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Elevance is the second insurer to win the star rating process
Photo: Kittiphan Teerawattanakul Eye Em/Getty Images
Elevance is the second health insurer to win a lawsuit against the federal government over Medicare Advantage payments.
On June 7, United States District Court Judge Randolph Moss of the District of Columbia, granted in part and denied in part Elevance’s motion for summary judgment and denied the Department of Health and Human Services’ cross-motion for summary judgment.
The end result is that the 2024 Medicare star ratings for Blue Cross Blue Shield of Georgia are vacated and the Centers for Medicare and Medicaid Services is required to redetermine these ratings in a manner consistent with the ruling.
The plan is expected to increase the star rating in 2024 from 3 stars to 3.5 stars.
MA star ratings affect beneficiaries’ choices through the Medicare Plan Finder as well as plan bonuses.
WHY DOES IT MATTER
Elevance questioned CMS’s decision to change the methodology for determining star ratings, which included recalculating the 2023 cutoffs.
It argued that because CMS used simulated 2023 cutoffs rather than actual 2023 cutoffs, several of its insurance plans received lower star ratings than they would have otherwise received.
Elevance claims, for example, that its overall star rating would have been 3.5 stars instead of 3 stars if the actual 2023 cutoffs had been used for the 2024 guardrails.
Elevance said that by calculating 2024 star ratings based on simulated 2023 cutoffs using the Tukey statistical methodology, CMS created cutoffs that were more than 5 percentage points higher than the actual 2023 cutoffs.
Elevance, formerly Anthem, and six of its affiliated entities filed the lawsuit over the methodology.
Elevance said CMS assigned star ratings to certain plans for 2024 that were contrary to the agency’s own regulations and were therefore arbitrary and capricious.
The methodology used by CMS to calculate each year’s star ratings has changed, with each change going through a formal rulemaking process before being implemented.
When the star rating program was first considered in a formal regulatory process, the clustering algorithm consisted of just one step: hierarchical clustering. That method, however, was found to be flawed because it did not take into account outlier scores and did not provide sufficient stability for insurers participating in Medicare, according to the court.
To address these concerns, CMS made changes to the grouping methodology, including the addition of the Tukey outlier exclusion methodology.
On March 8, Elevance moved for summary judgment, and on March 29, CMS cross-moved for summary judgment.
Both parties requested expedited review of their competing motions for summary judgment in light of the insurers’ looming deadline to submit their proposals to CMS for the next contract year.
The court granted the request and held oral arguments on May 29.
THE BIGGEST TREND
Earlier this month, the SCAN Health Plan won a similar case against Department of Health and Human Services about how the government calculated Medicare Advantage star ratings for 2024.
The decision means that SCAN will receive the $250 million bonus it was initially denied, and that other Medicare Advantage plans will also be able to receive federal dollars they were denied due to lower-than-expected star ratings.
Send an email to the writer: SMorse@himss.org