Elevance Health gets partial victory in star ratings lawsuit

CMS must recalculate the Medicare Advantage star ratings for Anthem Blue Cross Blue Shield of Georgia, a federal judge ruled June 10. 

The judge ruled partially in favor of Elevance Health, which sued to challenge CMS' star ratings methodology in December. The insurer sought new ratings for several of its subsidiaries, but the judge ruled CMS needs to recalculate ratings only for BCBS of Georgia. 

Elevance's challenge focused on CMS' use of the Tukey method, a change announced by CMS in a 2020 final rule and implemented in 2024 star ratings. The method removes extreme outliers from measure scores to prevent outliers from affecting all MA contracts, making it more difficult for plans to earn a high star rating. In 2022, a final star ratings rule from CMS did not mention the new change, which the agency added back in the 2023 rule, citing an inadvertent removal. 

CMS also limits scoring changes to 5% annually. In the lawsuit, Elevance said CMS should have factored in those limits before adding the Tukey change back in 2023 versus the other way around.

Randolph Moss, a judge for the U.S. District Court in Washington, D.C, ruled CMS violated the Administrative Procedure Act in applying the Tukey methodology. However, Mr. Moss ruled Elevance proved the Tukey method affected the star rating only for BCBS of Georgia and not the other plans for which it sought revised ratings. 

Elevance Health executives previously said the company could lose up to $500 million in revenue in 2025 due to its decline in star ratings. Only plans receiving a star rating of four or higher are eligible for bonus payments from CMS. The share of Elevance Health MA members in plans rated at four stars or higher declined from 64% in 2023 to 34% in 2024. 

Mr. Moss instructed CMS to recalculate BCBS of Georgia's star rating "in a manner consistent with this opinion." 

"CMS, in turn, is free to decide whether other [Medicare Advantage organizations] should receive similar relief in the administrative process, and, if necessary, any MAO suffering a cognizable injury in fact can pursue judicial relief to the extent appropriate," Mr. Moss wrote. 

Other health plans have challenged CMS' star ratings methodology in court. On June 3, the U.S. District Court for the District of Columbia ruled in favor of SCAN Health Plan's challenge. A judge ordered that SCAN's 3.5-star rating be set aside and prohibited CMS from utilizing the original score to calculate quality bonus payment eligibility decisions.

Zing Health and Renown's Hometown Health have also challenged their respective ratings, though Hometown Health has since withdrawn its lawsuit. 

Becker's has reached out to Elevance Health and CMS for comment and will update this article if more information becomes available. 

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