Member Memory: The New Vendor Lens on Medicare Advantage Star Ratings

On April 2, CMS published the CY 2027 Final Rule and tripled the weight of two Health Outcomes Survey measures inside the Medicare Advantage Star Ratings. By 2029, HOS and CAHPS will drive close to 40 percent of the total Star Ratings calculation. The shift pulls every health tech vendor that touches a Medicare Advantage member into the Star Ratings conversation, whether or not they have ever positioned their product as Stars-relevant.

In this episode of the Upward Growth Podcast, Ryan Peterson introduces the concept of member memory, a vendor-facing lens for understanding what HOS is actually capturing about the touchpoints a vendor delivers on behalf of a health plan. The episode walks through which categories of vendors are most exposed under the new weighting, a four-stage progression that every vendor should run against each of their health plan customer relationships before their next renewal, and the two questions every health plan will ask in the next renewal cycle.

What you'll hear:

• What member memory is and how it gives a vendor a clearer view of their own role in Medicare Advantage Star Ratings outcomes
• Why HOS and CAHPS will drive close to 40 percent of the total Star Ratings calculation by 2029
• The vendor categories most exposed under the new weighting: risk adjustment, care management, member apps, prior auth automation, behavioral health, and call centers
• The four kinds of member memory and which categories of vendor sit inside each
• A four-stage progression for evaluating where a vendor relationship actually stands with a health plan customer (walked through with a meal delivery example)
• How the CFO filter at health plans is compounding the new HOS weighting and what that means for contracts already on the books
• The two questions every health plan is going to ask in the next renewal cycle and how to know if you can credibly answer them

Read the full analysis in the Upward Growth newsletter: The 2027 Star Ratings Tripled the Weight of Member Experience. Here's What That Changes About Selling to Health Plans.

About Upward Growth: Upward Growth is a health plan market advisory firm. We work with health tech vendors, investors, provider organizations, and management consultancies on how health plans actually buy, operate, and make decisions. 

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Connect with Ryan on LinkedIn: https://www.linkedin.com/in/ryan-peterson-1a20866/

