{"id":13415,"date":"2024-11-04T14:35:55","date_gmt":"2024-11-04T14:35:55","guid":{"rendered":"https:\/\/distilinfo.com\/healthplan\/?p=13415"},"modified":"2024-11-04T11:15:43","modified_gmt":"2024-11-04T11:15:43","slug":"cms-drives-higher-standards-medicare-pla","status":"publish","type":"post","link":"https:\/\/distilinfo.com\/healthplan\/cms-drives-higher-standards-medicare-pla\/","title":{"rendered":"CMS Drives Higher Quality Standards for Medicare Plans"},"content":{"rendered":"\r\n<div id=\"rank-math-toc\" class=\"wp-block-rank-math-toc-block has-pale-ocean-gradient-background has-background\"><nav>\r\n<ul>\r\n<li><a href=\"#introduction\">Introduction<\/a><\/li>\r\n<li><a href=\"#the-medicare-advantage-star-rating-system\">The Medicare Advantage Star Rating System<\/a><\/li>\r\n<li><a href=\"#elevance-healths-lawsuit-against-cms\">Elevance Health\u2019s Lawsuit Against CMS<\/a><\/li>\r\n<li><a href=\"#similar-lawsuits-from-other-medicare-advantage-insurers\">Similar Lawsuits from Other Medicare Advantage Insurers<\/a><\/li>\r\n<li><a href=\"#humana-and-blue-cross-blue-shield-of-louisiana\">Humana and Blue Cross Blue Shield of Louisiana<\/a><\/li>\r\n<li><a href=\"#centene-and-united-healthcares-secret-shopper-complaints\">Centene and UnitedHealthcare\u2019s Secret Shopper Complaints<\/a><\/li>\r\n<li><a href=\"#2025-star-rating-changes-and-increased-cut-points\">2025 Star Rating Changes and Increased Cut Points<\/a><\/li>\r\n<li><a href=\"#conclusion\">Conclusion<\/a><\/li>\r\n<li><a href=\"#fa-qs\">FAQs<\/a>\r\n<ul>\r\n<li><a href=\"#q-1-why-are-medicare-advantage-star-ratings-important-for-insurers\">Q1: Why are Medicare Advantage star ratings important for insurers?<\/a><\/li>\r\n<li><a href=\"#q-2-what-is-elevance-health-challenging-in-its-lawsuit\">Q2: What is Elevance Health challenging in its lawsuit?<\/a><\/li>\r\n<li><a href=\"#q-3-how-much-does-elevance-health-stand-to-lose-from-this-rating\">Q3: How much does Elevance Health stand to lose from this rating?<\/a><\/li>\r\n<\/ul>\r\n<\/li>\r\n<\/ul>\r\n<\/nav><\/div>\r\n\r\n\r\n\r\n<h2 id=\"introduction\" class=\"wp-block-heading\">Introduction<\/h2>\r\n\r\n\r\n\r\n<p><a href=\"https:\/\/www.commonwealthfund.org\/publications\/explainer\/2024\/jan\/medicare-advantage-policy-primer#:~:text=CMS%20rates%20Medicare%20Advantage%20plans,from%2086%20percent%20in%202022.\" target=\"_blank\" rel=\"noopener\">Medicare Advantage (MA)<\/a> plans, offered by private insurers, are evaluated each year by the Centers for Medicare &amp; Medicaid Services (CMS) using a star rating system. These ratings, which range from one to five stars, significantly impact the quality bonuses that insurers receive. Elevance Health, one of the largest healthcare insurers in the U.S., has recently filed a lawsuit against CMS, challenging what it views as inconsistencies and statistical variances in the star rating system. This legal action, filed on October 31, is part of a broader industry response, as several insurers have taken CMS to court over perceived flaws in the rating methodology.<\/p>\r\n\r\n\r\n\r\n<h2 id=\"the-medicare-advantage-star-rating-system\" class=\"wp-block-heading\">The Medicare Advantage Star Rating System<\/h2>\r\n\r\n\r\n\r\n<p><strong>How Medicare Advantage Star Ratings Work<\/strong><\/p>\r\n\r\n\r\n\r\n<p>CMS\u2019s star rating system is an evaluation framework used to measure the quality of Medicare Advantage plans. These ratings, assigned annually, are based on multiple metrics, including customer satisfaction, management of chronic conditions, and preventive care. Medicare Advantage plans with ratings of four stars or higher qualify for quality bonus payments from CMS, which can be used to enhance benefits, lower premiums, and invest in member services.<\/p>\r\n\r\n\r\n\r\n<p><strong>Financial Incentives Linked to Star Ratings<\/strong><\/p>\r\n\r\n\r\n\r\n<p>The star rating system directly influences insurers\u2019 financial performance. Plans achieving four stars or higher receive substantial quality bonuses, which can significantly enhance their competitive positioning. For insurers like Elevance Health, even a small miss in ratings can mean a loss of millions in potential revenue, making accuracy in the rating process essential.<\/p>\r\n\r\n\r\n\r\n<h2 id=\"elevance-healths-lawsuit-against-cms\" class=\"wp-block-heading\">Elevance Health\u2019s Lawsuit Against CMS<\/h2>\r\n\r\n\r\n\r\n<p><strong>Grounds for Elevance Health\u2019s Legal Challenge<\/strong><\/p>\r\n\r\n\r\n\r\n<p>In its lawsuit, Elevance Health argues that CMS\u2019s star rating methodology is \u201cfraught with statistical variance.