Elevance, Scan boosted in Medicare Advantage stars redo

The Centers for Medicare and Medicaid Services has completed its recalculations of Medicare Advantage star ratings for 2024, and Elevance Health and Scan Health Plan are among the insurers that saw the biggest gains.

CMS issued the revised quality ratings Tuesday, bringing to a close a saga that began with a regulation four years ago, moved into the courts and then finally back to the agency. CMS announced the original scores under the Star Ratings program last October, but re-ran the numbers after two judges ruled the regulator unlawfully altered its methodology.

Related: Elevance, Aetna among insurers to benefit from higher star ratings

The agency recalculated scores for 40 insurers holding 61 Medicare Advantage contracts, according to a Modern Healthcare analysis of CMS data. The number of people enrolled in plans that earned at least four out of five stars increased 3.5% to 25.9 million enrollees. Eleven more companies will receive the maximum quality bonus payment next year because of the updated scores.

CMS' revisions had a greater impact on smaller insurers such as Scan Health Plan and Baylor Scott & White Health Plan than on large companies such as UnitedHealth Group and Humana.

Scan Health Plan, Elevance Health and Cigna have the greatest proportion of additional enrollees covered under plans rated at least four stars. Scan Health Plan projects the new ratings will generate $250 million more in quality bonus payments this year. Elevance Health expects to pocket at least $190 million in additional bonuses.

Market leaders UnitedHealthcare, Humana and CVS Health subsidiary Aetna are mostly unaffected. Humana's ratings are unchanged and UnitedHealthcare's and Aetna's gains represent less than 1% of their memberships. These companies collectively hold 59% of the Medicare Advantage market by enrollment, the Chartis Group reported in March.

Congress developed the Medicare Advantage Star Ratings program to encourage quality and steer beneficiaries to the best plans in a crowded market. Research has shown few consumers make decisions based on these scores, but star ratings have major implications for insurers that rely on bonuses to finance supplemental benefits and zero-premium plans. CMS paid insurers at least $12.8 billion in bonuses last year, according to KFF.

The share of Centene Medicare Advantage members in plans rated at least 4 stars increased 9.9% under the new scores, which marks a small win for a company engaged in a multiyear effort to boost its Star Ratings performance. Centene aims to have 85% of Medicare Advantage enrollees in plans rated at least 3.5 by October 2025.

Blue Cross and Blue Shield of Kansas City received a massive boost in its star ratings after qualifying for very little bonus money under the October 2023 scores. After revisions, 88.6% of its members are now in plans that scored at least four. Last month, the company announced it would exit Medicare Advantage next year, partially citing the regulatory environment.

Medicare Advantage carriers that received higher scores are now eligible for payment bonuses, or larger bonuses than originally granted. CMS declined to comment on the financial implications of the revised ratings or how it would calculate star ratings next year. The agency is scheduled to release new scores in October.

These new star ratings derive from a long-running dispute between CMS and the insurance industry over how the 2024 quality scores were calculated.

Scan Health Plan and Elevance Health sued CMS last year alleging it did not follow federal rulemaking standards when modifying how scores are calculated. Last month, two federal courts sided with the insurers and ruled that CMS violated the Administrative Procedure Act of 1946. CMS then redid the scores and gave affected companies more time to submit bids for 2025. The agency has not decided whether to appeal the lawsuits, a spokesperson said in a statement.

“We’re thrilled to be reinstated as a 4+ star plan, marking 11 years in a row for Scan," CEO Dr. Sachin Jain said in a statement. "Regarding the industrywide recalculation, we’re proud of the bold action we took, which resulted in a movement that will help preserve benefits for seniors across the country," he said.

“We are pleased to see our Georgia [Medicare Advantage prescription drug plan] achieve a 4-star rating," a Cigna spokesperson said in a statement. "We now have nearly three-quarters of our customers in a 4-star or above plan for 2024, demonstrating our continued commitment to providing high-quality support to our Medicare customers.”

"Although Centers Plan for Healthy Living strives for five stars at all times, the company is proud of this four-plus star rating,” a spokesperson said in a statement.

The other health insurance companies named in this article did not respond to interview requests.

Lauren Berryman contributed to this story.