Learn more about Upward Growth: https://www.upwardgrowth.com

Transcript

SPEAKER_00 0:33

Welcome back to the Upward Growth Podcast. This is episode two, and this episode pairs with the article that I published on Tuesday, June 16th, titled The 2027 Star Ratings Triple the Weight of Member Experience. Here's what that changes about selling the health plans. And that piece is on our Substack, Upwardgrowth.substack.com. So the show today picks up where the article paused, adds a little bit of texture I couldn't quite get on the page, and walks through one example I think is the most useful thing in here for the next vendor renewal conversations. So to start, the primary argument in this week's article is that the vendors most exposed under the CY 2027 final rule are the ones who do not consider themselves SARS vendors at all. And here's what I mean by that. Risk adjustment, care management, member apps, call centers, behavioral health point solutions, prior auth automation. Those products do not directly move a star rating measure, but until April, their health plan customers didn't really think of them as STARS relevant either. And that's the part that changed. Quick context on the rule itself before I go further. On April 2nd, CMS published the CY 2027 Final Rule. Two things in it together matter. First, CMS tripled the weight of two health outcome survey measures, the ones that track whether members report improving or maintaining their physical and mental health over two years. At the same time, CMS pulled out 11 other measures from the program, most of them administrative or topped-out. The first move put more weight on the measures plans cannot move with internal operations, while the second move cleared space for the measures to weigh more in the overall calculation. So together they pushed the Health Outcome Survey and CAPS totals to nearly 40% of total star ratings weight by 2029. The reason this matters financially is that the reweighting moves real money across plan PLs and across vendor budgets downstream. Quality bonus payment spending hit at least $12.7 billion in 2025, more than four times the 2015 number, and the average plan is making $400 to $500 per enrollee per year in bonus revenue. When CMS changes what counts towards those bonuses, plans recalibrate, and every contract sitting underneath the plan recalibrates with them. Most vendors have not fully connected this to themselves yet. Some saw the rule, did not see their product or measure category in it, and reasonably concluded it didn't apply to them. But the shift in this ruling and what it creates is actually much broader, and that's what I want to spend the next few minutes on. To unpack why this lands on vendors who never thought of themselves as stars relevant, I want to start with what the measures actually do. The measures CMS just tripled are not measuring what your product did, they're measuring what your customers' members say about their health over the last two years. That's the move that changes the relationship between health tech vendors and star ratings, and many people in this market have not fully absorbed that yet. For anyone who's not worked closely with it, the Health Outcomes Survey, or Haas for short, is a longitudinal survey CMS runs across Medicare Advantage. CMS samples roughly 1,200 members per MA contract, asks them about their physical and mental health, and comes back two years later to ask the same people the same questions. Has your physical health improved, stayed the same, or worsened? Has your mental health improved, stayed the same, or worsened? Are you able to do the things you used to do? Do you have help when you need it? The survey never references your product. It does not ask whether the member liked your care manager, their meal delivery, their MSK program, or their prior off experience. It asks how the member is doing. I want to be careful about something before I go further. How a member is doing two years into being on a plan is mostly a clinical story. And most of that clinical story is owned by the providers the member sees, the PCP, their specialists, the hospital they're admitted to, the therapists they call when things get hard. That's the largest share of whether someone gets healthier or does not. I'm not arguing that vendors are the main driver of HOS outcomes. They aren't. What I am arguing is that the share of a member's two-year experience that is not directly owned by their providers is increasing every year. More care management is being delivered by third parties. More benefits are being delivered through supplemental programs. More day-to-day interaction with the plans happening through apps and portals and prior off status pages. Even with AI absorbing some of that volume, the overall vendor-delivered share of member touch points keeps trending up. So when CMS triples the weight of how members report on their health, they are tripling the weight of a population of touch points, and a growing portion of that population is delivered by health tech vendors on behalf of the plan rather than by the plan or the provider directly. I want to give that a name for the rest of the episode, so we're using the same shorthand. Call it member memory. So defining member memory, the impression a member carries about whether their plan and the vendors operating on behalf of their plan are helping them feel better. That impression is what the survey is actually capturing two years out. Most vendors really have no defensible way to measure their share of that today. The reason that matters in practice is this. You can spend years hitting the operational metric your contract says you have to hit, hit it cleanly, and still be reducing your customer star rating because of how the member describes their health afterwards. Operational performance and member memory have never been graded against each other, but the CY 2027 rule puts them in the same dollar. Okay, so to get practical about which vendors are most exposed and what they should be doing about it, I want to walk through the framework I laid out in the article. The visual is a four quadrant grid in the upward growth colors, and then some pink and green and blue and orange. If you saw it on LinkedIn this week or pull up the Substack piece, like that's the diagram. Worth having open while we walk through it. The first kind are high-stakes moments. Care management, behavioral health, maternity, MSK, oncology. These are the encounters that happen when a member is paying attention because they need something. For example, a care manager who calls back when she said she would becomes a great answer to did someone help me when things got hard over the last two years. It's also telling when a behavioral health vendor who cannot get the member to a therapist for six weeks becomes that answer to. The second kind are tangible benefits. Meals, transportation, fitness, in-home care, companion services. These were originally bought to drive enrollment and retention. They're now being bought against STARS too, because they're designed to leave a memory. The strategic question for vendors in this category has changed over the last 12 months. Plans used to ask how many members use the benefit. Now they're starting to ask what the member said about it three months later. The third kind are everyday digital touch points, member apps, portals, prior off status pages, claims letters, ID cards. Each interaction's small, but the cumulative imprint is what plans are now grading, as members rarely report on individual sessions, but they sure report on whether things worked when they needed them to. And the fourth kind are transactional encounters, risk adjustment visits, prior off decisions, denial letters, and audits. None of these are sold as member experience programs, yet all of them leave a lasting memory. A fast, well-explained prior off decision, even when the answer is no, lands differently than a slow, opaque one. And a home visit that feels like care lands differently than one that feels like an audit. These vendors have been graded on operational metrics for 20 years. The grade is changing, and most of