Centene could end 2023 with no four-star rated Medicare Advantage contracts, CEO Sarah London told investors on a July 28 call.
The company has been working to improve its Medicare Advantage star ratings. The percentage of Centene members with four-star or higher plans dropped from 48 percent to 3 percent in 2022.
Variability in cut points from CMS means Centene's single four-star Medicare Advantage contract's rating could drop this year, Ms. London said.
"While this is disappointing, we do expect to see meaningful movement in our three- and 3.5-star bands in October, and roughly two-thirds of our members are in plans showing year-over-year improvement," Ms. London said.
The company had previously looked to have 20 percent of its membership in four-star contracts for 2024.
Insurers receive bonus payments from CMS for contracts rated four stars and above. Centene received $233 million in bonus payments in 2022, according to KFF.
Ms. London said the company is shifting its strategy to focus on maximizing the number of members in contracts rated 3.5 stars and above, as the company is focused on serving members dually eligible for Medicare and Medicaid and with complex health needs.
"Put simply, star strategy is different when you're managing complex and [dual eligible] populations. Strong performance at 3.5 stars with Centene's target member mix will give our Medicare business the economics necessary to serve these populations well and support our multiyear performance goals," Ms. London said.
Though 3.5-star-rated plans do not receive quality bonus payments, there is a 3 to 6 percent revenue boost when plans move from 3 to 3.5 stars, Ms. London said.
Other payers have also struggled recently to maintain high star ratings. CVS Health is expecting a $1 billion decline in revenue in 2024 as the number of its members in four-star contracts has dropped significantly.