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Humana Sues CMS Over Star Scores

In the broadest lawsuit yet over Star scores, Humana has sued the Centers for Medicare and Medicaid Services (CMS) over its 2025 Star ratings. Lawsuits in 2024 from Scan and Elevance Health and in 2025 from United and Humana are relatively tame, arguing specific points of regulation or on a specific measure or measures. United has used the phrase “arbitrary and capricious” in detailing its lawsuit, but the Humana suit argues that in spades compared with United.

Humana argues that the entire Star program is administered in an arbitrary and capricious manner in violation of the administrative procedures act. The argument has much greater significance now due to the Supreme Court striking down the so-called Chevron deference precedent, which gave agencies fairly wide-ranging authority to set regulations and interpret ambiguities. Of note, the suit has been filed in the Northern District of Texas before Judge Reed O’Connor, who has a record of striking down agencies’ regulations.

Humana says CMS is not following its own regulations by not disclosing all Star ratings calculation criteria. Humana says CMS calculated two Star ratings measures incorrectly. United limited its suit to one customer service phone call that impacted its ratings. Humana’s lawsuit argues three phone calls were scored unfairly.

The Humana lawsuit is a gamble but not necessarily unreasonable. The argument is not wrong that CMS does not adequately disclose all the information plans need to calculate their own Stars to assess where they are. I would note the following, some of which are cited by Humana in its suit:

— Plans do not receive critical improvement measure information until Plan Preview 2 and have no time to assess it.

— The consumer assessment (CAHPS) and health outcome (HOS) surveys are fully anonymized and plans must trust CMS and its vendor to choose samples that meet enrollment criteria and then calculate all factors and scores correctly. The CAHPS case mix adjustment is a black box that few if any have been able to crack. CMS and vendors are protective of what they turn over to plans. In essence, MA plans are pretty blind on 12 measures (soon to be 14).

— There have been recent reports of inaccurate designation of Low Income Subsidy (LIS) individuals, which impacts the Categorical Adjustment Index (CAI) in Star and other critical Medicare Advantage (MA) operations.

— While certain Tukey information has been released, calculating cut points indeed has been a challenge. Humana says it could not replicate 60% of CMS’ cut point calculations after Star ratings were released. Humana says CMS was not disclosive when they asked the agency “to provide greater transparency into their policies, practices and calculations.” The Humana demand is entirely reasonable, especially in light of the fact that the agency was reprimanded by two federal court judges last year for blatantly ignoring regulations regarding guard rails that must be applied when setting cut points.

On the issue of call center measures, it seems evident that there is inconsistency in how CMS adjudicates TTY and foreign language services. The TTY and interpreter systems are prone to technological failure, not all the time the fault of the MA plan or its technology vendors. CMS’ secret shoppers do not always conduct the calls correctly and then penalize plans. Of all the measures, the call center measures are perhaps the most controversial and subject to interpretation. Elevance Health certainly proved the point last year. The high thresholds demanded and the sometimes punitive nature of CMS’ assessment practices are concerning.

Capitol Hill will look at the reasons behind falling Star scores as well as whether the government is getting its value from MA rebates from the Star program. I recently said that I support the concept of CMS running a continuous quality improvement program and have generally supported CMS on Stars. But Congress should also look at whether the Star program is being run fairly and transparently. Humana has made some very good points in its lawsuit.

In other news, CMS Chief Deputy Administrator Jon Blum fired a shot across MA plans’ bows today when he stated that MA plans must prove they deliver enough value for the extra federal reimbursement they receive. He specifically cited the funding disparity. He is alluding to MA overpayments as well as questions on supplemental benefit utilization. I expect 2026 regulations soon to be offered to promote certain reforms on the overpayment and other fronts, perhaps including Star. Of course, Blum and others continue to cite misleading statistics that MA is over-reimbursed by 22% to as much as 39%.

Additional articles: https://www.modernhealthcare.com/insurance/humana-medicare-advantage-star-ratings-lawsuit-cms and https://www.healthcaredive.com/news/humana-medicare-advantage-star-ratings-lawsuit-hhs/730387/ and https://insidehealthpolicy.com/daily-news/cms-official-calls-medicare-advantage-prove-value-amid-growing-concerns-over-payment-gap

(Some articles may require a subscription.)

