“Truly shocking” and “huge setback” were just two of a flood of analyst reactions to Humana Inc.’s Oct. 2 disclosure that its percentage of Medicare Advantage members in plans with 4 or more stars will plummet to 25% next year. That’s down from an estimated 94% for 2024 and is largely the result of a decline in Star Ratings for its largest contract, according to a new filing from Humana.

Although the full set of Star Ratings data won’t be released until next week, this development confirmed industry fears that rising cut points will diminish ratings — and related revenue. UnitedHealthcare, meanwhile, has already filed a complaint over CMS's scoring of one measure, which industry observers predict could be followed by similar challenges.

Medicare Advantage plans are set to receive at least $11.8 billion in quality bonus payments in 2024, according to a recent analysis by the Kaiser Family Foundation (KFF). This figure represents an 8% decline from the $12.8 billion awarded in 2023, a reduction that was not surprising given the expiration of pandemic-era policies that temporarily boosted Star Ratings for some plans. But with rising cut points and looming program changes such as the Health Equity Index (HEI) replacing the current reward factor, payers may struggle to improve their Star Ratings — and thus boost bonus payments — moving forward.

Five insurers received the highest scores in the latest National Committee for Quality Assurance (NCQA) Health Plan Ratings, which assess plans based on patient experience and clinical quality. Two of those health plans tell AIS Health that their early adoption of value-based care models and buy-in from physicians and members are the keys to achieving their highly rated status.

The results of the annual NCQA report were published on Sept. 16 and included 1,019 commercial, Medicare and Medicaid health plans that reported Healthcare Effectiveness Data and Information Set (HEDIS) data to the NCQA, representing about 227 million people.

The Medicare Advantage quality bonus program (QBP) can be a boon to insurers and an object of scorn to MA’s critics. With both MA enrollment and QBP payments to highly rated plans on the rise, concern about overpayments and access to high-quality plans is mounting. Seeking greater understanding of these issues, a new analysis of CMS data from the Urban Institute examined changes in Stars performance, MA plan demographics and QBP payments from 2015 to 2023. Researchers found that both Star Ratings and QBP payments per enrollee increased from 2015 to 2023, with total QBP payments reaching nearly $13 billion in 2023 compared to $3 billion in 2015. The analysis also found that plans that receive the most bonus payments are also more likely to enroll the most socioeconomically advantaged beneficiaries, raising questions about whether enhanced benefits are reaching the populations most in need of them.

Following its unprecedented decision to recalculate the 2024 Medicare Advantage Star Ratings after two federal judges agreed there were flaws in their initial calculation, CMS on July 2 released the updated 2024 scores for Part C and Part D contracts. Plans’ overall ratings were updated only if they improved under the revised methodology. Overall, 63 Medicare Advantage Prescription Drug (MA-PD) plan contracts that enroll more than 1.9 million members were impacted, according to AIS Health’s analysis of the CMS release and AIS’s Directory of Health Plans (DHP).

CMS’s recent revision of Medicare Advantage Star Ratings made some health insurers, especially CVS Health Corp.’s Aetna, big winners in the eyes of Wall Street. A number of insurers received higher bonus payments from CMS for the 2024 plan year after the revision, and others were able to resubmit their bids for the 2025 plan year on more favorable terms.

The changes are the result of the rulings in lawsuits brought by SCAN Health Plan and Elevance Health, Inc. against CMS. In the SCAN lawsuit, the U.S. District Court for the District of Columbia found 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 separately that CMS must recalculate Elevance subsidiary Anthem Blue Cross and Blue Shield of Georgia’s Star Ratings.

Although overall customer satisfaction rankings improved year over year in the J.D. Power 2024 U.S. Commercial Member Health Plan Study, nearly all evaluated health plans struggled to provide a high-quality digital customer experience. Indeed, one perennially high-performing plan admits that it, too, has been striving to solve the digital-experience puzzle — but it hopes that a new affiliation agreement will help by adding much-needed scale and access to capital.

This year’s J.D. Power survey measured satisfaction among 29,188 members of 147 group and individual health plans in 22 regions throughout the U.S. from January to April 2024. Plans are scored based on performance in eight core dimensions: “able to get health services how/when I want,” “digital channels,” “ease of doing business," “helps save time and money,” “people,” “product/coverage offerings,” “resolving problems or complaints” and “trust.”

As changes such as the application of the Tukey outlier deletion methodology and the introduction of the Health Equity Index stand to make the Medicare Advantage landscape more competitive, CMS in recent weeks issued three contract terminations based on poor performance over a three-year period. While the COVID-19 public health emergency afforded MA and Part D insurers certain flexibilities, experts say the recent enforcement actions signal a tougher CMS coming out of the PHE.

Modern Healthcare on Jan. 8 broke the news that consistently poor Star Ratings for Centene Corp.’s WellCare Health Insurance of Arizona and WellCare Health Insurance of North Carolina would force the exits of two Medicare Advantage Prescription Drug (MA-PD) contracts from the MA market. According to separate letters to the subsidiaries dated Dec. 27, CMS decided to impose intermediate sanctions after WellCare failed to achieve a Part C summary Star Rating of at least 3 Stars in three consecutive rating periods for the specific contracts. That means the contracts had to stop enrolling new Medicare beneficiaries and cease all marketing activities, effective Jan. 12.

Only 2% of Medicare beneficiaries who enrolled in a stand-alone Prescription Drug Plan (PDP) in 2024 will be in contracts with 4 or more stars, compared to 42% in the 2022 plan year and 9% in 2023, according to CMS’s recently released estimates. The average Star Rating for PDPs dropped to 3.11 in 2024 from 3.70 in 2022, with two contracts receiving 1.5 stars.

The distribution change is largely fueled by methodology changes in how many of the Star Ratings are calculated. Known as Tukey outlier deletion, the changes center on removing outlier contract scores when determining the cut points for all non-Consumer Assessment of Healthcare Providers and Systems measures.

Despite declines in the average overall Star Rating for Medicare Advantage Prescription Drug plans and the number of MA-PD contracts earning 4 stars or higher, the 2024 Star Ratings data released by CMS last month indicates that about two-thirds of performers held onto their 5-star rating from the previous year. For our annual series on the success stories of highly rated MA plans, leadership at several repeat 5-star performers touted comprehensive, integrated and localized approaches to continually delivering quality care.

For Quartz Health Plan, simplifying the member journey and working closely with its provider owners have been two areas of focus, according to Christina Ott, chief growth officer. Formed by the 2017 combination of Gundersen Health Plan, UnityPoint Health and Physicians Plus Insurance Corp., and then rebranded as Quartz, the insurer’s MA-PD contract serving enrollees in select counties of Minnesota has earned 5 stars for the 16th time, according to Ott. Quartz also has MA membership in Illinois, Iowa and Wisconsin; Advocate Aurora Health joined as a minority owner in 2021. While Quartz is focused on selling its products where its provider owners can best serve seniors and “has a narrower network than most,” it does have other providers in the network and it “aligns with providers in ways that work for the individual,” she tells AIS Health, a division of MMIT.