What Are Medicare Star Ratings?
The Centers for Medicare & Medicaid Services (CMS) Star Ratings system evaluates Medicare Advantage and Part D prescription drug plans on a scale of one to five stars. Ratings are based on a comprehensive set of quality and performance measures spanning clinical outcomes, member experience, complaint resolution, access to care, and plan administration.
How Ratings Are Calculated
CMS collects data from multiple sources — including HEDIS clinical measures, CAHPS member experience surveys, Health Outcomes Survey results, and administrative data — to score plans across approximately 45 individual measures. These scores are weighted and aggregated into an overall Star Rating that is published annually and used by consumers to compare plans during open enrollment.
Revenue and Competitive Impact
Star Ratings have significant financial implications. Plans rated four stars or above qualify for quality bonus payments from CMS, which can amount to substantial additional revenue. Higher-rated plans are also eligible for enhanced marketing and enrollment opportunities. For health plans, improving Star Ratings through better member engagement, care gap closure, and service quality is both a clinical imperative and a business necessity.