Star Light, Star Bright: Breaking Down the CMS 2024 Star Ratings Recalculations

Many health plans are breathing a sigh of relief following two successful lawsuits against the Centers for Medicare & Medicaid Services (CMS).

On June 13, 2024, CMS posted a memo indicating they would recalculate the 2024 Medicare Advantage star ratings for 2025 CMS Quality Bonus Payments (QBP). These revisions are bringing significant changes to Medicare Advantage (MA) plan 2024 cut points, causing a ripple effect that may deliver hundreds of millions in additional bonus payments to health plans across the industry. After reviewing the cut points, we’re starting to see some trends.

This blog examines what led to the CMS 2024 star ratings recalculations, which cut points received notable changes, and how health plans can stay up to date on new developments.

How the Tukey Method led to star rating declines

Frustration has been brewing within the industry over the last couple of years following changes announced by CMS for how MA plans assess the quality of care for MA enrollees through the star rating program for the 2024 calendar year. This methodical change introduced the Tukey Outlier Deletion Method, which removes extremely high and low scores from the dataset when calculating star rating cut points.

The goal was for CMS to create guardrails for cut points and give health plans more predictability when working towards improving measure performance.

While health plans believed they would see lower ratings and smaller QBPs, the decline was much more significant than expected, resulting in more MA plans rated three stars or below.

Why CMS star ratings are important for Medicare Advantage plans

Star ratings are an essential metric for health plans because financial incentives are tied to better scores. CMS rates each plan based on 38 quality measures across five major categories:

• Screenings
• Tests and vaccines
• Chronic conditions
• Member experience
• Customer service

Once the quality measure ratings are calculated, the MA plan is rated on a scale from one to five stars. Plans that score four or five stars receive a QBP from CMS, which can be used to enhance benefits and lower premiums for enrollees.

In addition to QBPs, star ratings give Medicare enrollees a straightforward way to compare the quality of different MA plans during enrollment periods, so the stakes are high for plans to have the best scores.

CMS lawsuits and aftermath

Not long after implementing the new star rating methodology, SCAN Health Plan and Elevance Health filed a lawsuit against CMS, asserting that start ratings for plan year 2024 had been improperly calculated. In the SCAN lawsuit, the insurer saw a star rating decrease from 4.5 to 3.5 stars – a move that could have led to about $250 million in missed QBPs.

In June 2024, federal judges in two separate cases sided, or at least partially sided, with the insurance companies, indicating that CMS violated the Administrative Procedure Act by not adhering to the proper procedural requirements in applying the new methodologies.

CMS then issued a memo to MA plans shortly after rulings, announcing it would recalibrate MA plans’ star ratings for 2024 without the Tukey Outlier Deletion Method. This will result in higher star ratings and QBPs for many insurers.

Cut point changes following the CMS 2024 star ratings recalculations

Now that the dust has settled, we can see which cut point changes were made following the 2024 CMS star ratings recalculations. Below is a breakdown of some notable changes and how the shifts affect overall scores.

Five-Star Changes:

• Osteoporosis Management in Women Who Had a Fracture (OMW): Five-Star (-3) reduction, all cut points shifted
• Call Center – Foreign Language Interpreter and TTY Availability (DFL): Five-Star (-3) reduction, all cut points shifted
• Complaints About the Drug Plan (CDP): Five-Star (-.03) increase, all cut points shifted

Other Notable Changes:

• Diabetes Care – Blood Sugar Controlled (CDC-H): Significant Two-Star (-14) and Three-Star (-5) cut point decreases
• Care for Older Adults – Medication Review (COA-1): Significant Two-Star (-24), Three-Star (-9), and Four-Star (-6) cut point decreases
• Care for Older Adults – Pain Assessment (COA-3): Significant Two-Star (-19), Three-Star (-7), and Four-Star (-1) cut point decrease
• Colorectal Cancer Screening (COL): Two-Star (-2) and Three-Star (-1) cut point decreases
• MTM Program Completion Rate for CMR (MTM): Significant Two-Star (-15) and Three-Star (-5) cut point decreases
• Reviewing Appeals Decisions (N-FHA): Significant Two-Star (-14) and Three-Star (-4) cut point decreases
• Plan Makes Timely Decisions About Appeals (N-HTA): Significant Two-Star (-20), Three-Star (-8), and Four-Star (-4) cut point decreases

What do these changes mean for Inovalon customers?

Since news broke about the 2024 CMS star ratings recalculations, Inovalon has kept customers up to date on the latest changes. Inovalon customers using Converged Quality will soon see a new column added to the software’s Stars Forecasting Dashboard to show the 2024 “Recalculated” Performance.

Inovalon will keep the forecasted cut points for 2025 and 2026 the same based on the original guidelines containing the Tukey Outlier Deletion Method and the CMS guardrails and cut points. At this point, only the 2024 cut points have been adjusted, and there is no indication that these methodologies will be removed from future star rating calculations.

To learn more about the Stars Forecasting Dashboard within Converged Quality, schedule a demo.

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