMS recalculates cut points annually against industry-wide performance. As overall performance shifts, the score required for each rating level moves, meaning a plan can perform consistently and still see its rating fall.
What share of Medicare Advantage enrollees are in bonus-eligible plans in 2026?
Per KFF, 68% of Medicare Advantage enrollees are in contracts that qualify for quality bonus payments in 2026, down from 75% in 2025 and the lowest share since 2018. Total quality bonus spending still rose to at least $13.4 billion.
What can health plans control when Star Ratings methodology keeps changing?
Plans can’t control cut points, reweighting, or litigation outcomes, but they can control member-level inputs: CAHPS and HOS experience, HEDIS gap closure, medication adherence, and retention. Building margin above rating thresholds through early, targeted member engagement is the most durable protection against methodology a plan can’t predict.
How does the Elevance lawsuit affect Star Ratings?
Elevance sued CMS in July 2026 over how the agency applied its court-ordered Star Ratings recalculation following the Clover Health ruling, claiming roughly $115 million in lost bonus payments. Whatever the outcome, the litigation signals that ratings methodology has become financially material enough for plans to contest in court.
