Three Medicare Advantage plans lost their fight to require CMS to collect data on patient care and satisfaction during the COVID-19 pandemic, with a federal judge ruling that the agency did not need to ask Congress before deciding to suspend collection.
The U.S. District Court for the District of Columbia on Tuesday granted HHS' motion for summary judgment. The case stems from an April 2020 interim final rule that said CMS would rely on 2020 information with regard to the Healthcare Effectiveness Data and Information Set, or HEDIS, and the Consumer Assessment of Healthcare Providers and Systems, or CAHPS, when calculating Star ratings for the plans. The rule was made "because data collection was unsafe and would divert resources from patients" during the pandemic, according to the opinion.
Plans that score at least four out of five stars receive a 5% increase to their CMS benchmark, which is the maximum amount the federal government will pay, plus other advantages. Those extra dollars can be used to fund extra benefits for seniors, though it's not a requirement. According to the Medicare Payment Advisory Commission, the quality bonus payments add about $6 billion to Medicare program expenditures each year.
By relying on outdated information, three Medicare Advantage plans—AvMed, Prominence HealthFirst and Prominence HealthFirst of Texas—contend that they lost their ability to improve their annual Star score and improve their reimbursement. AvMed and Prominence HealthFirst's ratings declined year-over-year, while Prominence HealthFirst of Texas received a "low performing" rating for the third year in a row. U.S. Senior District Court Judge John Bates conceded HHS' action could have impacted insurers' financial situation.
"CMS' decision to halt data collection led CMS to use old CAHPS and HEDIS data, which plausibly lowered plaintiffs' Star ratings—causing plaintiffs to lose millions of dollars in future payments," Bates wrote.
In November 2020, Medicare Advantage plans sued HHS, alleging department officials did not have the authority to suspend collection of patient quality and satisfaction data without first consulting Congress. They proposed that CMS use 2020 Star ratings instead of calculating new ratings, or calculate 2021 scores but not permit any plan's rating to fall. If CMS had done that, it would have caused "grade inflation" among Medicare Advantage plans, "making plans appear higher-performing on average than they really were and forcing CMS to increase total payments to plans," Bates wrote. It also could have inflated perception of plans to prospective enrollees.
"There is no reason to throw out this new data—it conveys useful information," Bates wrote. "Likewise, there is no reason to hold plans harmless."
Because the agency did not call for collection of new information, HHS officials did not need to ask Congress permission for suspending collection of old, the opinion said.
In a statement, Prominence Health Plan said it was disappointed with the ruling and still believed CMS' change was inappropriate. The insurer, which is a subsidiary of Universal Health Services, said it was in the process of determining its next steps.
"Prominence made significant investments and improvements in its quality metrics based upon CMS's prior guidance," a spokesperson wrote in an email. "The methodology changes precluded these improvements from being taken into account."
AvMed did not respond to an interview request.
