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Stars Redo Boosts 47 Contracts’ Ratings

Centers for Medicare and Medicaid Services’ (CMS) data show that 47 contracts received recalculated 2026 Medicare Advantage that are higher than the original calculation. Thirty-six of those contracts secured at least four out of five stars to qualify for a quality bonus of 5%. Aetna and United Healthcare are two big plans that collected more revenue from the rescoring.

The CMS Recalculation has driven several lawsuits. Elevance Health argues some of its contracts should be calculated based on what Clover Health was (CMS’ recalculation differed for other plans). Scan and Alignment Healthcare argue that they should be rated on an even more steamlined set of measures because CMS ignored part of the Clover ruling.

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#cms #stars #quality #medicareadvantage

https://www.modernhealthcare.com/insurance/mh-aetna-unitedhealthcare-medicare-advantage-star-ratings

CMS Appeals Clover Decision

Two major things in the past few days:

The Centers for Medicare and Medicaid Services (CMS) updated the Medicare Plan Finder website and landscape files with the “better of” recalculated measures vs. original. This tells us exactly how many contracts got increases and impacts. Previous estimates suggested about 10% got an increase, with others the same or held harmless.

CMS has appealed the Clover decision. We don’t have details yet but I will update as more is known. This was totally expected. We will see if they have appealed on both the statutory and regulatory deficiencies or just regulatory.

Additional articles: https://www.fiercehealthcare.com/regulatory/cms-appeals-court-decision-behind-2026-ma-star-ratings-recalculations and https://www.healthcaredive.com/news/cms-appeals-clover-health-medicare-advantage-stars-lawsuit-cms/826003/ and https://www.beckerspayer.com/legal/cms-appeals-clovers-medicare-advantage-star-ratings-win/

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#cms #medicadvantage #stars #quality

https://www.modernhealthcare.com/insurance/mh-cms-appeal-clover-medicare-advantage-ratings/

CMS Proposes Additional Medicaid Provider Tax Rule

Based on the passage of the One Big Beautiful Bill Act (OBBBA), the Centers for Medicare and Medicaid Services (CMS) proposed another rule to implement certain Medicaid provider tax changes.

The taxes, which help fund state matches for Medicaid spending, are used in almost all states. Under the OBBBA, beginning Oct. 1, all states are prohibited from imposing new provider taxes or increasing ones in effect on or after July 4, 2025. State “hold harmless” allowances are replaced by provider- and state-specific thresholds based on taxes that were effective July 4, 2025.

The proposed rule would implement the legislation reducing the indirect hold harmless threshold by 0.5 percentage points every year from 2028 to 2032, when the thresholds reach 3.5% — the allowable levy.

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#medicaid #providertaxes

https://www.modernhealthcare.com/politics-regulation/mh-cms-medicaid-provider-tax-restrictions/

New Poll Puts Healthcare Affordability As Top Of Mind

Recent polling by healthcare policy group KFF says healthcare affordability is top of mind for voters going into the midterms. KFF says that a majority of Democratic and independent voters say it is “extremely important” that candidates talk about healthcare costs (60% and 55%), with 55% of Republican voters saying it is “extremely important” for candidates to discuss fraud in government health programs. 

Across party lines, six in 10 adults say they are “very” (27%) or “somewhat worried” (35%) about affording healthcare costs for themselves and their families.

In other news, a new bill would create the Medicare Exchange health plan, a government-run public health insurance option on the Exchanges. The bill would also permanently extend the expired enhanced premium subsidies. The public plan would be at the Silver and Gold metal tier levels, waive all cost-sharing for primary care, and reimburse providers at traditional Medicare rates. Providers in Medicare and Medicaid would be obligated to participate.

Other healthcare bills introduced in anticipation of the election:

• A Medicare physician payment reform
• Improving transparency in Medicare Advantage (MA) prior authorization
• Medical loss ratio transparency in MA
• Provider price transparency
• Workforce initiatives

As well, Delaware Gov. Matt Meyer signed three healthcare bills expanding charity care, delaying hospital price caps, and temporarily blocking private equity healthcare acquisitions on non-profit hospitals.

