The Ratings Game

Open Minds | By Monica E. Oss

$11.8 billion. That is how much Medicare health plans received in 2024 in bonus payments as a result of Medicare star ratings—a number that has more than tripled since 2015 (see Medicare Advantage Quality Bonus Payments Will Total At Least $11.8 Billion In 2024).

The most recent development is that a federal judge has ordered the Centers for Medicare & Medicaid Services (CMS) to recalculate UnitedHealthcare’s Medicare Advantage (MA) star ratings for 2025. While the judge did not agree with UnitedHealthcare’s assertion that CMS held them to a different standard than other insurers, the court ordered CMS to reduce the weight of call center metrics in calculating star ratings. The recalculated ratings could increase UnitedHealthcare’s MA earnings by $10 million (see CMS Ordered To Recalculate UnitedHealthcare’s 2025 MA Stars).

UnitedHealth Care isn’t the only Medicare Advantage plan that has sued about its ratings (see Seeing The Stars). Elevance Health, Centene, and Humana have also challenged their ratings and bonus payments (see Elevance Health Sues HHS Over Medicare Advantage Star Ratings, Centene Sues HHS Over Medicare Advantage Star Ratings Fall, and Humana Sues US Health Agencies). Elevance claims that federal regulators employed an “arbitrary and capricious” approach to calculating quality scores, resulting in a miscalculation that has cost the company at least $375 million in bonus payments and rebates, Humana has made a similar claim. Meanwhile, Centene is seeking a court order directing the CMS to recalculate its ratings, excluding the impact of a mishandled “secret shopper” call, which it argues could result in a $73 million in revenue.

And just this month, Alignment Healthcare became the latest plan to file suit to improve their ratings (see Alignment Healthcare Sues CMS Over Star Ratings, Disapproves Of Federal Contractor’s Role). Alignment alleges that CMS ratings, which are based on “objectively bad data science,” were calculated incorrectly. Furthermore, the company argues that the CMS claims the appeals process misclassified one of its appeals, causing a two-star reduction—from five stars to three—on one measure. Additionally, Alignment contends that the CMS wrongfully overturned a claim denial.

Health plan executives are focused on CMS Star Ratings and National Committee for Quality Assurance (NCQA) scores because they translate into plan revenue. And for provider organization executives who want ‘preferred’ relationships with those health plans understanding the health plan performance metrics —and being able to demonstrate how they support improving those measures—is critical. For an update on the health plan performance issues and rating systems, check out these resources in the OPEN MINDS Industry Library.