#cms #medicareadvantage #stars

https://www.fiercehealthcare.com/payers/humana-joins-chorus-lawsuits-over-sinking-star-ratings

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CVS Ousts CEO Due To Financial Woes

CVS Health ousted CEO Karen Lynch and replaced her with another insider, PBM President David Joyner. CVS also announced that investors can no longer rely on previous guidance from the company in terms of financial performance in 2024.

CVS’ financial woes stem from its Aetna insurance business. It says its Aetna medical loss ratio (MLR) could hit 95.2% in Q3. This is stunnng given it has a substantial commercial line of business. CVS increased Medicare Advantage (MA) benefits phenomenally over the past few years and enrollment grew tremendously in 2024. This led to financial instability due to a number of inside and outside forces.

I followed Lynch and met her a few times as Aetna’s leader. I found her an innovative and strong executive. She was dealt a bad hand since becoming CEO in February 2021. She had to weather the COVID pandemic, artificial Star score inflation in MA that skewed benefits at many plans, and political challenges with pharmacy benefits managers (PBMs) and pharmacies. MA has seen a perfect storm of rate drops, Stars plummeting, and regulatory trends that have hit most of the big national insurers.

While I don’t know David Joyner, friends that do know him say he is savvy and has a keen financial and sales sense. He has had a long history in healthcare generally, at Aetna, and most recently at the PBM division of CVS, Caremark. There is no question he has a huge chore to right Aetna’s finances, battle Capitol Hill on attacks on the Big 3 PBMs, challenges with primary care investments, and more.

There is talk that CVS Health could be carved up in order to right itself. Time will tell.

I have a timely blog on Monday that discusses the troubles of big healthcare and what the future might hold.

Additional articles: https://www.modernhealthcare.com/insurance/analysts-cvs-health-karen-lynch-david-joyner-aetna and https://www.modernhealthcare.com/insurance/cvs-caremark-ceo-karen-lynch-david-joyner-aetna and https://www.managedhealthcareexecutive.com/view/karen-lynch-steps-down-as-ceo-of-cvs-health and https://www.healthcaredive.com/news/cvs-replaces-ceo-karen-lynch-caremark-head-david-joyner/730275/

(Some articles may require a subscription.)

#cvshealth #aetna #medicareadvantage

https://www.fiercehealthcare.com/payers/david-joyner-becomes-cvs-ceo-karen-lynch-steps-down

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Democratic Report Argues Medicare Advantage Plans Use AI To Reduce Post Acute Care

An incredibly biased report engineered by Sen. Richard Blumenthal, D-CT, finds that the country’s three largest Medicare Advantage (MA) insurers – United Healthcare, Humana, and Aetna — obstruct seniors’ ability to receive post-acute care. It says the companies use technology (perhaps AI algorithms) to reject prior authorization claims. The report finds that the three insurers denied claims for post-acute care at “far higher” rates than for other types of care. Humana’s denials in post-acute care were 16 times higher than its overall denial rates. UnitedHealthcare and CVS denials were three times higher.

I agree with the insurers that the report is sensationalistic. The report argues that at least two companies used AI and technology in denials. I do think a qualified professional should make the final clinical decision to deny a service.

But what is lost on the senator and the Centers for Medicare and Medicaid Servies (CMS) is that it is the proper role of managed care to scrutinize request for services. It stands to reason that inpatient coverage and post-acute care would be more scrutinized as they are very expensive. The comparison of denial rates of post-acute services to overall denials is simply ridiculous.

MA plans rightfully document savings against what is an unfettered fee-for-service (FFS) program. We should not apologize for that as the FFS system is uncontrolled and would bankrupt Medicare. Ironically, the report comes out just as a new CMS rule requires MA plans to follow the unfettered FFS program rules.

But the report is the latest sign that both CMS and Capitol Hill are coming after MA plans for major reforms.

Additional articles: https://www.fiercehealthcare.com/payers/unitedhealth-cvs-humana-increasingly-deploy-ai-and-deny-prior-auth-claims-senate-report

(Some articles may require a subscription.)