Additional article: https://www.beckerspayer.com/payer/aca/proposed-bill-would-create-medicare-exchange-plan-make-enhanced-aca-subsidies-permanent/ and https://www.healthcaredive.com/news/doctor-pay-price-transparency-congress-healthcare-agenda-bills-legislation/825457/ and https://www.beckershospitalreview.com/finance/delaware-expands-charity-care-delays-hospital-price-caps-3-things-to-know/

#affordability #healthcare #coverage #exchanges #hospitals #privateequity

https://www.fiercehealthcare.com/regulatory/healthcare-affordability-key-issue-voters-heading-2026-midterms

Health Plans Backing Away From Voluntary PA Reforms

Just one year after promising major prior authorization (PA) reforms on a voluntary basis, some health plans appear to be backing away from the commitments to the Trump administration that have been heavily touted by both plans and regulators. Some plans have been resistant to proceed on the pledge to implement certain reforms.

Critics says progress has been slow despite health plan trade group AHIP claiming 6.5 million prior authorizations for patients—equal to an 11% reduction – have been eliminated. Critics also say claims denials are on the rise. The administration threatened regulatory action if plans did not agree to come to the table with reforms. Bills on PA reform appear to be moving in Congress.

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Additional article: https://www.fiercehealthcare.com/payers/insurers-hedge-trump-backed-pledge-improve-denials-process

#healthplans #priorauthorization

https://www.modernhealthcare.com/insurance/mh-prior-authorization-reform-pledge-insurers-pullback/

UnitedHealth Raises Guidance As Profits Spike

UnitedHealth reported a profit spike to $5.5 billion in Q2 2026, driven by the recovery in its insurance unit, UnitedHealthcare. As well, United’s Optum services business had a nice recovery. UnitedHealthcare posted an 86.7% medical loss ratio (MLR) in Q2, improving year over year.

Medicare Advantage (MA) turned around as well. Costs are running high but below the 10% it projected. The company expects its Medicare plans to generate a 3% operating margin this year. United lost a planned 965,000 members in a retrenchment, but was somewhat lower than the 1.1 million expected.

United urged Congress and the administration to reform what it says is a broken No Surprises Act (NSA) arbitration process that is driving prices higher.

Additional articles: https://www.healthcaredive.com/news/unitedhealth-q2-results-beat-2026-guidance-raise/825385/ and https://www.beckerspayer.com/payer/unitedhealthcare-no-surprises-arbitration-system-needs-to-be-reformed/ and https://www.beckerspayer.com/financial/unitedhealth-posts-5-5b-profit-in-q2/ and https://www.modernhealthcare.com/insurance/mh-unitedhealth-earnings-guidance/

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#healthplans #margins #unitedhealthcare

https://www.modernhealthcare.com/insurance/mh-unitedhealth-earnings-unitedhealthcare-medicare-optum/

Elevance Stumbles A Bit In Q2 But Recovering

Elevance Health is kicking off another round of quarterly earnings results for health plans. The results are a mixed bag – with ongoing signs of recovery but signals that challenges and uncertainty remain for big insurers and plans in general. Elevance posted $1.5 billion in profit for Q2 and revenue of $50.5 billion, but profit was down from Q2 2025. Elevance is still meeting guidance to investors (and is upping it), but investors wanted more.

Here are some of the troubling signs, which are expected in other big plans too for Q2.

• The medical loss ratio was 89.7% in Q2, with medical costs continuing to rise.
• Elevance will exit the D.C. Medicaid market and may exit more due to the vulnerability in that line and major cutbacks from the One Big Beautiful Bill Act (OBBBA). This could continue the trend of a mismatch between rates and risk selection over time.
• In general, they have shed Exchange lives like others and this likely helped with costs and overall MLR.

Some good news is the settlement on Medicare Advantage (MA) risk adjustment. Elevance will face no sanctions.

Additional articles: https://www.fiercehealthcare.com/payers/elevance-healths-stock-slides-premarket-even-it-beats-street-15b-q2-profit and https://www.modernhealthcare.com/insurance/mh-elevance-health-earnings-state-medicaid-markets/ and https://www.healthcaredive.com/news/elevance-medicaid-exits-q2-2025-2026-earnings-raise/825217/ and https://www.beckerspayer.com/financial/elevance-reports-1-5b-profit-in-q2-membership-dips/

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#healthplans #margins #medicareadvantage #elevancehealth

https://www.modernhealthcare.com/insurance/mh-elevance-earnings-profit-guidance

Trump Admin Proposes Major Medicare FFS Reform Rule

The Trump administration continues its efforts to reform Medicare and make its mark on healthcare reform. A new Medicare fee-for-service (FFS) reform proposal will significantly impact many areas of the sprawling traditional program.

The proposed rule would make changes to Medicare accountable care organizations (ACOs), transition away from the physician Merit-based Incentive Payment System (MIPS) to an enhanced value-based care (VBC) pathways program, and update physician payment policies to better reflect modern clinical practice.

