The CY 2027 Final Rule and Rate Announcement reflect evolving Centers for Medicare & Medicaid Services (CMS) priorities in how Medicare Advantage plans may be evaluated, placing greater emphasis on outcomes, member experience, and data integrity across both risk adjustment and Star Ratings programs. Together, these changes signal a more integrated future, where risk, quality, and engagement data must work in concert to drive sustainable performance.
For health care leaders, the takeaway is clear: Success will likely depend on earlier insight, stronger data foundations, and coordinated strategies that connect risk and quality efforts into a unified operating model.
Risk adjustment accountability and impact
Risk adjustment programs are facing increased scrutiny as CMS, along with the Office of Inspector General (OIG) and Department of Justice (DOJ), have signaled increased focus on documentation accuracy, encounter linkage, and audit defensibility.
Recent regulatory updates reinforce this direction. While the Rate Announcement introduced positive payment adjustments and delays to model changes, it also upheld policies such as the exclusion of diagnoses from unlinked chart reviews—placing pressure on organizations to connect risk data to the encounter and care delivered.
At the same time, expanded Risk Adjustment Data Validation (RADV) audit activity and evolving enforcement priorities are increasing the potential for financial exposure and operational risk. These changes are driving a fundamental shift: organizations would benefit from embedding compliance into daily workflows rather than added at the end of the cycle.
To adapt, leading organizations are strengthening program foundations in three critical areas:
- Data integrity and transparency: Clean, auditable encounter data is essential to support more auditable and supportable submissions and regulatory alignment.
- Dedicated resources: Integrate compliance solutions and capabilities into daily workflows and streamline ability to capture accurate and consistent data.
- Integrated technology and governance: Advanced analytics and automation can improve efficiency, but only when paired with strong oversight and transparent processes.
- Operational discipline: Programs must proactively monitor performance and intervene earlier to prevent errors and avoid downstream rework.
Equally important is a shift “left” in the risk lifecycle, moving closer to the point of care. Prospective and concurrent strategies allow organizations to identify and address gaps before or during encounters, with the goal of improving both accuracy and clinical relevance.
Star Ratings shift toward outcomes and experience
In parallel, the Star Ratings program is undergoing a structural transformation. The 2027 Final Rule accelerates the removal of operational measures that historically showed little variation across plans, increasing the weight and impact of remaining measures tied to outcomes and member experience.
This shift has two important implications. First, with fewer measures contributing to ratings, performance variability is amplified, leaving plans with less margin for error. Second, categories such as HEDIS® and pharmacy measures are becoming more influential, reinforcing the need for consistent, high-quality clinical performance.
Key changes include the introduction of risk-adjusted medication adherence measures and a new depression screening and follow-up measure, reflecting CMS’ growing focus on behavioral health and longitudinal care outcomes. Additionally, CMS confirmed it will not implement the Health Equity Index or EHO4all reward, but plans to continue to emphasize broad improvement in outcomes and member experience.
As the program evolves, success may increasingly depend less on end-of-year pushes and more on embedding quality performance into everyday operations. Plans must build capabilities to distinguish data gaps from care gaps, improve digital readiness, and maintain continuous performance management throughout the year.
Integration becomes a strategic imperative
Perhaps the most important takeaway across both programs is the need for integration. Connecting risk adjustment and quality data can unlock greater value and impact on outcomes and member experience.
Medication adherence offers a clear example of this convergence. Members who are non-adherent to chronic condition treatments are often the same individuals whose conditions may be under-documented from a risk perspective. Addressing these gaps through coordinated outreach and shared data can simultaneously improve risk capture and Star Ratings performance.
Aligning teams, capabilities, and workflows enables more effective interventions, better care coordination, and improved overall performance across programs.
Five key actions to consider
To respond effectively to these changes, health plans should consider the following suggested priorities:
- Embed compliance into operations: Integrate audit readiness, documentation integrity, and encounter linkage into daily workflows rather than relying on retrospective fixes.
- Invest in data integration and transparency: Assess available risk and quality data to support earlier insights and coordinated interventions.
- Shift work effort earlier in the lifecycle: Expand prospective and concurrent strategies to address gaps at or before the point of care.
- Recalibrate Star Ratings strategies: Model the impact of measure changes and focus on outcomes-driven performance across clinical and member experience domains.
- Align risk, quality, and engagement programs: Break down silos to deliver a coordinated, member-centric approach that improves both financial performance and care outcomes.
As the rapid pace of change and regulatory scrutiny continue, Medicare Advantage organizations that embrace integration, strengthen data foundations, and act earlier in the care continuum will be best positioned to succeed in a more outcomes-driven environment.
About the author
Overseeing Cotiviti’s Risk Adjustment and Quality and Stars solutions, Branka Sustic provides leadership in product and business development, client program management, and strategy to assist health plans in meeting their quality goals, optimization of revenue, and risk mitigation. A leader with more than 20 years of health care experience, she is known for creating and establishing operational and support plans leading to increased client satisfaction and performance.