Radar on Medicare Advantage

After a significant decline in Star Ratings performance for 2024, Elevance Health, Inc. and its affiliates have filed a lawsuit challenging CMS’s implementation of the Tukey outlier deletion methodology. Intended to infuse more “predictability and stability” into the Star Ratings by removing outliers from the cut point calculations for certain measures, its introduction was “fraught with errors and ambiguities during rulemaking” and marks a violation of the Administrative Procedure Act (APA), contends Elevance. And according to a leading Star Ratings expert, Elevance may not be the only MA insurer to sue CMS over its controversial implementation of the methodology.

The suit was filed by Elevance and affiliated entities in 18 states on Dec. 29 in the U.S. District Court for the District of Columbia. In its complaint, Elevance contends that CMS’s actions were “unlawful, and arbitrary and capricious” when it applied Tukey to the 2024 Star Ratings while contradicting its own policy of establishing “guardrails” for determining Star measure cut points.  It also alleges that CMS was arbitrary and capricious when calculating the cut points and determining the plaintiffs’ Star Rating on a single Part D measure — Call Center-Foreign Language Interpreter and TTY Availability.

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. 

Biosimilar uptake is higher for Medicare Advantage beneficiaries than their traditional Medicare (TM) counterparts, with MA members up to 2.3 times more likely to be prescribed a biosimilar, according to new research published in JAMA Health Forum. The FDA has approved 45 biosimilars so far, with more approvals expected this year. 

Researchers from CMS, the FDA and policy research firm Acumen LLC studied claims and encounter data to calculate market share for 20 biosimilars across seven product categories. Biosimilar uptake was higher for MA members in every category but bevacizumab, the generic name for Genentech’s targeted cancer therapy Avastin. Avastin currently has four biosimilars available, with a fifth approved last month. 

Although new policies proposed by CMS aim to protect Medicare beneficiaries by clamping down on fees that promote anticompetitive sales practices, critics of the proposed rule say CMS’s actions inappropriately target agents and brokers who sell Medicare Advantage plans and the field marketing organizations (FMOs) that support them. Further, they warn that CMS’s proposed changes to agent and broker reimbursement could lead to significant industry disruption that would trickle down to beneficiaries. 

The proposed rule was issued on Nov. 6 and published in the Nov. 15 Federal Register and contained provisions aimed at improving access to behavioral health, enhancing transparency around supplemental benefits, streamlining enrollment options for dual eligibles, encouraging biosimilar product substitution, and assessing the impact of prior authorization policies on health equity. CMS accepted comments through Jan. 5, and it received hundreds of comment letters addressing the rule’s more controversial proposals seeking to place new limits on agent and broker compensation.