Elevance Health 'considering options' following star ratings hit

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Elevance Health President and CEO Gail Boudreaux said the insurer is "considering all of our options" regarding the Centers for Medicare and Medicaid Services' 2025 Medicare Advantage Star Ratings, which saw the company take a hit in its star ratings.

Boudreaux said that even though Elevance improved its performance across nearly 60% of star measures for payment year 2026, its lower ratings this year are having a tangible effect.

"Unfortunately, we will see the percentage of our members and plans rated four stars or higher decline due to significantly higher cut points," said Boudreaux in an earnings call last week. "The entire decline in our four-star member mix was due to one of our larger age contracts narrowly missing a 4-star rating by 0.0004. We have challenged our initial scoring with CMS and are considering all of our options."

WHAT'S THE IMPACT

Boudreaux said the ratings are an important consideration for the insurer.

"Medicare Advantage Star quality ratings remain a key enterprise priority, and we're committed to our long-term goal of achieving and maintaining star ratings at the high end of all plans in our markets," she said.

Higher rated plans get quality bonus payments. Consumers are able to use the star ratings in choosing a plan.

Only seven plans received 5 stars for Parts C and D performance in the 2025 Medicare Advantage and Part D Star Ratings released this month. This compares to 38 contracts that received 5 stars last year.

UnitedHealthcare has filed a lawsuit, saying the rating downgrade is based on a single interaction between a customer service representative and a CMS secret shopper posing as a Medicare beneficiary.

UHC's lawsuit characterizes the CMS decision as "arbitrary and capricious" and asked the court to intervene ahead of the open enrollment period starting October 15.

The Centers for Medicare and Medicaid Services released the MA star ratings days before the start of the open enrollment period on October 15. 

Humana is also challenging the results, it said in a filing with the Securities and Exchange Commission. The percent of members enrolled in 4-star plans or above accounted for 25% of all members for 2025, down from a 94% enrollment in 2024, Humana said, and on October 18, the insurer formally sued the government over the ratings.

Humana partially blamed higher industry cut points, the upper and lower thresholds for each measure that determine a plan's overall score, from 1-5 stars.

On Friday, Humana filed a lawsuit against CMS and the Department of Health and Humana Services.

THE LARGER TREND

In June Elevance became the second insurer, after SCAN Health Plan, to win a case against the federal government over Medicare Advantage payments. 

The crux of the ruling was that the 2024 Medicare Star Ratings for Blue Cross Blue Shield of Georgia were set aside and the Centers for Medicare and Medicaid Services was ordered to redetermine those ratings in a manner consistent with the ruling. 

In the June lawsuit, Elevance took issue with CMS's decision to change the methodology to determine star ratings, which included recalculating the 2023 cut points. It argued that, because CMS used simulated 2023 cut points instead of the actual 2023 cut points, several of its insurance plans received lower star ratings than they otherwise would have received.

On June 28, in a 6-3 vote, the Supreme Court got rid of the decades-long Chevron doctrine that protected many federal regulations from legal challenges. Now, judges will be freer to impose their own readings of the law – giving them broad leeway to upend regulations on healthcare, the environment, financial regulations, technology and more, Politico said at the time.

This could make it more likely that insurers challenge ratings and other federal regulations. 

Jeff Lagasse is editor of Healthcare Finance News.
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.