CMS has redefined what “5-Star performance” means—it’s important to know the impact on your organization.

For years, hospitals have understood that CMS Star Ratings matter—for reputation, for market positioning, and increasingly, for financial performance. What’s changed is how quickly a strong rating can now erode—and how little margin for error remains.

CMS’s newly announced updates to the Hospital Star Rating methodology represent more than incremental refinement. They signal a clear shift in philosophy: patient safety, patient experience and real-world performance data are driving performance. And critically, much of the data that will determine future ratings is already being collected today.

For health system leaders, the question is no longer “What are the changes?”  It’s “Are we prepared for the impact they’ll have on our organization?”

CMS Stars: Adding more measures adds more hospitals. How does this impact your organization’s performance?

CMS has added 6 new measures to the overall hospital star ranking which adds more than 300+ hospitals to the Star rating calculations. With additional hospitals to the mix, your organization’s star rating will likely shift. Its important for your organization to understand the impact on the positioning of your organization relative to others.

More specifically, with the addition of the Hybrid 30-day mortality measure, CMS has introduced new data elements into the risk-adjusted calculations that are new to most organizations. Lab results, vital signs, and claims data will be used to risk adjust your patients and score within the mortality domain. While this data has been reported on Care Compare for some time, many hospitals have struggled with submitting this hybrid data that accurately reflects patient severity and complexity. In turn, your organization’s performance may not be accurately reflected publicly

CMS has also added 5 new Outpatient and Ambulatory Patient Experience measures to the Patient Experience domain. This was an unexpected change leaving many organizations wondering the impact of adding these measures on their performance.

Safety of Care Is No Longer a Tiebreaker. It’s a new Gatekeeper

The most consequential change is CMS’s new two-stage penalty tied to Safety of Care performance.

• Starting with the 2026 Star Ratings (April 2026), hospitals that would otherwise earn 5 stars will be capped at 4 stars if they fall into the lowest quartile nationally for the Safety of Care domain.
• In 2027, that approach becomes even more stringent: any hospital in the lowest Safety of Care quartile will automatically lose one star, regardless of its starting point (with a minimum floor of 2 stars).

This is a fundamental shift. CMS is no longer simply calculating safety into the overall score—it is actively suppressing Overall Hospital Star Ratings for poor safety performance

Many executives don’t yet realize the impact the updated methodology will have on their CMS Hospital Star Ratings. But being caught off guard is not inevitable. Tendo helps hospitals prepare for these changes by identifying safety-related risk early and prioritizing improvement before penalties take effect.

The definition of 5-star performance has changed. The question is whether your organization’s safety performance is evolving with it.

And this is just the beginning. CMS has already finalized additional updates to the Star Ratings methodology, including the use of hybrid mortality measures that blend claims and clinical data (such as labs and vital signs), as well as expanded outpatient patient experience measures within the patient experience domain.

In future blogs, we’ll take a closer look at these changes—and how organizations can adapt their improvement strategies accordingly.

Learn how Tendo can help your organization assess risk, prioritize safety improvements, and prepare for what’s next in CMS Star Ratings.