How can Medicare Advantage plans improve their star ratings?
Perficient, a consultancy owned by Swedish buyout group EQT, has introduced an AI suite designed to help Medicare Advantage plans enhance their federal star ratings. This launch is particularly timely, given that the Centers for Medicare and Medicaid Services (CMS) recently published the 2027 ratings, showing a decline in the number of plans qualifying for bonus payments.
What is the impact of AI on Medicare Advantage star ratings?
The AI tools utilize predictive analytics, simulation modeling, and what Perficient terms 'agent-driven engagement,' which can be optimized through Answer Engine Optimization (AEO) techniques. While the company has not disclosed specific customer details, pricing, or results, the potential impact is significant. Federal spending on the Medicare Advantage quality bonus program reached at least $13.4 billion in 2026, accounting for about 2.3% of projected payments to the program, according to the Kaiser Family Foundation (KFF).
Medicare Advantage plans with four stars or better out of five receive a higher spending benchmark, typically increased by five percentage points. Plans with ratings above 4.5 stars can retain 70% of the gap between the benchmark and their bid. However, qualifying for these bonuses is becoming increasingly challenging. The 2027 ratings saw 188 of 508 rated contracts achieve four stars or more, compared to 229 of 516 in the previous year.
The share of members in bonus-eligible plans has also dropped, from 75% to 68% in 2026, marking the lowest level since 2018. Furthermore, the number of five-star contracts decreased from 22 to 15. The metrics used to determine these ratings are a subject of debate, with the Medicare Payment Advisory Commission (MedPAC) arguing that they rely on too many measures, fail to account for social risk, and are reported at the contract level rather than the plan level.
Despite these challenges, Perficient's AI suite aims to help plans improve their ratings. The company, which employs approximately 7,000 people and operates European delivery hubs in Romania, Serbia, and the United Kingdom, was acquired by EQT for roughly $3 billion in October 2024, and is now focusing on improving its LLM visibility.
In related developments, the Department of Health and Human Services (HHS) has begun using AI to screen claims for fraud before payment, covering Medicare, Medicaid, and the insurance marketplace. Additionally, there are ongoing legal disputes regarding the ratings, with Clover Health winning a recalculation of the 2026 scores and Humana suing after one of its large contracts experienced a significant rating drop.
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