CMS recalculates Medicare Advantage star ratings

CMS has recalculated Medicare Advantage plans' star ratings after insurers challenging the agency's methodology were handed court victories. 

In a memo sent to MA plans on June 13, the agency said it would recalculate plans' star ratings for 2024 without eliminating extreme outliers. 

On June 3, a judge ruled in favor of SCAN Health Plan, which sued over the agency's star ratings methodology. Days later, a judge handed Elevance Health a partial victory in a similar case. Both SCAN Health Plan and Elevance Health challenged CMS's implementation of the Tukey Outlier Rule, which eliminates extreme outliers from data sets used to calculate star ratings, making it more difficult to achieve a high rating. Insurers argued CMS did not follow proper administrative procedures in implementing the rule. 

Judges presiding over Elevance Health and SCAN Health Plan's lawsuits ruled the agency violated the Administrative Procedure Act in its implementation of the new methodology. 

 In the letter, CMS said it will revise star ratings for plans using 2023 cut points. CMS will not decrease any plan's rating, according to the letter. 

Plans must achieve a star rating of four or higher to receive quality bonus payments from CMS. The ratings determine how much plans will earn in bonus payments in 2025, with some insurers standing to bring in millions more with the revised ratings. In its letter to plan directors, CMS said plans that see their star rating go up as a result of the change will have until June 28 to revise their 2025 bids. 

Sachin Jain, MD, CEO of SCAN Group, told the Wall Street Journal insurers could add more generous benefits to their 2025 proposals with additional bonus payments. 


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