282 hospitals could lose a star from this new CMS rule change. We predict if your hospital is one of them.
CMS recently proposed removing a star from hospitals with poor safety scores in the 2026 Outpatient Prospective Payment System rule. Any hospital with safety scores in the bottom quartile will lose one star, regardless of their performance in other quality areas (CMS, 2025a). This change would phase in over two years, starting with five-star hospitals in 2026, then expanding to all hospitals with two or more stars by 2027. Understanding your hospital’s risk of losing a star is critical for planning your quality improvement approach.
The Business Impact
For health system leaders, a star loss represents a significant threat to your hospital’s payer negotiations, community trust, and reputation. We have worked with organizations that face quality-based incentives in commercial payer contracts tied to star performance. Researchers have shown that consumers are willing to pay more and travel farther for care at higher star-rated hospitals (Trenaman et al., 2024); current patients may leave to seek higher rated alternatives for their health care. We have also spoken with leaders who have been met with concerns from board members and major donors when public quality ratings are less-than-desired. The loss of a star has far-reaching implications.
Effectively addressing that loss requires strategic planning based on a thorough understanding of the predictions.
Interactive Risk Assessment
Using the latest Care Compare data (CMS, 2025c), we’ve developed predictions to help hospital leaders understand their risk. Our interactive tool shows your estimated 2026 stars before and after the proposed safety adjustment, your safety performance ranking, and predictions through 2027.
For example, in our analysis, Northwestern Memorial Hospital shows safety scores in the 84th percentile (CMS, 2025b). This is well above the bottom quartile threshold and indicates they would retain their current star rating under the proposed changes. To support the safety domain scoring, the interactive tool shares all eight safety measures so you can more easily identify improvement strategies (CMS, n.d.).
The analysis reveals which hospitals face immediate risk in 2026 and helps leadership teams prioritize improvement efforts. Adding to the challenge, CMS has also revised several safety measures for 2027, creating compounding risk for hospitals already struggling with safety performance (CMS & ONC, 2025). While these predictions use current methodology and actual results may vary, they provide the strategic insight leadership teams need for proactive planning.
Your Next Steps
Hospital leaders have two immediate ways to ensure their quality story is expertly told:
- Advocacy: Comments on the proposed rule are due by September 15, 2025. This represents your organization’s opportunity to influence the final policy through formal feedback to CMS (CMS, 2025a).
- Know Your Story: While our interactive tool provides general predictions, every hospital’s situation is unique. Get a custom analysis that examines your specific scores, identifies your highest-impact improvement opportunities, and provides strategic recommendations tailored to your organization’s current performance.
Thank You for Your Interest
Ready to take control of your hospital’s quality story? Contact CareKate Analytics for strategies designed specifically for these changes from CMS, including PSI-90 and THK Complication improvements.
Your Quality Story, Expertly Told
Disclaimer
This analysis uses CMS’s August 2025 Care Compare data for informational and educational purposes. Actual star ratings will be calculated using updated data sets as they become available. Predictions are estimates based on current methodology and proposed regulatory changes. This content does not constitute legal, financial, or professional advice. CMS regulations are complex and subject to change. Hospitals should consult with qualified legal and compliance professionals before making operational decisions based on this information. CareKate Analytics makes no warranties regarding the accuracy or completeness of this content and is not liable for any decisions made based on this information.
References
Centers for Medicare & Medicaid Services. (2025a, July 17). Medicare and Medicaid programs: Hospital outpatient prospective payment and ambulatory surgical center payment systems; quality reporting programs; overall hospital quality star ratings; and hospital price transparency. Federal Register, 90(138), 33476-33865. https://www.federalregister.gov/documents/2025/07/17/2025-13360/medicare-and-medicaid-programs-hospital-outpatient-prospective-payment-and-ambulatory-surgical
Centers for Medicare & Medicaid Services. (2025b, August 6). Overall Hospital Quality Star Ratings: 2025 SAS Pack Software Documentation. https://qualitynet.cms.gov/inpatient/public-reporting/overall-ratings/sas
Centers for Medicare & Medicaid Services. (2025c, August 6). Provider data catalog. https://data.cms.gov/provider-data/
Centers for Medicare & Medicaid Services & Office of the National Coordinator for Health Information Technology. (2025, July 31). Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals (IPPS) and the Long-Term Care Hospital Prospective Payment System and Policy Changes and Fiscal Year (FY) 2026 Rates; Changes to the FY 2025 IPPS Rates Due to Court Decision; Requirements for Quality Programs; and Other Policy Changes; Health Data, Technology, and Interoperability: Electronic Prescribing, Real-Time Prescription Benefit and Electronic Prior Authorization. Federal Register, 90, 36536. https://public-inspection.federalregister.gov/2025-14681.pdf
Centers for Medicare & Medicaid Services. (n.d.). Data collection periods. QualityNet. https://qualitynet.cms.gov/inpatient/public-reporting/overall-ratings/data-collection
Trenaman, L., Harrison, M., & Hoch, J. S. (2024). What is a star worth to Medicare beneficiaries? A discrete choice experiment of hospital quality ratings. Health Affairs Scholar, 2(1), 1-7. https://doi.org/10.1093/haschl/qxad085
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