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Do MA Star Ratings incentivize consistent quality performance?

Data shows MA plans move in and out of MA Star Ratings thresholds for lucrative bonus payments, suggesting a potential flaw in the rating system.

Sara Heath
By
Published: 27 Oct 2025

A new study in JAMA Health Forum calls into question the incentives in the Medicare Advantage Star Ratings, stating that crossing the coveted four-star threshold for quality bonus payments paradoxically can predict poor ratings for Medicare Advantage plans in the future.

Indeed, once MA plans achieve a four-star rating, they actually become more likely to slip below that threshold the following plan year before potentially crossing over it again. This might indicate a system built to incentivize volatile performance, as plans earn more in bonus payments each time they cross the four-star threshold.

These findings come soon after the Centers for Medicare and Medicaid Services (CMS) released the 2026 Medicare Advantage Star Ratings, showing a slight uptick in weighted average stars from 3.96 to 3.98 for the 2026 plan year. Despite what some experts considered an unexpected overall MA plan improvement, there were some losers in this year's Star Ratings release as they face financial pressure after losing quality bonus payments.

4-Star ratings a Holy Grail for MA plans

In the Medicare Advantage world, getting at least a four-star rating from CMS is considered a Holy Grail.

These higher ratings are tied to a quality bonus payment -- in 2024, the feds paid out more than $11.8 billion in quality bonus payments -- and they can also shape enrollment. The inverse is true, too, according to the researchers. When MA plans get lower star ratings, their enrollment rates suffer significantly.

"Because true quality is expected to remain relatively stable, volatility-driven bonuses may indicate misaligned incentives," the researchers posited.

MA plans can't sustain four-star performance

The researchers analyzed star-rating performance for 552 MA contracts over eight years, finding that it wasn't uncommon for plans to achieve the coveted four-star rating. About three-quarters of all contracts achieved four or more stars at least once during the study period, the report authors said.

Contracts that had ever gotten more than four stars -- and therefore ever qualified for quality bonus payments -- were bonus-eligible for an average of a little more than half (58%) of the study period. All said, MA plans crossed above or below the four-star threshold an average of 1.6 times.

But that doesn't mean MA plans saw meaningful dips and improvements in their performance from one year to the next. Rather, they might oscillate between a high three-star rating and a low four-star rating. For example, in year 1, a plan might get 3.9 stars and 4.1 in the following year.

That trend bears out in the data. MA plans that receive four stars one year can expect to dip back below four stars during the following years. Four-star plans become less likely to get four stars consistently, to get five stars at all or to get five stars consistently.

Because CMS rewards the crossing of the four-star threshold more than it rewards plans that consistently stay in that range, MA plans might be incentivized to cross in and out of the four-star rating range.

"Threshold crossings were associated with not only ever receiving a bonus, but also with a higher share of bonus-eligible years, suggesting that episodic gains may repeatedly cross key thresholds," the researchers said. "These movements may reflect actual changes in quality or instability in management, reporting or patient experience, but their association with bonus eligibility raises concerns about whether incentives support sustained performance improvement."

In other words, the CMS Medicare Advantage Star Ratings could have a flawed methodology that warrants a closer look.

"These findings raise concerns about whether star ratings capture sustained excellence or disproportionately reward performance volatility that may not reflect true quality," they concluded.

Sara Heath has reported news related to patient engagement and health equity since 2015.

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