By EMMANUEL ANIMASHAUN
The Centers for Medicare & Medicaid Services (CMS) Star Scores system represents a cornerstone of high quality evaluation in Medicare Benefit (MA), designed to empower customers with clear data whereas rewarding plans that ship superior care. But current developments, notably the seismic downgrading of Humana’s ratings reveal an unintended consequence: a system created to measure and incentivize high quality could now be actively undermining it.
The Humana Case: Symptom of a Broader Drawback
In 2025, Humana’s Medicare Benefit star scores collapsed, with solely 25% of members remaining in four-star or larger plans, down from 94%. This wasn’t because of declining medical efficiency however resulted from CMS’s “Tukey outlier deletion” statistical adjustment applied with minimal business session. The change raised efficiency thresholds, inflicting Humana to lose billions in High quality Bonus Funds and $4 billion in market worth. Humana’s legal challenge, arguing that CMS violated the Administrative Process Act by way of non-transparent processes, was denied. Different insurers together with UnitedHealthcare and Centene additionally share concerns about methodological rigidity and that the score system could have diverged from its goal of bettering affected person care.
Maybe extra hanging are the instances of Elevance and SCAN, which additional illustrate how inflexible metrics can distort assessments of precise care high quality. In March 2023, each insurers had been penalized after allegedly missing a single CMS “secret shopper” phone call, a name they declare was by no means obtained. The downgrade value them tens of thousands and thousands in High quality Bonus Funds and triggered authorized challenges. As SCAN’s CEO wrote, the sanction got here regardless of sturdy medical efficiency and affected person outcomes. A federal choose later dominated in favor of SCAN in June 2024, prompting CMS to recalculate the Star Ratings throughout all Medicare Benefit plans. This episode underscores a key concern: when measurement hinges on unverifiable administrative moments, it could find yourself punishing moderately than selling high quality.
How High quality Measurement Can Undermine Precise High quality
The Star Ratings system aggregates over 40 metrics throughout preventive care, remedy adherence, member expertise, and customer support. Nevertheless, it disproportionately rewards course of compliance and documentation over well being outcomes. Plans can excel by optimizing coding, maximizing documentation, or boosting survey participation with out delivering higher care. This misalignment diverts sources from real well being improvements. Research from an NBER working paper even discovered that better-rated plans aren’t statistically higher at preserving sufferers alive than lower-rated ones, elevating basic questions on whether or not the system measures what actually issues for affected person well being.
Much more regarding is that MA contracts with larger proportions of dually eligible, disabled, or racially numerous members constantly rating decrease, not as a result of they supply inferior care, however as a result of the scoring system inadequately adjusts for social danger components. A JAMA Health Forum examine highlighted how plans serving extra Black beneficiaries had decrease star scores even when controlling for different components. This structural bias successfully penalizes plans doing the difficult work of serving populations with advanced wants, making a perverse disincentive to deal with well being fairness.
The uncertainty from frequent modifications in star score computation may additionally pose extreme implications for strategic planning for corporations. When an organization like Humana loses billions because of a technical recalibration, it sends a troubling message: long-term investments in high quality enchancment could not yield returns if measurement methodologies change unpredictably. This volatility makes strategic planning tough and discourages sustained funding in high quality initiatives.
The Actual-World Impression on Sufferers
These methodological shortcomings don’t simply have an effect on well being plans’ backside strains; they’ve tangible penalties for Medicare beneficiaries. When plans lose High quality Bonus Funds (QBPs), they usually should reduce invaluable supplemental advantages like transportation help, dental protection, or in-home assist companies, or enhance plan premiums, as Avalere Health suggests. McKinsey estimates CMS score modifications could cost plans over $800 million in bonuses, lowering sources out there for such advantages.
Moreover, score fluctuations can set off pointless plan switching as members, confused about whether or not decrease stars point out poorer high quality, change plans unnecessarily. These transitions usually disrupt established supplier relationships and care administration packages, doubtlessly harming medical outcomes. Research shows that disruptions in supplier relationships result in lowered major care utilization, elevated emergency division visits, and better hospitalization charges, notably for weak populations with continual situations.
Moreover, plans could hesitate to pilot novel approaches for managing high-cost, high-risk populations if demographic realities imply they might nonetheless face score penalties regardless of medical success. This chilling impact on innovation in the end hurts the beneficiaries who may most profit from artistic care fashions, reinforcing a system that rewards standardization over significant enhancements in care supply for advanced populations.
A Framework for Significant Reform
To revive the Star Scores system’s alignment with bettering high quality take care of Medicare beneficiaries, 4 important reforms are wanted:
1. Stabilize Methodology and Improve Transparency: CMS should introduce methodological modifications solely after sturdy public discover, significant stakeholder engagement, and sufficient implementation timelines. Transparency in measure growth, weighting, and adjustment is prime to sustaining system belief and enabling plans to align their high quality methods accordingly.
2. Implement Complete Social Threat Adjustment: The present Categorical Adjustment Index has shown modest impact. A fairer analysis system should comprehensively account for earnings disparities, incapacity standing, race, language obstacles, and different social components influencing care supply and outcomes. This adjustment acknowledges the extra sources required to attain equal outcomes for populations with advanced social wants.
3. Reorient Towards Significant Outcomes: Emphasis ought to shift towards measurable well being enhancements like lowered hospitalizations and higher continual illness administration, moderately than focusing closely on course of measures or survey outcomes that will not correlate with precise well being advantages.
4. Reward Innovation and Well being Fairness Efforts: CMS ought to acknowledge plans making significant investments in addressing well being disparities and creating modern care fashions for underserved communities.
The Humana case, alongside the troubling SCAN and Elevance cellphone name incident, represents a essential inflection level for Medicare Benefit high quality measurement. When a single missed name can set off devastating monetary penalties regardless of sturdy medical efficiency, and when plans serving thousands and thousands of beneficiaries can lose billions in worth in a single day because of methodological modifications moderately than precise care deficiencies, the system has clearly overpassed its goal.
By implementing the proposed reforms, CMS can remodel Star Scores from a compliance train into a real catalyst for higher affected person care. The final word measure of success shouldn’t be statistical perfection or adherence to inflexible administrative protocols however whether or not the system helps weak seniors stay more healthy, longer lives whereas lowering disparities in care high quality. Solely then will Star Scores fulfill their meant position: guiding beneficiaries to really superior plans whereas rewarding insurers who excel at bettering well being, not simply compliance.
Emmanuel is a doctor from Nigeria, and a second-year MPH/MBA candidate on the Johns Hopkins Bloomberg Faculty of Public Well being and Carey Enterprise Faculty. His work focuses on well being financing, supply reform, and strategic approaches to well being methods transformation.
