Perficient launched AI for Medicare Advantage star ratings a day after CMS cut the number of plans earning bonuses. Its owner is Swedish buyout group EQT.
Perficient's New AI Suite for Medicare Advantage Perficient has introduced a new suite of AI tools designed to assist Medicare Advantage plans in improving their Centers for Medicare & Medicaid Services (CMS) star ratings. These ratings are crucial as they determine access to over $13 billion annually in federal bonus payments. The launch notably occurred just one day after CMS released its 2027 ratings, which indicated a reduction in the number of plans qualifying for these essential bonuses. The tools utilize advanced technologies like predictive analytics, sophisticated simulation modeling, and an innovative agent-driven engagement approach, though specific customer details, pricing information, or performance outcomes were not publicly disclosed in the announcement. The Significance of Medicare Advantage Star Ratings The Medicare Advantage quality bonus program is a substantial financial incentive, with federal expenditures reaching at least $13.4 billion in 2026, representing about 2.3% of the program's total projected payments. Health plans that achieve a rating of four stars or higher out of five are granted a more favorable spending benchmark, typically an increase of five percentage points. Furthermore, plans exceeding 4.5 stars are permitted to retain 70% of the difference between their benchmark and bid. However, the process of qualifying for these bonuses is becoming increasingly challenging; the 2027 ratings showed only 188 out of 508 rated contracts achieved four stars or more, a decline from 229 out of 516 in the previous year. The overall share of members in bonus-eligible plans also dropped to 68% in 2026, the lowest since 2018, with five-star contracts decreasing from 22 to 15. Critiques of the Star Rating System Despite its significant financial implications, the methodology and effectiveness of the Medicare Advantage star rating system face considerable debate. MedPAC, an advisory body to Congress on Medicare issues, has criticized the system for incorporating an excessive number of measures and failing to adequately account for social risk factors among beneficiaries. Additionally, MedPAC points out that the ratings are reported at the contract level rather than the individual plan level, which can obscure nuanced performance differences. The Congressional Budget Office (CBO) further highlighted these concerns in 2018, estimating that abolishing the bonus program entirely could lead to nearly $100 billion in savings over a decade, suggesting that the software developed by Perficient targets a metric that some government advisors consider a weak indicator of actual care quality. Perficient's Corporate Background and Broader AI Adoption Perficient, the company behind these new AI tools, is owned by EQT, a prominent Swedish buyout group managing approximately €130 billion in assets. EQT acquired Perficient for roughly $3 billion and subsequently delisted it in October 2024. Perficient operates globally with around 7,000 employees and maintains European delivery hubs in Romania, Serbia, and the United Kingdom. This move by a private equity-backed entity into the healthcare tech space aligns with a broader trend of AI adoption, even at the governmental level. Washington itself is deploying AI in health programs, with the Department of Health and Human Services (HHS) initiating fraud detection screenings for claims in Medicare, Medicaid, and the insurance marketplace since May. Ongoing Legal Battles Over Medicare Advantage Ratings The integrity and accuracy of Medicare Advantage star ratings are currently subject to ongoing legal scrutiny. Notably, Clover Health successfully secured a recalculation of its 2026 scores, an outcome that is estimated to boost its 2027 payments by approximately $600 million. This decision, however, was appealed by CMS in July, indicating the federal agency's stance on maintaining its rating system. Similarly, Humana has also filed a lawsuit after one of its significant contracts experienced a sharp decline from 4.5 stars to 3.5 stars. While courts have generally favored CMS in these litigations so far, these cases underscore the intense competition and significant financial stakes involved in achieving and maintaining high star ratings for Medicare Advantage plans, with both litigation and new software tools like Perficient's aiming to secure even half a star improvement.
Perficient's New AI Suite for Medicare Advantage
Perficient has introduced a new suite of AI tools designed to assist Medicare Advantage plans in improving their Centers for Medicare & Medicaid Services (CMS) star ratings. These ratings are crucial as they determine access to over $13 billion annually in federal bonus payments. The launch notably occurred just one day after CMS released its 2027 ratings, which indicated a reduction in the number of plans qualifying for these essential bonuses. The tools utilize advanced technologies like predictive analytics, sophisticated simulation modeling, and an innovative agent-driven engagement approach, though specific customer details, pricing information, or performance outcomes were not publicly disclosed in the announcement.
The Significance of Medicare Advantage Star Ratings
The Medicare Advantage quality bonus program is a substantial financial incentive, with federal expenditures reaching at least $13.4 billion in 2026, representing about 2.3% of the program's total projected payments. Health plans that achieve a rating of four stars or higher out of five are granted a more favorable spending benchmark, typically an increase of five percentage points. Furthermore, plans exceeding 4.5 stars are permitted to retain 70% of the difference between their benchmark and bid. However, the process of qualifying for these bonuses is becoming increasingly challenging; the 2027 ratings showed only 188 out of 508 rated contracts achieved four stars or more, a decline from 229 out of 516 in the previous year. The overall share of members in bonus-eligible plans also dropped to 68% in 2026, the lowest since 2018, with five-star contracts decreasing from 22 to 15.
Critiques of the Star Rating System
Despite its significant financial implications, the methodology and effectiveness of the Medicare Advantage star rating system face considerable debate. MedPAC, an advisory body to Congress on Medicare issues, has criticized the system for incorporating an excessive number of measures and failing to adequately account for social risk factors among beneficiaries. Additionally, MedPAC points out that the ratings are reported at the contract level rather than the individual plan level, which can obscure nuanced performance differences. The Congressional Budget Office (CBO) further highlighted these concerns in 2018, estimating that abolishing the bonus program entirely could lead to nearly $100 billion in savings over a decade, suggesting that the software developed by Perficient targets a metric that some government advisors consider a weak indicator of actual care quality.
Perficient's Corporate Background and Broader AI Adoption
Perficient, the company behind these new AI tools, is owned by EQT, a prominent Swedish buyout group managing approximately €130 billion in assets. EQT acquired Perficient for roughly $3 billion and subsequently delisted it in October 2024. Perficient operates globally with around 7,000 employees and maintains European delivery hubs in Romania, Serbia, and the United Kingdom. This move by a private equity-backed entity into the healthcare tech space aligns with a broader trend of AI adoption, even at the governmental level. Washington itself is deploying AI in health programs, with the Department of Health and Human Services (HHS) initiating fraud detection screenings for claims in Medicare, Medicaid, and the insurance marketplace since May.
Ongoing Legal Battles Over Medicare Advantage Ratings
The integrity and accuracy of Medicare Advantage star ratings are currently subject to ongoing legal scrutiny. Notably, Clover Health successfully secured a recalculation of its 2026 scores, an outcome that is estimated to boost its 2027 payments by approximately $600 million. This decision, however, was appealed by CMS in July, indicating the federal agency's stance on maintaining its rating system. Similarly, Humana has also filed a lawsuit after one of its significant contracts experienced a sharp decline from 4.5 stars to 3.5 stars. While courts have generally favored CMS in these litigations so far, these cases underscore the intense competition and significant financial stakes involved in achieving and maintaining high star ratings for Medicare Advantage plans, with both litigation and new software tools like Perficient's aiming to secure even half a star improvement.
