Elevance Health is expecting to lose around $500 million in revenue in 2025 as a result of declining Medicare Advantage star ratings, CEO Gail Boudreaux said.
The percentage of Elevance Health members enrolled in contracts rated at four stars or higher will decline from 64% in 2023 to 34% in 2024, according to documents the company filed with the Securities and Exchange Commission Oct. 13.
In the filing, the company said it was "disappointed" in aspects of the rating, especially declines in members' reported satisfaction with access to appointments and care.
On an Oct. 18 earnings call, Ms. Boudreaux said the company is investing in its customer service and network access to improve its ratings for 2025. Elevance Health rolled out a new customer service model for Medicare members, My Health Advocate, in July, and is automating and eliminating some prior authorizations.
"Collectively, these actions and the ongoing investments should enhance our performance in key star measures and ultimately increase member satisfaction with our plans," Ms. Boudreaux said.
Medicare Advantage plans must receive star ratings of four or higher to earn quality bonus payments from CMS. The overall average MA star rating declined slightly in 2024, to an average of 4.04, according to CMS. Star ratings in 2024 determine bonus payments for 2025.
The agency scores plans based on clinical quality outcomes and member satisfaction. Ms. Boudreaux told investors some of the decline was because of changes in CMS' methodology for calculating star ratings.
"As you think about our performance, we improved in about half of the star measures, but those were not enough to offset the impact of the heavily weighted measures and higher cut points," Ms. Boudreaux said.
Other large insurers have reported expected revenue declines from unfavorable star ratings. CVS Health predicted it would lose between $800 million and $1 billion in revenue in 2024 due to the lower star ratings in 2023, though the company expects to recover most of these losses in 2025.