“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.

“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.

In advance of the Medicare Annual Election Period that starts on Oct. 15, preliminary Stars data became available in the CMS Medicare Plan Finder on Oct. 1. According to Humana’s filing with the U.S. Securities and Exchange Commission (SEC), contract H5216 fell from a 4.5-star rating to a 3.5-star rating for next year, which impacts quality bonus payments in 2026. That contract holds approximately 45% of Humana’s MA membership, including more than 90% of its group MA membership, Humana clarified.

After partnering with fledgling primary care startup Herself Health in January 2023, Blue Cross and Blue Shield of Minnesota recently announced a new contract structure that will incentivize the provider to drive “results-driven health solutions” for the Blues plan’s female Medicare Advantage population. Retroactive to Jan. 1, 2024, the partners have entered a value-based agreement that will include specific, measurable quality targets aimed at improving overall health outcomes for women.

Co-founded in 2022 by Kristen Helton, who previously led Amazon’s now-shuttered Amazon Care service for employees, Herself Health is a value-based health care technology company focused on delivering advanced primary care to women ages 65 and older. Since securing $7 million in seed round funding led by investment firm and founding partner Juxtapose, Herself Health has opened four clinics in the Twin Cities and is preparing to launch a fifth clinic in nearby Eagan, Minnesota.

As insurers await the October release of the 2025 Star Ratings, Chicago-based insurer Zing Health is pursuing a lawsuit stemming from CMS’s calculation of the 2024 Star Ratings, which prompted an unprecedented redo and resubmission of 2025 bids. Based on the third year of poor performance from that initial calculation, CMS in December 2023 informed Zing that it intended to terminate its Medicare Advantage Prescription Drug (MA-PD) contract serving approximately 3,000 enrollees at the end of this year. Although termination was avoided when CMS recalculated the 2024 Star Ratings, the insurer has a few demands of CMS for the “irreparable harm” caused by its initial calculation.

As part of CMS and the Biden administration’s overall framework for health equity, Medicare Advantage organizations’ ability to assess social risk factors (SRFs) and address care disparities has taken on new importance this year, thanks to the introduction of the Health Equity Index (HEI) to the Star Ratings. Starting in 2027, insurers won’t be penalized for failing to close gaps in care on certain quality measures, but qualifying Parts C and D sponsors will be rewarded if they perform well on the HEI, which CMS has described as a “methodological enhancement” to a subset of existing measures. Quality experts say readiness varies across the industry, and plans need to better understand where to target interventions and where they stack up against other plans that may qualify for the HEI.

And not all plans will qualify: Contracts that enroll a minimum threshold percentage of enrollees with social risk factors (SRFs) will be assessed and divided into three tiers of performance. Plans that perform in the top tier will receive 1 point, the middle tier will receive 0 points, and the bottom tier is assigned -1 point for each measure. After a series of calculations, the points translate to an HEI score that ultimately determines whether plans receive a reward that is applied to quality bonus payments for the 2027 Star Ratings.

The countdown is on until the 2025 Medicare Annual Election Period (AEP), which runs annually from Oct. 15 through Dec. 7, and Medicare Advantage plans are anxiously awaiting intel on how their competitors responded to upcoming Medicare Part D changes stemming from the Inflation Reduction Act (IRA). And while marketing rules remain largely unchanged this AEP — thanks to a district court putting CMS’s plans to restructure broker compensation on hold — the 2025 AEP is likely to throw plans more than a few curveballs.

Those were just some of the takeaways shared by industry veterans during an Aug. 22 webinar, “2025 AEP Sales Strategy in the New Regulated Environment,” which was co-hosted by EvolveNXT and Rebellis Group.

In a Paperwork Reduction Act (PRA) notice issued on Aug. 9, CMS informed Medicare Advantage organizations of its plans to collect more granular information on service-level decisions, including both initial determinations and appeals. Sources say this approach aligns with CMS’s continued focus on health equity and transparency, and it could lead to greater oversight of prior authorization decisions.

To plan sponsors, the transmittal should not have come as a surprise, given that the 2024 MA and Part D rule finalized in April affirmed CMS’s authority to collect detailed information from MA organizations and Part D plan sponsors. “An example of increased data collection could be service level data for all initial coverage decisions and plan level appeals, such as decision rationales for items, services, or diagnosis codes to have better line of sight on utilization management and prior authorization practices, among many other issues,” CMS stated in that rule.

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).