them really don't have the infrastructure for the new one. And here's where I want to go a level deeper than the article does. With any one of these four categories, the vendor relationship itself has stages. A vendor can be in the same category selling the same product and have one of four very different relationships with the same health plan customer, depending on how far they've moved on the progression I'm about to walk through. Every vendor I work with should do this exercise across each of the health plan customer relationships, and the exercise applies regardless of which of the four categories the vendor sits in. Let's use a meal delivery vendor as an example. Stage one is reporting boxes delivered and households served, quarter over quarter. The plan can verify the contract is being executed, but that's really the extent of what they know. Stage two adds a post-delivery NPS survey to that reporting. The plan now knows how the member felt the day the meals arrived, but they still don't know how a member feels a month later. Stage three is fielding member sentiment at 90 days at 12 months after the program starts, tracking how members describe the meals over time, and reporting back on whether the member connects the experience to the plan brand or to the vendor brand. And stage four is co-branding the packaging with the plan, including plan attributed welcome materials in every shipment, bringing longitudinal member language back to the plan that the plan can use in its own HOS strategy, and showing up to renewal scoping with the data in hand instead of waiting to be asked. That is the same company selling the same product in four very different relationships with the health plan. Most vendors are at stage one or two, and under the old star ratings math, that was enough. Under the new math, stages three and four are where vendors stop being procurement light items and start being trusted partners. That's also where plan budgets are starting to follow. Honestly, one of the single most useful things a vendor can do this quarter is figure out which stage their plan customer would put them in. Now to bring this back to where it actually shows up in the market this year, the vendor evaluation conversation playing out at plans right now is already absorbing this rule into how renewal terms get set. And that's where I want to spend the last few minutes. Two shifts are compounding inside how plans are evaluating their vendor portfolios. The first one is procedural. Compliance and legal are weighing in on vendor contracts more often than they used to, particularly contracts that touch any stars adjacent measure. And sure, a lot of that has to do with the ongoing clover litigation, which is moving week by week, so I'm not going to spend time here forecasting how that lands. What I will say is that the procedural scrutiny those teams are applying to vendor contracts is not going away regardless of how clover resolves. That's a pretty durable shift. The second one is financial, and it's probably the more important of the two. I wrote a piece months ago called the CFO Filter about how planned CFOs have been pulling vendor evaluation further upstream and applying financial discipline pressure earlier in every procurement and renewal decision. The CFO filter was tightening before any of this happened, driven by margin compression, and includes the eleventh accrual from May, the OIG compliance guidance, and the Medicaid cuts from the Big Beautiful Bill. So the CY 2027 rule adds another lens to that filter, not a separate lens. The same CFO who was already asking whether a vendor is worth the contract value is now also asking what that vendor is doing to the plan's member experience exposure under the new Haas weighting. The filter is finer, the questions harder, the bar to clear them went up. Where this lands most directly is on the contract's plans have already signed. Payment at risk terms, shared savings arrangements, and performance guarantees tied to specific measures are being reopened and remodeled to account for new member experience exposure that was not priced into the original contract. So new procurement is moving slower because of the procedural scrutiny, but the renewal cycle is where the immediate financial action sits. What this means for you if your work involves growing a partnership with the health plan is that the next renewal conversation is not going to look like the last one. The health plan is going to ask two questions that have not been asked before and they're connected. I want to be precise about something before I lay them out. None of what I'm about to say replaces the work of what's already being done. Closing gaps still matter, engagement still matters, operational excellence still matters. But those are table stakes for being a vendor or a partner in this market. They're not going anywhere. What is changing is that there is now another layer of accountability sitting on top of all of that. And the questions the health plan is going to ask in the next renewal cycle are about that new layer. The first question is the big one. What share of the member memory that now drives close to 40% of our star ratings is your touch point shaping? And is it pulling us up or pulling us down? That's the question every other point in this episode rolls up to. A vendor can be hitting every operational metric in their contract, every gap closure target, every engagement number, and still not have an answer to this one. The member memory layer is being graded separately from the operational layer and now has the dollars behind it. The second question follows directly because it's the only way to get a credible answer on the first. Where is the vendor on the four stage progression I walked through earlier? Stage one, where the contract execution can be verified, but not much else. Stage two where there is point of service sentiment, but nothing longitudinally. Stage three, where member sentiment is tracked at 90 days or 12 months, and brand attribution is reported back. Or stage four, where the vendor is co-branded, plan attributed, and showing up to renewal scoping with the data in hand. The reason these are connected is that the first question cannot be answered credibly without the work that climbs upon the second. A vendor at stage one or two has really no defensible read on what the touch point is to member memory. A vendor at stage three or four does. The takeaway here is simple. Walk into the next renewal with an answer to both questions ready, or at least a credible roadmap for how you're going to develop one over the next cycle. If there's one thing to take away from this episode and do this week, it's to pick one health plan customer and run yourself through this exercise. Ask yourself the two questions I just laid out, honestly, about that relationship. What share of the member memory driving close to 40% of their star ratings is your touch point shaping? And what stage are you actually at on the four-stage progression? The vendors that do that work over the next 90 days are going to be walking into 2027 renewals in a different way than ones who choose to ignore it. By the way, this is also the cheapest time you'll ever have to start. Not because any rule is changing again, but because every vendor in your category is in the same position you're at right now. And the ones who are going to have a first mover advantage are going to set what good looks like for the health plans to evaluate everyone else against. Now, in a week or so, I'll be in Kualapalooza in Texas and be on a panel actually talking about Haas and stars with some wonderful people. Find me if you're going to be there, say hi. And if this episode raised a question for you, send it to me. Reply to the newsletter, message me on LinkedIn. That's the kind of feedback that tells me what to write about next. And finally, if this show is earning a slot in your week, the most useful thing you can do for it right now is to hit follow and subscribe wherever you're listening, and to leave a rating on Apple Podcasts or Spotify or wherever you listen. I'm Ryan Peterson. Here's to Upward Growth.