Dive Brief:
The Biden administration is moving to lessen the importance of a controversial metric used to calculate valuable Medicare Advantage star ratings that’s been at the center of recent lawsuits.
UnitedHealthcare, Centene and Humana have all sued the government this fall for downgrading their quality scores based on assessments of their customer support centers. Payers argued the measure had an outsized impact on final star ratings, and it seems that regulators agree.
“We have already put in place that [the call center metric] is going to have a smaller weighting on star ratings moving forward,” CMS Medicare Director Meena Seshamani said Wednesday at the Milken Institute’s Future of Health Summit in Washington, D.C.
Dive Insight:
Major insurers have turned to the courts to try and increase their 2025 star ratings after the Biden administration published scores last month that were lower than what payers — and their investors — had wanted.
Since then, MA giants UnitedHealthcare, Humana, Centene and Elevance have all sued the CMS over their stars. Three of those cases hinge on regulators’ assessment of their call centers.
UnitedHealth’s complaint argues that the CMS arbitrarily downgraded its stars — potentially costing the insurer millions of dollars — based on one customer support phone call that lasted less than ten minutes. Centene is also accusing the CMS of mishandling a “secret shopper” call meant to assess the quality of its customer support center, which could cost the insurer $73 million in revenue.
Humana’s lawsuit is broader in scale, but also cites receiving lower star ratings based on three phone calls to customer service centers.
However, the CMS is working to reduce the importance of those call center scores, according to Seshamani’s comments. The changes were finalized in an April 2023 rule, to go into effect for the 2026 star ratings, a CMS spokesperson said.
The CMS is “constantly looking at the methodology” for calculating star ratings, but “sometimes it just takes time for these things to work their way through,” Seshamani said. “I think there is a huge opportunity to continue to evaluate how star ratings can actually reflect quality of care.”
Specifically, beginning in 2026 roughly 60% of a plan’s overall star rating will come from process, outcome and improvement measures, while 40% will come from patient experience and access measures, according to the CMS spokesperson.
The change in weighting results in a decrease in the weight of the call center measures from four to two.
Star ratings are meant to serve as a measure of plan quality to help seniors compare coverage, but cuts to star ratings generate significant hullabaloo because the scores also directly impact the financial success of a plan.
That’s because plans with higher ratings receive generous bonuses from the federal government, and are allowed to bid against a higher benchmark, giving them a competitive advantage against peers in their markets.
Those benefits can stack significantly.
Humana, for example, could lose upwards of $1 billion in revenue in 2026 after its star ratings plummeted, according to analysts. Only 25% of Humana’s MA members will be in a plan with four stars or above next year, down from 94% this year.
Average star ratings have declined for several years as regulators updated methodology and pandemic-era changes expired, jeopardizing the MA revenue insurers bring in. For next year, about 40% of MA plans with prescription drug coverage will earn four or more stars, compared with 42% this year and 68% in 2022.
Courts have recently sided with insurers looking to defend their scores from what industry views as arbitrary methodology changes from Washington.
Late last year, Elevance and Scan Health Plan sued over changes to ratings calculations that tanked their 2024 scores. As a result of the suits, the CMS was forced to redo payers’ ratings for this year — resulting in higher scores for more than 60 plans.
Editor’s note: This story has been updated with additional detail from the CMS.
