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CMS is recalculating Medicare Advantage star ratings in 2024
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Based on two lawsuits on behalf of insurers, the Centers for Medicare and Medicaid Services is recalculating 2024 Medicare Advantage star ratings for quality bonus payment purposes.
CMS did the announcement On thursday.
“In light of the decisions issued in SCAN Health Plan v. Department of Health and Human Services and Elevance Health v. Department of Health and Human Services, CMS will recalculate and update contract year 2024 (CY 2024) star ratings used for contract year 2025 (CY 2025) quality bonus payments for impacted contracts, as required by the court appeal,” CMS said in a statement. “CMS will recalculate the star ratings for CY 2024 using the actual cutoff points established for the CY 2023 star ratings, not the CY 2023 star ratings cutoff points calculated after the removal of Tukey outliers as a basis for safeguards for fiscal year 2024 calculations.”
Additionally, CMS said it would recalculate star ratings for contracts offered by other Medicare Advantage organizations that would have benefited from a recalculation of the CY 2024 star ratings used for CY 2025 quality bonus payments, applying the methodology outlined in court decisions to ensure consistent treatment across the program.
Under the new methodology, star ratings will not decrease. If the recalculation results in a contract’s QBP rating being lowered compared to previously assigned ratings, CMS is not implementing the change and those contracts will be held harmless in this recalculation, CMS said. A contract’s QBP rating will not be lowered by CMS as a result of this recalculation.
MA contracts with increases in their quality bonus pay ratings – those that increase from 3 to 3.5 stars to 4 stars and from 4 stars to 4.5 stars – will have a limited opportunity to resubmit their proposals for the year of 2025 contract, including proposal pricing tools, plan benefit packages and forms. Plans must contact CMS by June 18, with a deadline to submit revised proposals by June 28. CMS will open the gates of HPMS on June 26th.
Actuarial certification for any resubmission of proposals must be completed by July 3.
All MA contracts can view their updated 2025 QBP ratings and total beneficiary cost (TBC) data in the Health Plan Management System (HPMS).
The Medicare Plan Finder for consumers to review plans will be updated in the coming weeks.
WHY DOES IT MATTER
CMS has not made a decision on whether to appeal these decisions. Its decision, CMS said, to recalculate the 2024 star ratings has no bearing on CMS’s potential exercise of its right to appeal those decisions.
The decisions in SCAN Health Plan v. Department of Health & Human Services and Elevance Health, Inc. v. Becerra were issued on June 3 and 7, respectively.
On June 7, a federal court partially granted and partially denied Elevance’s decision to motion for summary judgment, and denied the Department of Health and Human Services’ cross motion for summary judgment.
Health SCAN decision means SCAN will receive the $250 million bonus it was initially denied due to lower-than-expected star ratings.
CMS offers additional financing for plans with higher star ratings. These higher-rated plans can then use the funds to reduce costs for their beneficiaries and attract more consumers. Star ratings are released in October.
THE BIGGEST TREND
Fewer Medicare Advantage plans achieved the 5-star rating for 2024, and many blamed regulatory changes and the Tukey Outlier Rule, a change in the calculation of 2024 star ratings.
The Tukey Outlier rule represents the upper and lower limits of a data set. In June 2020, CMS decided to remove these outliers from the raw data before calculating cutoffs. The Tukey Outlier rule was first implemented in October 2023 for the 2,024 star ratings.
A Guardrail rule implemented in the 2023 star ratings should increase the predictability of cutoffs.
But CMS waived application of the Guardrail Rule for one year. Instead of applying the Guardrail Rule to the previous year’s actual cutpoints, it applied the Guardrail Rule to the previous year’s hypothetical cutpoints, which it would calculate using the previous year’s data with the Tukey outliers removed.
As a result, removing Tukey’s outliers resulted in significant changes to some cutoffs and star ratings.
Email the writer: SMorse@himss.org