\u201d The company claims that one of its Medicare Advantage contracts narrowly missed the four-star rating by a margin as slim as 0.0004 points, with a final score of 3.749565. CMS\u2019s decision to round star ratings to the sixth decimal place, or millionth, led to Elevance\u2019s rating being rounded down, which the company considers an arbitrary decision.<\/p>\r\n\r\n\r\n\r\n<p><strong>Impact of Star Ratings on Financial Bonuses<\/strong><\/p>\r\n\r\n\r\n\r\n<p>By missing the four-star threshold, Elevance Health estimates it will lose at least $375 million in quality bonuses. These bonuses are crucial for maintaining and enhancing plan quality, as they fund expanded services, help lower member costs, and increase overall plan value. Missing this cutoff affects Elevance\u2019s financial health and potentially impacts the resources available to members.<\/p>\r\n\r\n\r\n\r\n<p><strong>Rounding Practices: Elevance\u2019s Claims of Arbitrary Decisions<\/strong><\/p>\r\n\r\n\r\n\r\n<p>A key point in Elevance Health\u2019s lawsuit is CMS\u2019s choice to round star ratings to the sixth decimal place. Elevance argues that this level of precision is unreasonable and lacks transparency. The company\u2019s legal team asserts that the rounding methodology lacks consistent rationale, especially when the difference in ratings could have such a significant financial impact. Elevance claims this approach is \u201carbitrary and capricious\u201d and seeks a court ruling to invalidate the rounding methodology used by CMS.<\/p>\r\n\r\n\r\n\r\n<h2 id=\"similar-lawsuits-from-other-medicare-advantage-insurers\" class=\"wp-block-heading\">Similar Lawsuits from Other Medicare Advantage Insurers<\/h2>\r\n\r\n\r\n\r\n<p><strong>Industry-Wide Legal Actions Over CMS\u2019s Rating Methodology<\/strong><\/p>\r\n\r\n\r\n\r\n<p><a href=\"https:\/\/ramaonhealthcare.com\/elevance-health-latest-insurer-to-sue-over-medicare-advantage-star-ratings\/\" target=\"_blank\" rel=\"noopener\">Elevance Health<\/a> is not the only insurer to challenge CMS over the star rating methodology. Several other Medicare Advantage providers have also filed lawsuits, each focusing on different aspects of the rating process that they consider problematic.<\/p>\r\n\r\n\r\n\r\n<h2 id=\"humana-and-blue-cross-blue-shield-of-louisiana\" class=\"wp-block-heading\">Humana and Blue Cross Blue Shield of Louisiana<\/h2>\r\n\r\n\r\n\r\n<p><strong>Challenges to the Star Rating Methodology<\/strong><\/p>\r\n\r\n\r\n\r\n<p>Humana and Blue Cross Blue Shield of Louisiana have also brought legal challenges against CMS, citing issues with the cut points that determine ratings. These insurers claim that changing cut points each year creates unpredictability, making it difficult for insurers to consistently achieve high ratings. They argue that CMS\u2019s adjustments to cut points lack transparency, complicating their ability to accurately assess and plan for quality improvements.<\/p>\r\n\r\n\r\n\r\n<h2 id=\"centene-and-united-healthcares-secret-shopper-complaints\" class=\"wp-block-heading\">Centene and UnitedHealthcare\u2019s Secret Shopper Complaints<\/h2>\r\n\r\n\r\n\r\n<p><strong>\u00a0Disputes Over Secret Shopper Calls<\/strong><\/p>\r\n\r\n\r\n\r\n<p>Centene and UnitedHealthcare, two other major players in the Medicare Advantage market, have taken issue with CMS\u2019s inclusion of \u201csecret shopper\u201d phone calls as a factor in determining star ratings. Both insurers allege that some of these calls were not properly connected to their call centers, leading to inaccurate evaluations. They argue that CMS\u2019s reliance on unverified call data unfairly impacts their ratings, further questioning the fairness of the rating system.<\/p>\r\n\r\n\r\n\r\n<h2 id=\"2025-star-rating-changes-and-increased-cut-points\" class=\"wp-block-heading\">2025 Star Rating Changes and Increased Cut Points<\/h2>\r\n\r\n\r\n\r\n<p><strong>Higher Cut Points for 2025 and Industry Impact<\/strong><\/p>\r\n\r\n\r\n\r\n<p>For the 2025 plan year, CMS has increased the cut points, or thresholds, that determine star ratings for various performance metrics. This change has resulted in a decline in the average star rating, which dropped from 4.07 in 2024 to 3.92 in 2025. The shift means that insurers must now perform at a higher level to meet the same star rating standards as before, putting added pressure on plans to improve their quality scores.