Elevance Health sues CMS in latest challenge to Medicare Advantage star rating methodology
The star ratings given to Medicare Advantage plans by the Centers for Medicare & Medicaid Services (CMS) are once again being challenged, this time in a federal lawsuit filed by Elevance Health.
In June, CMS announced it would be altering its methodology for the rating system, following a successful lawsuit from Clover Health. In May, a U.S. District Court in Georgia ruled that the agency wrongly included 20 metrics in its calculation, which in Clover’s case reduced star ratings on its Medicare Part C plans from 4 to 3.5.
As a result of the ruling, CMS said it would be recalculating the latest round of star ratings it handed out to all privatized Medicare plans, adding that it would only update scores if they would now increase, leaving no plan penalized.
However, Elevance is questioning if the agency is following through with the court’s decision. In the ruling, 10 of the 20 metrics were ruled invalid completely, while another 10 would need to be subjected to public comment before the agency could formally use them to calculate ratings.
Essentially, a judge in Georgia ruled that, for now, all 20 metrics could not be used to measure the quality of Medicare Advantage plans. Categories used by CMS include things like coverage network size, customer service efficiency, speedy claim fulfillment and more.
Whatever measures the court rejected, Elevance is arguing their plans were also downgraded in a manner similar to Clover Health’s, only they didn’t benefit from the half-star gain that Clover saw.
Over $100M in the balance
At stake are adjustment payments, paid by CMS based on a plan’s level of quality and efficiency, as measured in star ratings.
In its court filing, Elevance said it stands to gain $115 million in bonus payments should its star ratings be positively adjusted, which it argued they should be if CMS is following through with its promise to eliminate the 20 metrics struck down in court.
“By giving Clover a recalculated, more favorable star rating while refusing to extend that same recalculation to Elevance, CMS has directly disadvantaged Elevance in markets where the two MAOs compete for the same Medicare beneficiaries," the lawsuit from Elevance reads.
The Indiana-based health insurer is asking a judge to force CMS to apply the same calculation it used for Clover to its health plans, arguing that all Medicare Advantage payers deserve to be evaluated using a consistent methodology.
CMS has yet to respond to the complaint.
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