New analysis of the 2027 Medicare Advantage Star Ratings Draft Technical Notes released with the Second Plan Preview shows a challenging outlook for health plans. Although more measure-level cut points increased than decreased, reward-factor thresholds fell at both the 65th and 85th percentiles.
Wakely’s new white paper, Cutting It Close: Initial Takeaways from 2027 Star Rating Changes, analyzes the 2027 Medicare Advantage Star Rating cut points and reward-factor thresholds released by the Centers for Medicare & Medicaid Services (CMS) in the September 8 Second Plan Preview.
The analysis shows a challenging dynamic for Medicare Advantage organizations: measure-level performance generally improved, but lower contract-level reward-factor thresholds may indicate lower Overall Star Ratings and reduced Quality Bonus Payment revenue in 2028.
DOWNLOAD REPORTKey findings:
This white paper examines the most important changes in the 2027 Star Ratings, including:
- Changes to reward-factor thresholds and what they signal about overall market performance
- The impact of market performance and CMS methodologies on cut points
- Which measures Medicare Advantage leaders should watch most closely
- Why higher cut points do not necessarily translate into higher Star Ratings
- The implications for 4-Star performance and 2028 Quality Bonus Payments
The analysis is based on CMS’s 2027 Medicare Advantage Star Rating Draft Technical Notes released with the Second Plan Preview on September 8, 2026. It includes a full review of measure-level cut points and a detailed appendix for readers who want to understand the methodology behind the changes.
Frequently Asked Questions
Did Medicare Advantage plan performance improve in 2027?
The increase in many measure-level cut points suggests continued improvement in underlying measure-level performance. However, plans may still receive lower Star Ratings if performance does not keep pace with rising cut points.
How did the 2027 reward-factor thresholds change?
Reward-factor mean thresholds declined at both the 65th and 85th percentiles. For ratings including improvement measures, the 65th percentile decreased from 3.649 to 3.545, while the 85th percentile decreased from 3.932 to 3.872.
What do the 2027 changes mean for 2028 Quality Bonus Payments?
The lower reward-factor thresholds and potential associated decline in contract-level Star Ratings could place downward pressure on 2028 Quality Bonus Payments. The financial impact will vary by contract.
Which measures changed the most?
HEDIS measures experienced broad cut point increases. Administrative measures saw substantial increases in many 2- and 3-Star cut points, while CAHPS measures were generally stable. Quality improvement measures generally experienced decreases.
What is the role of Tukey and the 5% guardrails?
Tukey removes certain outlier performance results before CMS calculates measure-level cut points. The 5% guardrails limit annual cut point movement for most measures, with some exceptions. Together, these methodologies continue to have the greatest impact on 2- and 3-Star cut points.
Who should read this analysis?
The white paper is intended for Medicare Advantage and Part D executives, Star Ratings leaders, quality improvement teams, actuarial professionals, finance leaders, and others evaluating the operational and financial implications of CMS Star Rating changes.
What source does the analysis use?
The analysis is based on CMS’s 2027 Medicare Advantage Star Rating Draft Technical Notes released in the Second Plan Preview on September 8, 2026, and represents an initial assessment of the draft 2027 changes.
What could the 2027 Star Rating changes mean for Medicare Advantage plans?
The 2027 results suggest that measure-level performance can improve while Overall Star Ratings decline. Cut points are rising in many measures, but these improvements may not be sufficient to achieve the same measure-level Star Rating.
This dynamic could place additional pressure on 2028 Quality Bonus Payments and increase the importance of targeted quality improvement, operational execution, measure-level forecasting, and financial scenario planning.
Who Should Read This White Paper?
This analysis is intended for Medicare Advantage and Part D executives, Star Ratings leaders, quality improvement teams, actuarial professionals, finance leaders, and others responsible for evaluating the operational and financial implications of CMS Star Rating methodology changes.
Download the white paper to understand what the 2027 Star Rating changes may mean for your plan’s performance, strategy, and 2028 revenue outlook.
