Elevance Health, formerly known as Anthem, has filed a lawsuit against the Department of Health and Human Services (HHS) regarding the Medicare Advantage star ratings.
The lawsuit seeks to change a specific contract's score from 3.75 to a 4-star rating. This legal action is part of a larger trend of major insurers challenging the star ratings issued by the Centers for Medicare and Medicaid Services (CMS).
These star ratings are important for determining quality bonus payments and influencing enrollment in Medicare Advantage plans. The recent release of star ratings by CMS showed that only seven plans achieved a 5-star rating, a significant decrease from the previous year.
Some insurers have attributed their lower ratings to changes in CMS methodology and have pursued legal action based on isolated incidents involving "secret shopper" evaluations. Elevance's lawsuit is one of several legal challenges against CMS, with other insurers also raising concerns about their ratings.
The star ratings have significant financial implications for insurers, as they directly impact quality bonus payments that are used to enhance member benefits. Elevance argues that CMS's calculations are flawed and can lead to discrepancies in an insurer's overall star rating. The company claims that CMS's actions have cost them approximately $375 million.
Star ratings are not only a reflection of quality but also play a crucial role in determining the financial health of Medicare Advantage Organizations (MAOs). Elevance emphasizes that these ratings are important for driving enrollment into higher-quality plans and improving member benefits.
The outcomes of these lawsuits could have lasting implications for the Medicare Advantage landscape and how quality and performance are measured and rewarded in the future.