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The Medicare Advantage (MA) Star Ratings program was introduced in 2007 to assess the quality of MA plans based on performance metrics and help beneficiaries compare plan options. The Centers for Medicare & Medicaid Services evaluates plans on various measures and assigns them a Star Rating in half-point increments from 1 to 5, with 1 star being the lowest rating and 5 stars the highest.

Passage of the Affordable Care Act in 2010 officially tied plan ratings to payment in the form of quality bonus payments (QBPs), catalyzing program changes that sought to bring greater focus on quality through financial incentives. Plans that achieve higher Star Ratings receive higher payments, with the aim of incentivizing them to continuously improve their performance.

Throughout its existence, the Star Rating program, and the QBP program specifically, has been scrutinized for fairness in assessing and rewarding plans. Several organizations, such as the Medicare Payment Advisory Commission, the Congressional Budget Office, academic groups, and think tanks have proposed modifications to the Star Rating program.

This paper discusses four components of the Star Rating program that have been the subject of various proposals for policymakers to consider: cut point calculations and thresholds, measure selection and quantity, inclusion of Employer Group Waiver Plans, and the cost of the program. Within each proposal area, we present the prevailing justification for each change and how they would likely affect federal entities, payers, and members.

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Research was requested and funded by the Centene Corporation. Avalere Health retained full editorial control.