Star Ratings Redo Causes ‘Fire Drill’ Exercise for MAOs, Actuaries

Given the outcomes of two legal challenges to CMS’s application of a new Star Ratings methodology last year, CMS on June 13 confirmed plans to recalculate the 2024 Star Ratings — and notified all Medicare Advantage organizations of a “limited opportunity” to resubmit their bids for the 2025 plan year. As a result, plans that stand to benefit from the recalculations and their actuaries are now scrambling to get changes into CMS by its June 28 deadline.

In what industry experts agree is an unprecedented situation, CMS’s decision came shortly after the U.S. District Court for the District of Columbia agreed with SCAN Health Plan that CMS’s failure “to follow its own regulation” resulted in the not-for-profit MA insurer receiving an incorrect 2024 Star Rating, which cost the plan nearly $250 million in quality bonus payments (QBPs) for 2025. That same court also ruled that CMS must recalculate Anthem Blue Cross and Blue Shield of Georgia’s Star Ratings. Elevance Health, Inc., the parent company of the Anthem Georgia plan, filed a lawsuit against HHS in December and disclosed in March that CMS had updated its original ratings, which will lead to an additional $190 million in revenue for plan year 2025. SCAN filed a similar suit in December.

© 2024 MMIT
Lauren Flynn Kelly

Lauren Flynn Kelly Managing Editor, Radar on Medicare Advantage

Lauren has been covering health business issues since the early 2000s and specializes in in-depth reporting on Medicare Advantage, managed Medicaid and Medicare Part D. She also possesses a deep understanding of the complex world of pharmacy benefit management, having written AIS Health’s Radar on Drug Benefits from 2004 to 2005 and again from 2011 to 2016. In addition to her role as managing editor of Radar on Medicare Advantage, she oversees AIS Health’s publications and manages the health editorial staff. She graduated from Vassar College with a B.A. in English.

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