Have you ever considered that the world of Medicare Advantage might be a bit like the Land of Oz? Most people haven’t but it’s a fairly accurate analogy. New rules that reshape the path forward. Characters and forces that seem to work against you, even when they claim good intentions. A mysterious wizard at the center of it all.
If you work in Star Ratings or medication adherence, the comparison probably feels less like a stretch and more like your daily reality.
One of the biggest forces reshaping that landscape right now is SDS risk adjustment. It is reshaping how adherence measures are scored, and the window for plans to get ahead of it is narrowing fast. Here is what you need to know, and why the journey through Oz is a useful way to think about it.
Medicare Advantage plans are being asked to do more with less. Constant regulatory changes, tighter contract rates, risk adjustment scrutiny, and increased member churn have reshaped the playing field. For Stars teams especially, it can feel disorienting, like being picked up by a tornado and dropped somewhere unfamiliar.
Much of this pressure traces back to CMS, which can feel like the Wicked Witch of the East: not necessarily acting in bad faith, but imposing changes that create real strain on plans.
The key pressures include:
At the center of this shift are the risk-adjusted adherence measures that fully launched in the 2026 measurement year. These measures adjust a plan's adherence scores based on the sociodemographic status of their membership, specifically age, sex, LIS status, dual eligibility, and disability status.
The calculation looks like this: Risk Adjusted Rate = (Unadjusted Rate / Predicted Rate) x Unadjusted Contract Rate.
The problem is that plans will not know their predicted rate until August following the measurement year. That creates a significant blind spot. Plans cannot precisely calculate their SDS-adjusted performance in real time.
The practical implication is significant.
Without knowing exactly where you stand, the best path forward is to focus on improving adherence rates for the member populations that drive SDS adjustment most: dual eligibles, disabled members, and members under age 55.
Medication adherence is the clearest place to start, and the numbers make the case. Adherence impacts more than 50% of a plan's overall Star Rating. The three adherence measures (diabetes, RASA, and statins) make up three of the five triple-weighted clinical measures. Strong adherence performance also lifts CAHPS scores and the Part C and D improvement measures.
If the goal is to get back to Kansas, meaning profitability, the yellow brick road runs through medication adherence.
Consider a 50,000-member Medicare Advantage plan that partnered with ActualMeds in 2025. The plan had struggled with adherence for three consecutive years, and 40% of its membership was dual eligible.
ActualMeds carved out 17,000 dual-eligible members for targeted outreach. The team reached 7,000 unique members across more than 27,000 total outreach attempts, achieving a 70.4% unique member reach rate and facilitating nearly 7,500 refills.
The results: a 5% to 8% improvement in overall adherence rates, with dual-eligible members seeing an 8% gain in diabetes adherence, 4% in RASA, and 5% in statins. Those dual-eligible gains lifted the entire population.
The path forward features onto three iconic Oz characters and some Oz villains.
The Scarecrow (Brain): Technology alone is not enough, but you cannot succeed without the right platform. Plans need a data-driven system with AI-powered targeting and prioritization, daily claims ingestion, and the ability to identify members at the moment of their first fill. Weekly or biweekly claims pulls are too slow. Members fill prescriptions around the clock and current data will take you further faster and more efficiently.
The Tin Man (Heart): The right care team matters as much as the technology. Teams must understand how to navigate the pharmacy payment channel, build relationships with local providers and pharmacies, and solve SDOH and barriers to care end to end. Members in New Mexico face different challenges than members in Pennsylvania. Local knowledge drives results.
The Cowardly Lion (Courage): Stars and pharmacy teams are under pressure to deliver while budgets are being cut. You cannot do more with less. It takes courage to build a business case for leadership, and to insist on rewarding outcomes, not activity. A value-based contract that ties vendor compensation to adherence rate improvements is the right model.
The Flying Monkeys: Outside forces, including regulatory changes, legal challenges, and shifting CMS guidance, will keep creating noise. The best response is to stay informed and keep moving forward rather than letting uncertainty stall the progress already made.
Year-over-year adherence improvements by social risk factor tell the story. The under-age-55 population saw a 12% improvement in diabetes adherence alone. Dual-eligible and disabled populations saw gains of 5-9% across all three measures.
These populations are often seen as the hardest to reach. But with the right data, the right people, and the right prioritization, they respond, and the whole plan benefits.
Ready to Find Your Path to Five Stars?
ActualMeds recently hosted a webinar that goes deeper into SDS risk adjustment and what it means for your strategy and STAR ratings. Watch it on demand here or schedule a strategy session with our team about a strategy session.