The Centers for Medicare and Medicaid Services has announced enhanced oversight of Medicare Advantage plans following an investigation that found widespread manipulation of star ratings used to determine bonus payments. Twelve plans are facing penalties.
The investigation revealed that some insurers were selectively disenrolling sicker patients, gaming health risk assessments, and manipulating customer satisfaction surveys to inflate their star ratings. Higher ratings translate directly to billions in bonus payments from CMS.
Under new rules effective in 2027, CMS will conduct independent audits of star rating inputs, require standardized patient satisfaction surveys administered by third parties, and implement penalties including plan termination for repeated manipulation.
The findings are politically significant as Medicare Advantage now covers over 50% of all Medicare beneficiaries. Both parties have called for reforms, though they differ on approach — Democrats favor stricter regulation while Republicans prefer market-based accountability measures.
Beneficiaries enrolled in affected plans will not lose coverage, but may see changes to plan benefits and provider networks. CMS is encouraging beneficiaries to review their options during the next open enrollment period.
