NY Times had an article on value added assessments and I was glad to see this part was addressed:
Another problem is known as the ceiling effect. Advanced students can score so highly one year that standardized state tests are not sensitive enough to measure their learning gains a year later.
In Houston, a district that uses value-added methods to allocate teacher bonuses, Darilyn Krieger said she had seen the ceiling effect as a physics teacher at Carnegie Vanguard High School.
�My kids come in at a very high level of competence,� Ms. Krieger said.
After she teaches them for a year, most score highly on a state science test but show little gains, so her bonus is often small compared with those of other teachers, she said.
http://www.nytimes.com/2010/09/01/education/01teacher.html?pagewanted=2&_r=2&ref=education