#medicareadvantage #priorauthorization #providers

https://www.modernhealthcare.com/politics-policy/unitedhealth-aetna-humana-prior-authorization-medicare-advantage-report

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Biden Leaving His Mark On Medicare Advantage

A very good article from Bridget Early in Modern Healthcare on the history of Medicare Advantage (MA) and how the Biden administration is leaving its mark on the program. I do take issue with the continual citing of what I think is a terribly biased overpayment figure (in this article $83 billion and I have seen even more ridiculous figures). But she has an extremely balanced approach and quotes both sides of the debate (some of the most qualified you can find) and reasonably speaks to the potential damage in the form of benefit reductions and geographic contraction that is occurring due to certain policies. It gives you a good feel for MA’s history and what is going on today.

The article does a good job at inventorying changes, including health equity, risk adjustment changes, supplemental benefit changes, marketing reform, and prior authorization restrictions. As you know, I do support some reforms in MA but feel CMS has been misguided recently on some changes they made to MA, which led to the benefit reductions and geographic contraction.

The article raises an interesting point on the careful balancing act regarding oversight of the industry. Despite some of my recent misgivings about regulatory policies, I have always and still do give credit to the Centers for Medicare and Medicaid Services (CMS) on being a good regulator, moving healthcare policy forward in a reasonable and accountable fashion.

(Article may require a subscription.)

#cms #medicareadvantage

https://www.modernhealthcare.com/politics-policy/joe-biden-medicare-advantage-cms-meena-seshamani

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Mixed Signals On Medicare Advantage Open Enrollment

The Medicare Advantage (MA) enrollment season officially kicked off today.

While the Kaiser Family Foundation (KFF) finds that MA plans are largely stable, it does note that there are some reductions impacting consumers. Some beneficaries may be moved automatically to other plans by their current insurers. Others will have to make an affirmative choice. KFF promises to have a full review but appears to be putting the same spin on things as the Centers for Medicare and Medicaid Services (CMS).

Others are saying that as many as 2 million will be displaced compared with the usual 100,000 each year. We covered some of the displacement yesterday for both MA and standalone Part D (PDP) plans. CNN correctly notes the displacement, citing an Oliver Wyman analysis that comes close to the 2 million number above. Oliver Wyman says more than 1.8 million MA members, or roughly 8% of those in non-group, non-special needs plans, are enrolled in policies that won’t be offered in 2025. It notes that about 1.3 million of them are currently enrolled in $0 premium plans. CNN also discusses higher drug deductibles. The Street also covers increases in Part D costs.

Becker’s points out some of the challenges: MA will shrink in around half of states, while options will stay the same or grow in the other half. In 22 states and Washington, D.C., there will be fewer MA plans available in 2025. At least 10 insurers exited MA markets for 2025 coverage. Nearly 30 health systems dropped some MA contracts for 2025.

Additional articles: https://www.kff.org/policy-watch/2025-medicare-advantage-plan-choices-are-stable-following-years-of-steady-growth/ and https://www.cnn.com/2024/10/14/health/medicare-advantage-plans-open-enrollment-2025/index.html and https://www.thestreet.com/finance/medicare-prices-set-to-jump-for-average-americans-heres-how

#medicareadvantage #healthplans

https://www.beckerspayer.com/payer/medicare-annual-enrollment-begins-10-notes.html

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Despite Star Problems, United And Humana Expected To Stay On Top

Analysts say that United Healthcare and Humana will likely maintain their top positions in Medicare Advantage (MA), do well on enrollment, and weather current fiscal storms despite lower Star ratings, slimmer benefits, and financial headwinds. At the same time, analysts say lower Star scores are a real risk for the industry. Other large plans will do well as well.

CVS Aetna has told investors it expects to shed about 10% of lives. Humana told investors it would lose about 5%.

Large plans did very poorly in Star in 2025, with limited exceptions.

Becker’s also ranks some of the largest MA plans by Star score for 2025.

Jenn Kerfoot had a great LinkedIn post discussing the plight of 223,952 MA members facing plan terminations or service area reductions in areas with the highest levels of socioeconomic need. They will need to select new plans and are among 2 million facing similar situations nationwide.

