Fix Your Appeals & Grievances Process for Improved Star Ratings

A Strategic Guide for Health Plans to Improve CMS Star Ratings through Process Optimization and Automation

Understanding the Star Ratings Landscape

Achieving a five-star rating from the Centers for Medicare & Medicaid Services (CMS) is a coveted goal for health plans. These ratings are not only a measure of quality and compliance but also a major determinant of revenue, reputation, and member trust.

In recent years, CMS has raised performance thresholds for health plans, making it harder to achieve a 4-star or 5-star rating. While the average quality across Medicare Advantage (MA) plans has improved, fewer plans now reach the highest tier. The implication is clear: maintaining high ratings demands operational precision, regulatory adherence, and superior customer experience.

CMS evaluates MA plans across several parameters, including clinical outcomes, patient experience, access to services, and administrative efficiency. Among these, one of the most influential yet often overlooked areas is the Appeals and Grievances (A&G) process a key driver of both member satisfaction and compliance outcomes.

Why Star Ratings Matter More Than Ever

High star ratings are not just about compliance; they directly impact a plan’s bottom line. The difference between a 3-star and a 4-star rating can translate into millions in rebates, bonuses, and additional enrollments.

Key Financial Incentives

• Rebates and Bonuses: Plans with 4 stars or higher receive up to 5% in rebates and qualify for annual bonus payments, which have collectively grown from $3 billion in 2015 to over $6 billion in 2018.
• Enrollee Growth: A one-star improvement can lead to an 8–12% increase in enrollment and up to 17% revenue growth through bonuses and new members.
• Marketing Advantage: A 5-star rating is a public endorsement of quality. High-rated plans are prominently listed by CMS and attract more enrollees, creating a self-reinforcing cycle of revenue and reputation.
• Retention Impact: Plans with lower ratings experience higher member dis-enrollment. For example, plans rated below 3.5 stars see up to 15–20% annual dis-enrollments compared to under 5% for top-rated plans.

In short, star ratings fuel a virtuous cycle of revenue growth, member loyalty, and compliance success or a vicious cycle of financial and reputational decline if neglected.

The Crucial Role of Appeals and Grievances (A&G)

While many health plans focus on clinical or administrative parameters, the Appeals and Grievances process directly affects multiple high-weighted CMS metrics related to timeliness, access to care, and member satisfaction.

CMS audits consistently reveal that non-compliance in A&G processes is one of the most common reasons for penalties, enforcement actions, and lost star rating points.

Common CMS Findings in A&G Audits

• Misclassification of coverage determination requests as grievances or inquiries.
• Delays in notifying enrollees or providers of appeal decisions.
• Incomplete or unclear denial letters.
• Failure to forward cases to the Independent Review Entity (IRE) on time.
• Lack of documentation and inadequate investigations of grievances.

These issues not only impact compliance but also create friction in member experience, leading to complaints, negative reviews, and higher dis-enrollment.

How A&G Affects Star Ratings

“Access to services” is a major assessment category in CMS Star Ratings. Key parameters linked to A&G processes include:

• Timely decision-making on appeals.
• Transparency and clarity in communication.
• Fairness and accuracy in grievance resolutions.
• Auditability and proper documentation.

Failing to meet CMS timelines or mismanaging appeal classifications can lead to penalties, loss of bonuses, and a reduction in overall star ratings.

In fact, CMS reports show a direct correlation between audit scores and star ratings plans with over 4.5 stars consistently outperform lower-rated ones in audit results, demonstrating how compliance maturity drives performance.

The Path Forward: Automation and Data-Driven Compliance

Manual A&G processes, heavily reliant on paperwork and human oversight, are prone to delays and inconsistencies. Automation offers a practical way to achieve both compliance and efficiency, ensuring CMS standards are met consistently.

The Automation Advantage

1. Timely Case Handling: Automated workflows track due dates, ensure prompt resolutions, and prevent missed deadlines.
2. Accurate Classification: Intelligent data capture and business rules automatically distinguish between appeals, grievances, and inquiries.
3. Transparency and Auditability: Every interaction and document is logged, ensuring full traceability for audits.
4. Integrated Collaboration: Dynamic case management connects multiple stakeholders providers, members, and regulators in real time.
5. Automated Communication: Letters such as acknowledgments and resolutions are generated instantly and recorded within the case file.
6. Compliance Alerts: Automated triggers notify users of regulatory changes and pending timelines to avoid non-compliance.

By embedding automation, health plans can achieve the precision and agility required to sustain high star ratings.

Newgen’s Unified Automation Platform for Appeals and Grievances

Newgen Software offers an AI-powered, configurable Appeals and Grievances Management Solution that helps payers optimize operations and maintain CMS compliance effortlessly.

Key Capabilities

• Unified Case Management: Manage all appeals, grievances, and coverage determinations in a single interface.
• Digital Document Management: Eliminate paper dependency through end-to-end digitization.
• Straight-Through Processing: Automate repetitive actions, enabling staff to focus on exceptions.
• Configurable Workflows: Adapt easily to regulatory changes and internal process updates.
• Audit-Ready Documentation: Capture and archive every action and decision, ensuring transparency.
• Integration with IRE: Seamless forwarding and communication with the Independent Review Entity.

This solution helps health plans improve responsiveness, reduce compliance risks, and deliver faster, more consistent service experiences.

A 5-Star Action Plan for Healthcare Payers

To move from compliance struggle to operational excellence, health plans must embrace a structured, technology-enabled approach.

Step 1: Analyze Star Ratings and Identify Weak Links

Review your latest CMS Star Ratings and pinpoint metrics affected by A&G inefficiencies.

Step 2: Assess Your Existing Processes

Map current workflows, identify bottlenecks, and evaluate manual dependencies that delay case handling or cause errors.

Step 3: Implement a Unified Platform

Adopt an intelligent automation platform that consolidates all A&G processes and ensures consistent, compliant outcomes.

Step 4: Enable Data Transparency

Ensure every appeal and grievance case is traceable, auditable, and accessible for internal and external reviews.

Step 5: Build Continuous Improvement Loops

Use analytics and dashboards to monitor timeliness, resolution quality, and process performance continually optimizing based on insights.

Real-world Impact

Health plans that automate their A&G processes with Newgen’s unified platform achieve:

• 60% faster case resolution.
• 40% reduction in compliance errors.
• 25% improvement in customer satisfaction scores.
• Complete audit readiness.

These improvements not only drive higher ratings but also help insurers create a member-first culture rooted in trust and accountability.

Conclusion: Turning Compliance into Competitive Advantage

As CMS regulations evolve and star rating thresholds rise, appeals and grievances management has become a strategic differentiator for health plans.

Automation is no longer optional it is the key to unlocking consistent compliance, efficiency, and customer delight.

By leveraging Newgen’s Unified Automation Platform, health plans can transform their A&G processes from a regulatory obligation into a driver of growth, loyalty, and five-star performance.