In the world of Medicare Advantage, hundreds of millions of dollars in health plan revenue can hinge on the success of one call.
Those dollars stem from star ratings, or how the federal government calculates the quality of Medicare Advantage plans using a system of 44 performance measures across 9 categories that lead to a final score of 1 (low) to 5 (high).
Star ratings determine whether plans are eligible for bonus payments from CMS, which can be used to enhance benefits and lower members' costs, potentially leading to plan growth and an improved member experience.
But if a plan sees lower revenue by way of low star ratings, benefits are usually lowered to maintain the company's margins. Less benefits means a worse member experience and a greater chance for lower star ratings moving forward.
"Low star ratings put plans at risk for a Darwinian death spiral unless they are willing to invest to maintain benefits," Sachin Jain, MD, president and CEO of SCAN Group, wrote in Forbes on Oct. 24. "Tough business? No doubt."
In 2024, CMS recalculated Medicare Advantage plans' star ratings after insurers, including SCAN, challenged a new methodology around how the agency calculated the ratings. SCAN also sued over how CMS scored a phone call made by a secret shopper who needed French translation services. The successful challenge resulted in 60 insurers receiving higher star ratings and over $1.4 billion in bonus payments.
CMS conducts secret shopper calls to score MA plans' customer service functions, including text-to-voice teletypewriter services. These services are often used by individuals with hearing or speech disabilities.
For 2025 star ratings, several insurers are challenging CMS again, including Centene, Humana and UnitedHealthcare. Centene has asked a federal judge to require CMS to recalculate its star ratings without including a secret shopper phone call Centene says never reached its call center, resulting in $73 million in lost revenue, according to the lawsuit. UnitedHealthcare also disputed the inclusion of a secret shopper phone call it says never connected to its call center.
"The brittle nature of star ratings and the fact that a single phone call can swing ratings (and payments) as much as they do is often very surprising to observers of the Medicare Advantage industry," Dr. Jain wrote. "And probably the clearest indication that star ratings need to be reformed."
"In the meantime, star ratings — imperfect as they are — are all we have."