Closing the Gap as CMS Reconsiders the Star Ratings Timeline

1/13/2026

For Medicare Advantage (MA) leaders, the CMS Star Ratings system has recently become synonymous with financial volatility. Marketing and procurement executives at top-tier payers across the industry consistently indicate a troubling concern: the “cash out” issue.

Currently, the Star Ratings cycle operates on a nearly four-year look-back. As a result, a marketing leader might launch a highly successful incentive program today, but the plan won't realize the full Quality Bonus Payment (QBP) impact for several years. This delay creates a lag effect that makes it difficult for procurement and marketing teams to justify ROI in real-time. 

Further, when rewards are reduced, as many plans saw with recent methodology changes like the “Tukey outlier” deletion, the sudden revenue drop often hits years after the performance period. This creates a fiscal misalignment that then ripples through the entire organization. The result: Many health insurance companies are forced into defensive maneuvers — pausing critical acquisition marketing, delaying innovation projects, or even facing reductions in force (RIFs).

However, a potential shift in policy that could change this dynamic is apparently on the horizon. In the CY 2027 Proposed Rule released in November 2025, CMS signaled it is finally looking for ways to shorten the multi-year lag between measurement and payment.

The proposed solution: a faster feedback loop

CMS is now soliciting feedback on a modernized timeline. Although the transition won't happen overnight, the 2027 proposal includes several key steps that will move toward a faster schedule:

• Trimming administrative excess: CMS has proposed removing 12 administrative and process-heavy measures (such as certain call center metrics and appeal timeliness). The goal is to focus on health outcomes that are increasingly trackable via electronic data.
• Moving to “real-time” data: By shifting toward electronic clinical data systems (ECDS), CMS hopes to eventually cut 12 to 18 months from the reporting cycle. 
• A shift to outcome-driven rewards: The administration is doubling down on clinical care and member wellness. For payers, this means the path to a 4-star rating (and the associated bonus) will rely less on “checking boxes” and more on demonstrably improving member health.

Focus on 3 ‘health outcome’ levers

While we don’t yet know the final form of these regulations, the direction of the wind is clear: outcome-based performance is the new North Star. The focus must be on the very “health outcome” levers the administration is prioritizing.

To help bridge the gap between these upcoming requirements and their current operations, payers can collaborate with an end-to-end communications partner. By doing so, they can ensure they’re aligned with the new regulations and focal point, including: 

1. Close care gaps through precision communication: Helping plans promote nurse lines, at-home diagnostics, and wellness prompts that directly impact HEDIS and HOS outcome scores.
2. Modernize member incentives: Designing end-to-end reward and incentive programs that increase engagement in preventive screenings — the exact metrics that will carry more weight in a pared-back Star measure set.
3. Establish operational efficiencies in marketing: As plans face tighter margins, their procurement teams must find efficiencies in their member communications and acquisition spend, ensuring that every dollar spent is aligned with the highest-weighted Star categories.

Looking ahead: a strong offense

The proposed rule is a recognition that the current system is too slow for the fast-paced MA market. A shorter payment lag would allow plans to reinvest rewards back into member benefits and marketing much sooner, stabilizing the boom-and-bust cycles we've recently experienced.

The comment period for the 2027 Rule runs until 5 PM Eastern Time on January 26, 2026. In the meantime, the best defense is a strong offense: focusing on the clinical outcomes and member experiences that remain the bedrock of the program.

Cindy Thomas is Business Development Director, Healthcare at RRD. She is continuing to closely monitor the CMS Rule developments.

Previous Article Medicare Part D Engagement: A 3-Step Guide for Health Plan Leaders Next Article Franchisors: 5 Red Flags in Your Franchise Marketing Plan