Elevance Health will receive higher Medicare Advantage star ratings for 2024 after federal regulators agreed to take another look at the company's scores.
Elevance, which manages Blue Cross Blue Shield plans in 14 states, will receive an additional $190 million after the Centers for Medicare and Medicaid Services agreed to revise four of its contract scores, according to a Securities and Exchange Commission filing Monday.
The company estimated that 49% of its Medicare Advantage membership will be enrolled in plans rated at least four out of five stars, an improvement from the 34% it reported when the ratings were issued in October. Insurers receive the maximum bonus for reaching at least four stars in the federal quality ratings program, which they rely on to subsidize zero-premium plans and generous supplemental benefits.
Related: Elevance sues over Medicare Advantage star ratings
Elevance declined to comment on why CMS recalculated its scores, referring Modern Healthcare to its SEC filing.
CMS did not immediately respond to interview requests.
Over the past few years, CMS has taken a more critical look at the federal quality ratings program and implemented several changes that make it harder for plans to reach the coveted four-star threshold. The changes come as federal payments to the program continue to increase, with CMS' star bonuses ballooning nearly 30% to about $12.8 billion in 2023, according to KFF.
For the current plan year, 42% of Medicare Advantage plans achieved at least four stars, down from 51% in 2023, CMS reported in October. Elevance faced the steepest decline in scores among large insurers. In addition to the loss of quality bonus payments, federal regulators will bar the company from expanding one of its contracts in 2025 because of low star rating scores. Before the new ratings review, the company said the drop equated to a $500 million loss in revenue.
The insurer sued CMS in December, alleging regulators' changes to the program did not follow appropriate statutory procedures and that agency's "secret shopper program" was flawed. In the complaint, Elevance alleged that a CMS secret shopper incorrectly reported that the insurer failed to make connections to an appropriate representative, which led to a $190 million loss in bonus payments. The company called for regulators to undo technical changes to the program, recalculate scores and reissue bonus payments.
SCAN Health Plan, which sells Medicare Advantage plans in five states, also sued CMS in December over its star ratings scores, and made similar allegations. SCAN did not immediately respond to an interview request about the status of its lawsuit and whether CMS agreed to revise its scores.