Jared Strock tells us on LinkedIn that most MA plan terminations were in local PPOs (1.2M or about 13% of the total L-PPO market), with HMOs at (600K or 3% of the HMO market). PFFS and regional PPOs, which have much smaller footprints, were massively downsized. The PPO downsizing is a sign that the popular product can be more costly than HMOs.

Brooks Conway tells us on LinkedIn that MA-Part D and standalone Part D benefits had numerous changes given cost pressures and the Part D changes in the Inflation Reduction Act (IRA). Many Part D deductibles were moved from $0. Brooks says, that of non-SNP MAPD plans that offered a $0 Part D deductible in 2024, a little over half will retain the $0 deductible moving into 2025. However, the majority are excluding generics from the deductible. The rest of the plans introduced a deductible. On the PDP side, there are more $0 deductible plans – likely due to the new premium stabilization program. Brooks also sees many new Chronic Care Special Needs Plans (C-SNPs) being introduced.

Adam Fein tells us on LinkedIn that, after he dove into a recent Kaiser Family Foundation analysis, he sees coincidental premium hikes of $35 – matching the subsidy in the new premium stabilization program. He also sees vanishing PDP plans — 709 in 2024 to 524 in 2025 (-26%).

Additional articles: https://www.beckerspayer.com/payer/payers-ranked-by-average-medicare-advantage-star-ratings-2025.html and https://www.linkedin.com/feed/update/urn:li:activity:7251593804967747584/ and https://www.linkedin.com/posts/jkerfoot_aep-medicareadvantage-activity-7251610254453440514-1zyu?utm_source=share&utm_medium=member_desktop and https://www.linkedin.com/feed/update/urn:li:activity:7248848305042984960/ .

(Some articles may require a subscription.)

#medicareadvantage #partd #pdp

https://www.modernhealthcare.com/insurance/2025-medicare-advantage-star-ratings-enrollment

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Winners And Losers From 2025 Medicare Advantage Star Year Announcement

I reported yesterday that there was overall bad news for the Medicare Advantage (MA) industry when 2025 Star Years came out. The percentage of contracts obtaining a 4 Star or greater rating dropped to about 40%. Just 62% of all Medicare Advantage Part D (MA-PD) enrollees will be in a 4 Star or greater contract. These are big drops from even a sluggish 2024 Star year.

There is always good news and bad news. Insurtechs Alignment Healthcare and Clover Health are celebrating their high-performing ratings.

The big plans have a mix of stories: Humana, Elevance Health, and United Healthcare saw declines. Aetna and Cigna held steady. Centene’s performance was still sub par. Kaiser Permanente now has all of its members to 4 Star or greater.

There were just seven 5-Star MA-PD contracts. There were 24 contracts that scored below 3 Star.

In other news, a 14-hospital system in Alabama and Tennessee is terming United Healthcare commercial and MA products.

Additional articles: and https://www.beckerspayer.com/payer/24-medicare-advantage-plans-rated-below-3-stars-2025 and html https://www.beckerspayer.com/contracting/14-hospital-system-splits-with-unitedhealthcare.html

#cms #stars #medicareadvantage #partd

https://www.fiercehealthcare.com/payers/star-ratings-2025-who-are-winners-and-losers

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Bad News On Medicare Advantage Star Ratings

The Centers for Medicare and Medicaid Services (CMS) announced 2025 Star ratings and the news was not good. The percentage of contracts obtaining a 4 Star or greater rating dropped to about 40%. Just 62% of all Medicare Advantage Part D (MA-PD) enrollees will be in a 4 Star or greater plan. These are big drops from even a sluggish 2024 Star year.

Humana saw the biggest drops among large national plans, with United and Elevance having some reductions and Centene continuing to score low. Aetna was roughly flat in terms of achievement. The poor Big Plan results drove the estimated enrollment in high-performing plans down. Big Plans have about three-quarters of the MA market.

Humana and United are challenging their ratings. United has filed a lawsuit against CMS.

My new company, Lilac Software, will have a blog and an infographic on all the Star Year 2025 details as well as historic trends. Watch for this on LinkedIn (my and Lilac’s page and at https://lilacsoftware.com. I will re-publish the blog on https://healthcarelabyrinth.com on Monday.

