Humana Loses Stars Lawsuit
Humana’s lawsuit on Star calculations was thrown out of court this week. The judge indicated that the plan did not exhaust internal appeals processes at the time of the filing and thus the suit did not have standing. The suit could be refiled, though. The Centers for Medicare and Medicaid Services (CMS) later rejected Humana’s appeal.
Humana’s suit was far-reaching and pointed. It said CMS did not follow its own regulations in its methodology for calculating ratings and said the agency does not provide plans the necessary data to calculate aspects of Star ratings. As an example, Humana said it could not replicate 60% of CMS’ cut point calculations.
Humana’s average Star score fell from 4.37 in 2024 to 3.63 for 2025.
Despite the lawsuit outcome, Humana is not wrong in its premise that inadequate data and a lack of transparency pervades the Star process. While the agency has gotten better about releasing and explaining aspects of the complex Star calculations, aspects remain a black box.
Additional articles: https://www.modernhealthcare.com/insurance/mh-humana-medicare-advantage-lawsuit-dismissed/ and https://www.beckerspayer.com/legal/judge-dismisses-humanas-medicare-advantage-star-ratings-lawsuit/ and https://www.healthcaredive.com/news/humana-medicare-advantage-star-ratings-lawsuit-dismissed/753455/
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#stars #cms #humana #medicareadvantage #quality
https://www.fiercehealthcare.com/payers/humana-joins-chorus-lawsuits-over-sinking-star-ratings
Peterson-KFF Analysis Predicts Huge Surge In Exchange Premiums
Healthcare policy group KFF has updated an earlier analysis on state insurance filings for 2026 Exchange rate hikes. Plans are seeking a median 15% rate hike for individual and small-group plans in 2026, according to data from 19 states and the District of Columbia. This would be the largest hike since 2018. The average hike in 2025 was 7%. In addition, the median figure means half of the states will have even higher increases.
The cause in great measure are reductions in the budget reconciliation act, a new rule recently enacted, and the expiration of enhanced premium subsidies. The Congressional Budget Office (CBO) had estimated that over 8 million would lose coverage, but Wakely Consulting says as many as 57% of the current over 24 million enrollees might be cut.
Another news article underscores that health plan financial woes may be far from over. At least four major plans have pulled or lowered guidance in the wake of high costs and worsening margins. UnitedHealthcare, Centene, and Elevance Health alll did so. Molina did so as well. It lowered is earnings advice, citing a mismatch between rates and rising medical costs in 2025.
For thesee plans, the budget bill will extend the pain into 2026. The budget bill will lower enrollment and likely revenue as well as create challenging rate environments in Medicaid. Crackdowns on prior authorization and risk adjustment also impact health plans. Interestingly, Molina insisted the budget bill will not affect its long-term growth, but that is hard to believe given it Medicaid-dominant profile.
See my blog this week on the topic: https://www.healthcarelabyrinth.com/health-plans-and-their-finances-post-the-big-beautiful-bill/ .
As well, the Paragon Health Institute published a summary of the budget reconciliation bill, very much from its point of view but still accurate. Paragon is an extremely influential policy group with great clout in the Trump administration. Paragon is given credit for influencing what was included in the bill, especially as it relates to improper enrollment in Medicaid and the Exchanges as well as provider tax changes. While I generally oppose the massive reductions to coverage, I have indicated that Paragon is not wrong on many aspects of waste, fraud, improper payments, improper enrollment, and extreme behavior by some states with regard to provider taxes and state directed payments.
Additional articles: https://www.modernhealthcare.com/insurance/mh-exchange-premiums-tariff-kff/ and https://kffhealthnews.org/news/article/obamacare-premiums-subsidies-trump-republicans-policy-fallout-kff-analysis/ and https://www.fiercehealthcare.com/payers/kff-report-early-filings-suggests-aca-premiums-will-spike-2026 and https://www.kff.org/affordable-care-act/press-release/insurers-preliminary-rate-filings-anticipate-biggest-increases-in-aca-marketplace-plan-premiums-since-2018/ and https://www.kff.org/affordable-care-act/issue-brief/individual-market-insurers-requesting-largest-premium-increases-in-more-than-5-years/ and https://paragoninstitute.org/medicaid/what-made-it-into-law-health-provisions-of-the-one-big-beautiful-bill/ and https://www.reuters.com/business/healthcare-pharmaceuticals/molina-healthcare-lowers-annual-profit-forecast-medical-cost-pressures-2025-07-07/
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#healthplans #margins #exchanges #coverage #premiums #budgetreconciliation
https://www.modernhealthcare.com/insurance/mh-unitedhealth-elevance-centene-profit-outlooks
Civil Monetary Penalties In Medicare Advantage Increasing
Civil monetary penalties (CMPs) against Medicare Advantage (MA) and Part D plans for improperly delaying or denying coverage and other compliance issues have already surpassed $3 million this year. Penalties were less than $2 million for all of 2021 to 2024. But about half of the $4 million was levied against one plan for violations in a prior year.
The Centers for Medicare and Medicaid Services (CMS) just issued a program audit summary of 2024 audits. I will recap the report in a blog next week.
#cms #compliance #medicareadvantage #partd
https://www.healthcaredive.com/news/medicare-advantage-part-d-cms-audit-report-fines-rising/753250
Drug Lawsuits Not Going Well For Industry
The Health Affairs Forefront Blog has a good article on Medicare drug price negotiation lawsuits. The drug manufacturers have lost at almost every pass. Courts have uniformly found that the program is neither an impermissible taking under the Fifth Amendment nor compelled speech under the First Amendment. Courts have argued that companies are not required to sell their drugs to the Medicare program.
In other news, Health Affairs Forefront also has an article on the role of health-system MA plans. Enrollment in MA plans linked to health systems increased by 54.1%, from 2.6 million in 2016 to 4.0 million in 2022. The number of systems offering plans stayed relatively stable in the timeframe.
Overall, the percentage of MA enrollees in such plans decreased slightly during the period from 14.5% to 13.2% because of the explosive growth overall in MA.
Additional article: https://www.healthaffairs.org/content/forefront/health-system-ownership-medicare-advantage-plans-has-increased-over-time
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#ira #drugpricing #banddrugmakers #cms #hhs
— Marc S. Ryan
