Elevance latest insurer to sue over Medicare Advantage star ratings
Star ratings represent billions of dollars in quality bonus payments. CMS has cost Elevance $375M, the complaint says.
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Elevance Health is the latest insurer to sue the Department of Health and Human Services over Medicare Advantage star ratings.
Elevance, with affiliates Community Insurance Company in Ohio and Wellpoint in Texas, filed the lawsuit last week in federal court in the Northern District of Texas.
The company formerly known as Anthem, wants the court to order HHS to recalculate its 3.75 score for a specific contract to a corresponding 4-star rating.
Only seven Medicare Advantage and Part D plans received 5 stars when the Centers for Medicare and Medicaid Services released star ratings in October. This compares to 38 contracts that received 5 stars in 2024.
One of the plans to receive 5 stars was HealthSun Health Plans by Elevance Health.
Many major insurers who made the 5-star list last year missed it this year, with some blaming changes in CMS methodology and others suing based on a phone call from a "secret shopper."
Four lawsuits have already been filed, Elevance said, adding "Plaintiffs join that chorus …"
Centene is suing over the call measure, saying in its lawsuit that CMS held a single call that never reached its call center against the company.
Humana filed a lawsuit over the calculation of cut points that determine the number of stars.
UnitedHealthcare was the first to sue, also citing a single secret shopper phone call as a reason for its star's downgrade.
WHY THIS MATTERS
Elevance is suing over CMS's calculations that it said were "fraught with statistical variance, which can cause improper impacts on an MAO's overall star rating."
CMS uses 40 different measures to determine cut points which help establish star ratings from 1-5 stars. Each measure has a certain weight and then is aggregated on a weighted basis to determine a numerical score to six decimals.
Elevance said CMS rounds decimals to the millionth decimal, yet star ratings are calculated in half-star increments, so that a 3.75 numerical score should be rounded to 4 stars.
CMS has cost Elevance $375 million, according to the complaint. Star ratings represent billions of dollars in quality bonus payments, much of which are used to increase member benefits, the insurer said.
"Medicare Advantage Star Ratings have become one of the most critical aspects of the Medicare Advantage program, as they purport to measure a Medicare Advantage Organization's quality and performance, drive enrollment into 'higher quality' MOAs and enhance payments that are directly used to improve member benefits," Elevance said in the complaint.
THE LARGER TREND
During its earnings call in October, Elevance Health president and CEO Gail Boudreaux said the insurer was "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.
Elevance improved its performance across nearly 60% of star measures, but the number of 4-star plans declined due to higher cut points, Boudreaux said.
"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," she said.
Last year, Elevance sued HHS in calculating the 2024 star ratings. Elevance prevailed.
Elevance operates Parts C and D health plans in 22 states and Puerto Rico.
Email the writer: SMorse@himss.org
