Goodsurance

Medicare Advantage

Court-Ordered Star Rating Recalculation Will Add About 600 Million Dollars to 2027 Medicare Advantage Bonus Payments, KFF Finds

An August 12 KFF update to its quality bonus analysis finds that CMS's voluntary decision to extend a court-mandated star rating fix to all Medicare Advantage plans will push 2027 insurer bonus payments roughly 600 million dollars higher than they would otherwise have been.

By the Goodsurance editorial teamAugust 17, 2026

KFF updated its annual analysis of Medicare Advantage quality bonus payments on August 12, 2026, adding new estimates of the financial effect of a court-driven star rating recalculation on what the federal government will pay insurers in 2027.

Earlier in 2026, a federal court found that CMS used impermissible measures when calculating star ratings for Clover Health, a smaller insurer. CMS initially recalculated only Clover Health's ratings. It then voluntarily extended the same recalculation to all Medicare Advantage plans, assigning each plan the higher of its original or recalculated score. That expansion raised 47 contracts above the four-star threshold that qualifies plans for bonus payments under the quality bonus program.

Court-driven star rating re-scores will add about 600 million dollars in Medicare Advantage bonus payments in 2027.

KFF estimates that the recalculation will add approximately 600 million dollars to 2027 Medicare Advantage quality bonus payments compared with what those payments would have been without the revision. UnitedHealth Group receives the largest share of the additional payments, followed by Clover Health, Blue Cross and Blue Shield of Alabama, Humana, and CVS Health Corporation.

The finding adds to a longer-term pattern the report tracks: total bonus spending keeps rising while the share of plans earning high scores has declined. In 2026, just 209 Medicare Advantage contracts qualified at four stars or above, the lowest count since 2018, down from 261 in 2025. Despite fewer plans qualifying, total bonus spending in 2026 is projected to exceed 13 billion dollars.

CMS finalized changes to the star ratings system earlier in 2026 that removed certain measures and are projected to increase Medicare Advantage payments by approximately 18.6 billion dollars over ten years, a change that drew criticism from researchers who argued the adjustment rewards market scale rather than measurable care quality.

In plain words

Medicare pays Medicare Advantage insurance companies extra money when their plans earn high quality scores. These scores are called star ratings. A court said CMS calculated these scores incorrectly for one company. CMS then re-scored every plan and gave each one the higher of the old score or the new one. A research group called KFF found that this re-scoring will add about 600 million dollars in bonus payments in 2027. UnitedHealth Group gets the biggest share of that extra money. At the same time, fewer plans are earning the high scores needed to get a bonus at all.

Understand the basics first

Source: KFF
Read at the source →

More news

Other stories on what is moving in Medicare.

Medicare Advantage

Medicare Plan Finder Opens for 2027 Shopping Today, With Star Ratings Following Around October 8

CMS updated Medicare.gov with 2027 plan data as of October 1 and will add the official star ratings on or around October 8, one week before the annual enrollment period opens on October 15.

October 1, 2026

Medicare Advantage

CMS Administrator Calls Medicare Advantage Oversight a Top Priority, Describing the Program as Vulnerable to Abuse

Speaking to an industry audience, Dr. Mehmet Oz said the program has let patients down financially and clinically. His remarks came alongside several administration decisions that have benefited plans.

September 26, 2026

Medicare Advantage

The 2026 Count of Hospital Systems Dropping Medicare Advantage Contracts Reaches at Least 30, With October 1 Exits Days Before Open Enrollment

A running tracker updated September 22 shows the year's hospital-insurer separations still accumulating, with multiple contract exits taking effect October 1, just two weeks before the annual enrollment window opens.

September 24, 2026

Medicare Advantage

Federal Watchdog Found the Three Largest Medicare Advantage Plans Denied Long-Term Hospital and Rehab Admissions at the Highest Rates

An OIG data brief from June 2026 found those plans also used outside contractors to issue denials, and many of those contractor decisions were later reversed by the plan itself on appeal.

September 22, 2026

Medicare Advantage

Federal Watchdog Will Examine How Medicare Advantage Plans Require Prior Authorization for Doctor-Administered Drugs

The Office of Inspector General added an evaluation of Medicare Advantage prior authorization for Part B drugs to its work plan, a category covering infused and injected treatments given in physician offices.

September 17, 2026

Medicare Advantage

About Half of the Performance Thresholds Used to Score Medicare Advantage Plans for 2027 Star Ratings Have Risen, Preliminary Data Shows

CMS shared a second round of preliminary 2027 star rating data with Medicare Advantage plans this month, and roughly half of the scoring thresholds are harder to meet than in prior years. Official star ratings are due in early October, just before open enrollment begins October 15.

September 12, 2026