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
Better Medicare Alliance Catalogs Medicare Advantage Reductions
While a number of folks have sought to review the potential changes in Medicare Advantage (MA), kudos to Better Medicare Alliance (BMA) for its great analysis that catalogs the major impacts in a very quantifiable way. BNA finds a number of significant impacts to MA enrollees, including:
Plan Availability: Individual MA plan offerings are set to decline by 6.54% in 2025, while Special Needs Plans (SNPs) will increase 8.5%.
Higher Costs: Premiums for the average MA enrollee will remain stable, however, with an average premium of $17 in 2025 compared to $18.23 in 2024. But plans had to save somewhere and therefore other costs will increase. The median out-of-pocket maximum will increase by 8%, rising from $5,000 in 2024 to $5,400 in 2025.
Reduced Benefits: While dental, vision, and hearing benefits remain stable, fewer plans will offer other important benefits that close coverage gaps. The coverage of these benefits, such as meals, in-home supports, transportation, and over-the-counter meds, will drop considerably in some cases.
The reductions are tied to a new risk adjustment model, changes in the Inflation Reduction Act for Part D, returning utilization and inflation, and lower star scores. The Centers for Medicare and Medicaid Services (CMS) acted politically when it signaled in a news release that all was well, citing just premiums as being stable. According to two studies, between 1.8M and 2M MA enrollees face the need to change plans due to termination of plans. This is twenty times the normal level. A special enrollment period (SEP) is needed to protect people. See my blog on this here: https://www.healthcarelabyrinth.com/cms-should-institute-special-enrollment-period-in-2025-for-medicare-beneficiaries/
#medicareadvantage #bma #coverage #cms
Oscar Health Expanding In the Exchanges
Oscar Health announced it would expand its reach in the individual market and plans to offer coverage in 504 markets in 18 states for the 2025 plan year. Part of its expansion will be aimed at cultural competence, diversity, and recognize chronic disease burdens.
#oscarhealth #exchanges #obamacare #coverage
https://www.fiercehealthcare.com/payers/oscar-health-unveils-aca-expansion-plans-2025
Many Plans Argue Higher Acuity Not Recognized In Current Medicaid Rates
While Medicaid managed care plans did a good job of arguing for higher reimbursement during COVID. But with state revenue drying up and extra federal reimbursement going away, Medicaid managed care plans big and small are arguing that current Medicaid rates are not keeping up with the acuity of the population post Medicaid redeterminations starting again. Some are calling the situation dire and an existential threat to plans.
(Article may require a subscription.)
#medicaid #managedcare #healthplans #rates
https://insidehealthpolicy.com/daily-news/medicaid-plans-ramp-warnings-pay-rates-mismatch-post-phe
Kaiser Health News Article On Medicare Part D Changes
Kaiser Health News (KHN) has published an article talking about Medicare Part D changes in 2025. In some ways I think KHN is too enamored with the Inflation Reduction Act’s (IRAs) major cost-sharing reductions in Part D. While it tries to balance it with discussions of rising premiums, it does an inadequate job. KHN should tell both the story of the cost-sharing caps, but also that there was major fallout from the changes – increased premiums only being tempered for three years by the premium stabilization program, other cost-sharing increases, and reductions in plan offerings. In truth, the IRA changes threaten the future stability of the program.
#khn #partd #pdp #medicare #coverage
https://kffhealthnews.org/news/article/medicare-part-d-drug-plans-premiums-caps/
— Marc S. Ryan
