The Centers for Medicare and Medicaid Services (CMS) rates Medicare Advantage plans and prescription drug plans separately on a scale of one to five stars, with five representing the highest quality. The Star Rating for Medicare Advantage plans is an overall measure of the plan's quality, and is a cumulative indicator of: quality of care, access to care, beneficiary satisfaction, customer service, and responsiveness to member needs. The intent of the program is to tie quality of care to financial reimbursements, whereby rewarding high performing plans and forcing low performing plans to exit the market.
The quality scores for Medicare Advantage plans are based on over 50 distinct individual measures that are derived from four sources:
- Healthcare Effectiveness Data and Information Set (HEDIS®)
- Consumer Assessment of Healthcare Providers and Systems (CAHPS®) program
- Centers for Medicare and Medicaid Service (CMS)
- Health Outcomes Survey (HOS)
Scope: Medicare Advantage Plans (MA-PD, MA only, PDP)
Scoring: The 2021 overall star rating is a composite measure constructed from 36 measures for Part C and from 15 measures for Part D.
Payout: Up to 5% Performance Bonus for Medicare Advantage Plans earning 4-5 stars.
Plans earning 5 stars receive a special icon on CMS's website and are eligible for year-round open enrollment. Plans earning < 3 stars in successive years receive a not-so-special icon on CMS's website and have restrictions on new membership. Health Plan Rates are posted on www.medicare.gov.