Since its launch nearly a decade ago, the CMS Star Rating system has served as a critical benchmark for evaluating healthcare quality across U.S. hospitals and Medicare Advantage (MA) plans. Designed to simplify complex quality metrics into a consumer-friendly 1-to-5 star scale, the system has long helped patients, providers, and payers make informed decisions.
Recent data from 2025 shows a clear decline in top-tier performance:
- The average Medicare Advantage rating dropped from 4.07 in 2024 to 3.92 in 2025.
- Only 7 plans earned 5 stars in 2025, a steep fall from 38 last year.
- In the hospital setting, just 15% of hospitals earned a 5-star rating, while 29% received 4 stars, per CMS’s 2024 public data.
These ratings carry weight: 4-star or higher MA plans qualify for bonus payments worth 5% in additional revenue, often used to improve patient benefits and provider incentives.
Moreover, hospitals with higher star ratings are linked to 15% lower readmission rates and 10% higher patient satisfaction scores, underscoring their real-world impact.
The dip in ratings is largely attributed to changes in CMS methodology, including the introduction of the Tukey Outlier Deletion method, which removes statistical outliers and raises performance cut points. As a result, maintaining or improving ratings has become significantly harder, pushing many organizations to reconsider how they measure and deliver quality care.
However, as healthcare advances at the rate of digital innovation in 2025, more and more doctors, administrators, and patients are posing the pertinent query:
Are CMS Star Ratings still relevant, or are they becoming a relic of a simpler healthcare era?
The solution is multifaceted. What began as a condensed quality snapshot is now at a turning point, juggling the needs of real-time, equity-driven, AI-supported care with legacy structures. This article explores the reasons behind the CMS Star Rating system's reliability and resilience, as well as how healthcare organisations may effectively manage the shift.
What Are CMS Star Ratings, and Why Do They Matter?
The Centers for Medicare & Medicaid Services (CMS) Star Ratings provide a composite score between 1 and 5 stars, summarizing hospital or plan performance across categories like:
- Mortality and readmissions
- Patient experience (via HCAHPS surveys)
- Safety of care
- Timeliness and effectiveness
- (New in 2025) Electronic clinical quality measures (eCQMs)
The Criticisms: Is It Still Fit to Use
The CMS Star Ratings struggle to capture the following:
- Digital health maturity: There’s no score for how well a provider uses telehealth, remote monitoring, or AI triage.
- Equity and SDOH: Social determinants of health and equity measures remain underrepresented.
- Real-time performance: The data is often 12–18 months old, which doesn’t reflect today’s innovations or improvements.
Role of Modality Global Advisors
Although the Star Rating system offers a useful summary, analytics solutions such as Modality Global Advisors more than make up for its shortcomings in terms of speed and depth.
Here’s how MGA augments what CMS starts:
1. Real-Time Performance Monitoring
MGA can assist in tracking real-time parameters, including readmission risk and length of stay (LOS), even while CMS data is retroactive.
2. Custom Quality Dashboards
Not every hospital needs the same metrics. MGA can aid in tailoring performance dashboards by service line, like perioperative care, cardiovascular surgery, or post-merger system performance, offering actionable insights at the specialty level.
3. Post-Merger Alignment
In a landscape where M&A activity is surging, MGA enables newly merged systems to unify reporting, compare legacy facilities, and rebuild toward a shared quality standard beyond the star score.
4. Digital Quality Tracking
Where CMS may overlook telehealth engagement or chatbot responsiveness, MGA logs these digital touchpoints, giving a more complete picture of modern patient experience.
Final Takeaway
In 2025, CMS Star Ratings remain the gold standard in transition. They still offer meaningful, comparable data, but they can’t tell the whole story of what high-quality, human-centered, digitally-enabled care looks like today.
To stay ahead, healthcare organizations must go beyond the stars, investing in real-time analytics, tailored reporting, and smarter clinical operations.
Sources: CMS Data