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CMS to recalculate quality ratings of Medicare Advantage plans

The Centers for Medicare & Medicaid Services said it will recalculate this year’s quality ratings of Medicare Advantage plans for people aged 65 years and above, which would likely increase the bonus payments for insurers.

The federal agency notified insurers of its decision to recalculate the Star Ratings in a memo on Thursday, which determine the reimbursement levels and can sway enrollees in choosing their plans.

UnitedHealth Humana and other insurers offer Medicare Advantage plans under which they are paid a set rate by the government to manage healthcare for people aged 65 and older or with disabilities.

An increase in bonus payments would be a relief to health insurers who are already struggling with high medical costs and lower-than-expected rates for next year.

The recalculation comes after two lawsuits over the Star Ratings, filed by insurers SCAN Health Plan and Elevance Health. Both insurers won their challenges last week.

A decision on whether to appeal those judgments has not yet been reached, a CMS spokesperson said.

The federal agency said it plans to disclose the updated 2024 Star Ratings in the next few weeks. Ratings for plans will not be decreased as a result of the recalculation, it added.

The potential changes – which will apply to the ratings for 2024 – would impact 2025 earnings for health insurers.

For Elevance, the recalculation should provide much needed relief, said Mizuho analyst Ann Hynes, who added the news was also positive for Humana, CVS Centene and Molina Healthcare. Reuters

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