Contract Terminations Signal Tougher CMS Enforcement Amid Stars Upheaval

As changes such as the application of the Tukey outlier deletion methodology and the introduction of the Health Equity Index stand to make the Medicare Advantage landscape more competitive, CMS in recent weeks issued three contract terminations based on poor performance over a three-year period. While the COVID-19 public health emergency afforded MA and Part D insurers certain flexibilities, experts say the recent enforcement actions signal a tougher CMS coming out of the PHE.

Modern Healthcare on Jan. 8 broke the news that consistently poor Star Ratings for Centene Corp.’s WellCare Health Insurance of Arizona and WellCare Health Insurance of North Carolina would force the exits of two Medicare Advantage Prescription Drug (MA-PD) contracts from the MA market. According to separate letters to the subsidiaries dated Dec. 27, CMS decided to impose intermediate sanctions after WellCare failed to achieve a Part C summary Star Rating of at least 3 Stars in three consecutive rating periods for the specific contracts. That means the contracts had to stop enrolling new Medicare beneficiaries and cease all marketing activities, effective Jan. 12.