<\/p>\r\n\r\n\r\n\r\n<h2 id=\"conclusion\" class=\"wp-block-heading\">Conclusion<\/h2>\r\n\r\n\r\n\r\n<p>Elevance Health\u2019s lawsuit against CMS highlights ongoing concerns within the insurance industry about the accuracy, fairness, and transparency of the Medicare Advantage star rating system. As more insurers challenge CMS in court, the agency faces growing pressure to review and potentially revise its methodologies to address these concerns. The outcomes of these cases could have a significant impact on the future of Medicare Advantage ratings, quality bonuses, and the overall approach to evaluating plan performance.<\/p>\r\n\r\n\r\n\r\n<p><span data-teams=\"true\"><span class=\"ui-provider a b c d e f g h i j k l m n o p q r s t u v w x y z ab ac ae af ag ah ai aj ak\" dir=\"ltr\">Discover the latest <a id=\"menurbs\" class=\"fui-Link ___1q1shib f2hkw1w f3rmtva f1ewtqcl fyind8e f1k6fduh f1w7gpdv fk6fouc fjoy568 figsok6 f1s184ao f1mk8lai fnbmjn9 f1o700av f13mvf36 f1cmlufx f9n3di6 f1ids18y f1tx3yz7 f1deo86v f1eh06m1 f1iescvh fhgqx19 f1olyrje f1p93eir f1nev41a f1h8hb77 f1lqvz6u f10aw75t fsle3fq f17ae5zn\" title=\"https:\/\/distilinfo.com\/healthplan\/\" href=\"https:\/\/distilinfo.com\/healthplan\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"Link payers&#039; news updates\"><strong>payers&#8217; news updates<\/strong><\/a> with a single click. 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Join our community today!<\/span><\/span><\/p>\r\n\r\n\r\n\r\n<h2 id=\"fa-qs\" class=\"wp-block-heading\">FAQs<\/h2>\r\n\r\n\r\n\r\n<h3 id=\"q-1-why-are-medicare-advantage-star-ratings-important-for-insurers\" class=\"wp-block-heading\">Q1: Why are Medicare Advantage star ratings important for insurers?<\/h3>\r\n\r\n\r\n\r\n<p>Ans: Medicare Advantage star ratings determine eligibility for quality bonus payments, which help insurers enhance plan benefits, reduce premiums, and fund additional services.<\/p>\r\n\r\n\r\n\r\n<h3 id=\"q-2-what-is-elevance-health-challenging-in-its-lawsuit\" class=\"wp-block-heading\">Q2: What is Elevance Health challenging in its lawsuit?<\/h3>\r\n\r\n\r\n\r\n<p>Ans: Elevance Health is challenging CMS\u2019s star rating methodology, particularly the decision to round ratings to the sixth decimal place, which it argues cost it a four-star rating.<\/p>\r\n\r\n\r\n\r\n<h3 id=\"q-3-how-much-does-elevance-health-stand-to-lose-from-this-rating\" class=\"wp-block-heading\">Q3: How much does Elevance Health stand to lose from this rating?<\/h3>\r\n\r\n\r\n\r\n<p>Ans: Elevance estimates it will lose at least $375 million in quality bonuses due to narrowly missing the four-star rating threshold.<\/p>\r\n","protected":false},"excerpt":{"rendered":"<p>Introduction Medicare Advantage (MA) plans, offered by private insurers, are evaluated each year by the Centers for Medicare &amp; Medicaid&#8230; <a href=\"https:\/\/distilinfo.com\/healthplan\/cms-drives-higher-standards-medicare-pla\/\" style=\"white-space: nowrap;\">Continue Reading <i class=\"fas fa-long-arrow-alt-right\" style=\"vertical-align: middle;\"><\/i><\/a><\/p>\n","protected":false},"author":1,"featured_media":13416,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[1],"tags":[40],"class_list":{"0":"post-13415","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-distilinfo-originals","8":"tag-cms","9":"entry"},"_links":{"self":[{"href":"https:\/\/distilinfo.com\/healthplan\/wp-json\/wp\/v2\/posts\/13415"}],"collection":[{"href":"https:\/\/distilinfo.com\/healthplan\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/distilinfo.com\/healthplan\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/distilinfo.com\/healthplan\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/distilinfo.com\/healthplan\/wp-json\/wp\/v2\/comments?post=13415"}],"version-history":[{"count":5,"href":"https:\/\/distilinfo.com\/healthplan\/wp-json\/wp\/v2\/posts\/13415\/revisions"}],"predecessor-version":[{"id":13445,"href":"https:\/\/distilinfo.com\/healthplan\/wp-json\/wp\/v2\/posts\/13415\/revisions\/13445"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/distilinfo.com\/healthplan\/wp-json\/wp\/v2\/media\/13416"}],"wp:attachment":[{"href":"https:\/\/distilinfo.com\/healthplan\/wp-json\/wp\/v2\/media?parent=13415"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/distilinfo.com\/healthplan\/wp-json\/wp\/v2\/categories?post=13415"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/distilinfo.com\/healthplan\/wp-json\/wp\/v2\/tags?post=13415"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}