The Centers for Medicare & Medicaid Services (CMS) rejected Humana’s internal appeal to enhance its Medicare Advantage star ratings. This decision, impacting Humana’s Medicare Advantage program, was disclosed in a court filing amidst ongoing litigation against the U.S. Department of Health and Human Services (HHS). Dr. Mehmet Oz, the new CMS administrator, is set to review the appeal by April 28.
Humana asserts that the government arbitrarily modified the star ratings calculation methodology, adversely affecting their ratings, which declined from an average of 4.37 to 3.63 this year. The drop is the steepest among leading Medicare Advantage (MA) insurers. HealthScape, part of Chartis healthcare consultancy, forecasts a potential revenue loss of $1 billion to $3 billion for Humana in the following year due to this decline, contrasting with the mild overall impact on the industry.
Despite other insurers like UnitedHealth and Centene successfully appealing their ratings, Humana’s remained unchanged, prompting the lawsuit. Humana’s argument includes that CMS’s rejection invalidates CMS’s stance that the court should dismiss their case over unexhausted administrative remedies. Should Dr. Oz maintain CMS’s decision, Humana will seek an expedited court intervention by April 30.
This situation highlights ongoing disputes over changing star rating methodologies, reflecting broader tensions in healthcare quality metrics within the evolving MA program. Rising utilization costs among MA members further strain Humana, exacerbating the impact of falling ratings. The article also notes Humana’s profit drop from $2.5 billion to $1.2 billion in the past year but highlights that higher-than-expected MA reimbursement rates for next year may offer financial relief.
In summary, Humana’s Medicare Advantage star ratings issue underscores procedural disputes and economic pressures within privatized Medicare programs, illustrating insurer-regulator tensions and their implications for healthcare regulation in the U.S.
