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Elevance second insurer to win star ratings lawsuit

CMS has been ordered to redetermine the star ratings, which Elevance says should be higher.

Susan Morse, Executive Editor

Photo: Kittiphan Teerawattanakul Eye Em/Getty Images

Elevance is the second health insurer to win a case against the federal government over Medicare Advantage payments.

On June 7, United States District Court Judge Randolph Moss for the District of Columbia, Elevance's motion for summary judgment and denied the Department of Health and Human Services' cross motion for summary judgment.听

The bottom line is that the 2024 Medicare Star Ratings for Blue Cross Blue Shield of Georgia are set aside and the Centers for Medicare and Medicaid Services is ordered to redetermine those ratings in a manner consistent with the ruling.

The plan is expected to get a boost in 2024 star ratings, from 3 stars to 3.5 stars.

MA star ratings affect beneficiary choices through the Medicare Plan Finder and also bonuses for plans.

WHY THIS MATTERS听

Elevance took issue with CMS's decision to change the methodology to determine star ratings, which included recalculating the 2023 cut points.

It argued that, because CMS used simulated 2023 cut points instead of the actual 2023 cut points, several of its insurance plans received lower star ratings than they otherwise would have received.听

Elevance maintains, for example, that its overall star rating would have been 3.5 stars, rather than 3 stars, had the actual 2023 cut points been used for the 2024 guardrails.听

Elevance said that by calculating the 2024 star ratings based on simulated 2023 cut points using the Tukey statistical methodology, CMS created cut points that were more than 5 percentage points higher than the actual 2023 cut points.听

Elevance, formerly Anthem, and six of its affiliated entities brought the lawsuit over the methodology.

Elevance said CMS assigned star ratings to certain plans for 2024 that was contrary to the agency's own regulations, and was 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 ratings program was first considered in a formal rulemaking process, the clustering algorithm consisted of only one step: hierarchal clustering. That method, however, was viewed as imperfect, because it did not account for outlier scores, and did not provide sufficient stability for the participating Medicare insurers, according to the court.

To address these concerns, CMS made changes to the clustering methodology, including adding the Tukey outlier deletion methodology.

On March 8, Elevance moved for summary judgment, and, on March 29, CMS cross-moved for summary judgment.

Both parties requested expedited consideration of their competing motions for summary judgment in light of insurers' impending deadline to submit their bids to CMS for the upcoming contract year.听

The court granted that request and held oral arguments on May 29.

THE LARGER TREND

Earlier this month, SCAN Health Plan won a similar lawsuit听against the Department of Health and Human Services over the way the government calculated Medicare Advantage Star Ratings for 2024.

The ruling means SCAN will get the $250 million bonus it was initially denied, and that other Medicare Advantage plans could also get federal dollars that were denied to them due to lower-than-expected star ratings.

Email the writer: SMorse@himss.org