In part the ACO changes would establish more predictable spending targets to improve planning and participation as well as increase some shared saving rates and make benchmark and other calculation adjustments. Notable quality reporting changes are also proposed.

The MIPS successor would also have three new value-based pathways on diabetes, hypertension, and hospital-based care.

Physician reimbursement would generally shrink a bit in 2027. Remote patient monitoring would also be substantially reformed and reined in.

Additional articles: https://www.cms.gov/newsroom/press-releases/cms-proposes-transformational-medicare-reforms-expand-accountable-care-modernize-physician-payment and https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2027-medicare-physician-fee-schedule-proposed-rule-cms-1848-p-medicare-shared and https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2027-medicare-physician-fee-schedule-proposed-rule

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#medicare #acos #physicians

https://www.modernhealthcare.com/politics-regulation/mh-cms-medicare-physician-pay-2027

Another Stars Lawsuit — This Time From Alignment

High-performing MA plan Alignment Healthcare has joined the lawsuit fray on the Clover decision. Alignment has the same argument as Scan. Both indicated CMS erred by including ten measures in the CMS Recalculation scenario when a judge ruled these measures did not go through the correct regulatory vetting process.

Alignment says three of its contracts currently rated 4.0 should be at 4.5, netting an additional $50 million.

If you are adding up the numbers from lawsuits, here is the total:

–Clover = $120M
–Elevance Health = $115M
–Scan = $125M
–Alignment = $50M

TOTAL = $410M

I had earlier estimated the total costs to be over $1 billion.

Alignment lawsuit: https://lnkd.in/entBMgHn

#cms #stars #quality #medicareadvantage

https://www.healthcaredive.com/news/scan-alignment-sue-cms-ma-star-ratings-recalculation-clover-lawsuits/825091

Scan Now Sues Over Clover Lawsuit And CMS Recalculations

A new lawsuit has been filed by non-profit Scan Health Plan. Scan argues that CMS inappropriately recalculated Star Rating for 2026 after the Clover Health decision. Clover received an exact calculation based on the judge’s ruling throwing out 20 measures based on two legal arguments (10 measures were not statutorily allowed and another 10 measures were not properly promulgated via regulation). However, CMS’ recalculation measure set adopted part of the ruling by throwing out some of the judge’s measures, while retaining others. As well, CMS removed some measures not even struck by the court.

Elevance Health was the first to sue, arguing it is entitled to a calculation based exactly on what the judge ruled for Clover on the 20 measures. Scan’s suit appears different. Scan argues the court should force CMS to remove the ten measures that CMS failed to promulgate by regulation. That meant two of Scan’s contracts received 4s instead of 4.5s, costing the plan $125M in 2027. Scan does not address whether it also wants some measures removed by CMS restored. If not, Scan’s argument is much like what I said in a recent blog was a “Clover Strict” reading of the judge’s ruling — not the “Clover Specific” measure ruling. Therefore, as I wrote (and is underscored in the Scan lawsuit), we have at least four potential ratings scenarios before us:

–“Original Measure Ratings” (45)
–“Clover Specific” ruling directing a recalculation based on the measures Clover sued on (25)
–“Clover Strict” reading of the lawsuit striking all but HEDIS, CAHPS and HOS along with those that failed notice and promulgation provisions (17)
–“CMS Recalculation” that was implemented by the agency for all contracts but Clover’s main one (27)

While the 25 and 27 counts look close, the actual measures are very different — just 17 measures are common between Clover Specific and CMS Recalculation.

This is getting interesting. To keep it all straight, I have created a tracker of possible measure scenarios from SY 2026 to SY 2029. I assume little chance of statutory and regulatory cure for SY 2026 through SY 2028 and eventually CMS or congressional fixes that keep in place the CMS restructure in SY 2029. It also assumes that new measures and removals hitting in SY 2027 through SY 2029 would be deemed regulatory sufficient, which is an open question. Scan goes in depth on how the Clover judge was right to say anything outside the actual regulation (e.g., Technical Notes and Announcements) do not pass regulatory muster. You can email me for the tracker via the website page under Contact.

My most recent blog explaining what is happening – written before the Scan suit but still on target: https://www.healthcarelabyrinth.com/more-clover-lawsuit-fallout-the-balkanization-of-star-ratings/

#cms #medicareadvantage #stars #quality

The Scan lawsuit: https://litigationtracker.law.georgetown.edu/wp-content/uploads/2026/07/SCAN-Health-Plan-v.-HHS_2026.07.08_COMPLAINT.pdf