CMS Fact Sheet: https://www.cms.gov/newsroom/fact-sheets/2025-medicare-advantage-and-part-d-star-ratings

Additional articles: https://www.modernhealthcare.com/insurance/2025-medicare-advantage-ratings-humana-unitedhealth-aetna and https://insidehealthpolicy.com/daily-news/cms-ma-star-ratings-lower-cut-points-increase and https://www.beckerspayer.com/payer/medicare-advantage-star-ratings-decline-5-things-to-know.html and https://www.healthcarefinancenews.com/news/see-list-seven-plans-compared-38-last-year-receive-5-stars-medicare-advantage-star-ratings

(Some articles may require a subscription.)

#cms #stars #medicareadvantage #partd

https://www.fiercehealthcare.com/payers/medicare-advantage-star-ratings-dip-slightly-once-again-2025

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Despite Some Cutbacks, MA Plans Are Going Big For Special Needs Plans

Given their potential for greater margin, Medicare Advantage (MA) plans appear to be making heavy investments in Special Needs Plans (SNPs) in 2025, even as they contract other products in certain areas. Done right, SNPs can generate 6.4% margins, compared with 2.8% for MA generally. This comes from 2021 data. As well, the plans are reacting to the Centers for Medicare and Medicaid Services (CMS) making the integration of Medicare and Medicaid funding streams a huge priority.

The growth continues a trend. SNP enrollment is about 6.6 million people this year, up 255% from 10 years ago, 125% from five years ago and 16% from 2023. SNP enrollment is projected to hit 7.2 million in 2025.

UnitedHealth Group, Humana, Elevance Health, CVS Health, Centene and Molina are all investing heavily. Some plans are contracting base benefits even in SNPs.

The growth is not without risk. CMS is undertaking heavy regulation of SNPs and could rein in risk adjustment (from which SNPs benefit a great deal). Significant new Medicare-Medicaid integration requirements are coming down the road as well.

(Article may require a subscription.)

#specialneedsplans #snps #medicareadvantage #cms #medicaid #medicare

https://www.modernhealthcare.com/insurance/humana-centene-unitedhealth-medicare-advantage-dsnp-snp-plans

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Harris Announces Medicare At Home, Expands Healthcare Agenda

Democratic presidential candidate Kamala Harris announced a new Medicare at Home initiative. She would provide home health aide and other in-home supports for seniors and the disabled in Medicare. This would extend the current scope of benefits officially from short-term home care to chronic home care. I have proposed a comprehensive long-term care program paid through Medicaid and with buy-ins by seniors.

As well, Harris wants to have hearing and vision coverage added to the traditional program.

She would pay for most of the initiatives by expanding Medicare drug price negotiations and instituting pharmacy benefit manager (PBM) reforms.

On other news, Harris is turning up the heat on Trump with a healthcare agenda. The Harris campaign thinks healthcare can be a swing issue and move undecideds to her side.

In addition, a new study in Health Affairs has found that, while Medicare Advantage (MA) extends coverage for dental, vision, and hearing care as supplemental benefits, low-income beneficiaries still face significant access barriers to these services. A survey of MA enrollees conducted in 2018 and 2019 found that 11% reported an unmet dental need, 4% had an unmet vision need and 2% had an unmet hearing need.

Additional articles: https://insidehealthpolicy.com/daily-news/harris-proposes-expanded-medicare-home-health-care-funded-new-drug-price-negotiations and https://www.beckerspayer.com/policy-updates/harris-pitches-medicare-home-care-coverage-3-notes.html and https://thehill.com/policy/healthcare/4922425-harris-adult-caregivers-medicare-benefit-at-home-care-sandwich-generation/ and https://thehill.com/policy/healthcare/4920490-harris-campaign-health-care-prioritizes/ and https://www.fiercehealthcare.com/payers/many-ma-beneficiaries-have-dental-vision-or-hearing-benefits-access-gaps-remain-study-shows

(Some articles may require a subscription.)

#longtermcare #ltss #harris #trump #election2024 #homecare #supplementalbenefits #medicareadvantage #medicare

https://www.modernhealthcare.com/politics-policy/kamala-harris-medicare-home-care-the-view

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