As CMS finalizes payment and quality policy changes for Contract Year (CY) 2027, Medicare Advantage (MA) organizations face a clear reality: risk adjustment alone will no longer ensure performance or revenue stability. With functionally flat payment increases and heightened scrutiny on risk capture, Star Ratings have become the primary lever plans can actively control.
The message from CMS is unmistakable — plans must do more with essentially the same dollars, and quality performance will play a central role in maintaining financial viability.
Flat funding but higher expectations
CMS’s CY 2027 Advance Notice signals a net MA payment increase of approximately 0.09% — effectively flat funding. While CMS estimates a potential ~2.5% payment upside, that increase is risk-dependent, contingent on compliant, encounter-based documentation and coding. And even then, it’s not guaranteed.
At the same time, CMS is actively rebalancing payments away from aggressive or low-integrity risk capture and toward documented care and measurable quality performance.
In this environment, Star Ratings Quality Bonus Payments are no longer optional. They are increasingly essential to:
- Maintain revenue
- Offset constrained risk adjustment payments
- Stabilize plan performance amid regulatory volatility
Priority measure changes plans cannot ignore
HEDIS & Administrative Measures
Colorectal Cancer Screening
Included in quality improvement scoring for MY2026.
This raises the bar for gap closure performance, especially now that the measure counts toward the Quality Improvement measure calculation, increasing its weight. Although cut points dropped ~5% for the 2026 Star Rating due to the removal of hybrid, history shows plans will refocus next year, pushing cut points back up. Plans should act now to stay competitive.
FL/TTY measures
Proposed removal beginning MY2026.
While these measures are slated for removal, plans should assess downstream operational impacts and redeploy resources toward higher-impact clinical and experience measures.
HOS measures
HOS measures related to maintaining or improving physical and mental health now carry 3x weighting, making them some of the most influential measures in the Star program.
These measures are longitudinal by design, meaning performance reflects interventions implemented well before survey fielding. With the next HOS survey beginning in June, plans must start interventions now to see measurable improvement in upcoming Star years. Waiting until later in the year virtually guarantees missed opportunity.
Part D Measures: Medication adherence and risk adjustment changes
Medication adherence measures have been reduced to 1x weight due to significant methodological changes. However, lower weighting does not mean lower importance.
Plans should closely review updated risk adjustment methodologies related to adherence and evaluate whether historical performance assumptions remain valid under the new methodology.
Waiting is not a strategy
Plans that delay action until final rules are released will be reacting too late. Instead, organizations should:
- Use the Advance Notice and Proposed Rule to scenario-plan overall Star Rating impact
- Begin planning interventions for future measures, even when timelines are uncertain
If CMS has signaled that a measure may become part of Stars in future years, plans should proactively incorporate it into:
- Quality workplans
- Value-based care agreements
- Data-sharing templates
- Provider and member engagement strategies
Additionally, plans should establish robust intervention strategies across all lines of business. Many clinical Star measures apply across Medicare, Medicaid, ACA and Commercial populations. High performance across all lines of business can reduce medical loss ratio (MLR) spend while improving Star outcomes.
What plans should be doing now
To remain competitive, plans should act immediately.
1. Reset Stars governance plans
- Align governance structures to priority measures
- Clarify ownership, escalation paths and decision authority
- Incorporate known and highly likely future CMS changes
2. Launch interventions early
- Expand or initiate interventions now
- Avoid “wait and see” approaches tied to final rule release
3. Use data strategically
- Leverage historical gap closure trends
- Identify known operational friction points
- Focus on measures with sustained underperformance or high volatility
How Healthmine can help
Healthmine works with Medicare Advantage plans to move from reactive compliance to proactive performance. Through targeted outreach and intervention strategies, Healthmine enables plans to improve gap closure on priority measures. Our digital quality improvement solutions drive sustained behavior change, support longitudinal outcomes, and create measurable impact across all lines of business.
The window for strategic adjustment is narrowing. Plans that act now will be positioned to absorb regulatory change. Plans that wait will be forced to react — often at a cost.
Contact us to learn more.
Summary
- Flat funding raises the stakes for quality. With a projected ~0.09% net payment increase for CY 2027 and heightened scrutiny on risk adjustment, Medicare Advantage plans can no longer rely on coding performance alone. Star Ratings have become the most controllable and critical lever for protecting revenue and financial stability.
- Key measure changes demand early action. Updates to Colorectal Cancer Screening, removal of FL/TTY measures, and the 3x weighting of HOS outcomes significantly shift performance priorities. Plans must act now — especially on longitudinal measures like HOS — to influence future Star years.
- Methodology changes require recalibration. Even with reduced weighting, Part D medication adherence and updated risk adjustment methodologies may materially impact performance assumptions. Plans should scenario-plan and reassess historical strategies under the new rules.
- Waiting is not a strategy. Organizations should reset governance, launch interventions early, and strategically deploy data across all lines of business to improve outcomes, reduce MLR pressure, and remain competitive amid ongoing CMS policy shifts.
Mallory has over 15 years of leadership, quality and clinical experience delivering 5-Star quality care for senior populations in managed care plans and assisted living settings. She previously served as the Director of Quality Health Integration at Network Health Plan where she oversaw all regulatory programs and led the plan to achieve 5-Star performance. Mallory is a Registered Nurse and earned her BSN from the University of Wisconsin-Green Bay.
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