Sachin Jain, President and CEO of SCAN Group and Health Plan, shared on LinkedIn:
“In 2024, SCAN filed and won the first successful legal challenge to the federal Medicare Advantage Star Ratings program.
We argued that the Centers for Medicare and Medicaid Services had acted outside its authority in implementing a new cut-point methodology and had improperly scored a single secret-shopper call. Those decisions produced an unjust $250 million swing in SCAN’s revenue.
A federal judge ruled in our favor, prompting CMS to recalculate Star Ratings across the industry. More than 60 plans received higher ratings, resulting in over $1 billion in additional payments and richer benefits for Medicare beneficiaries.
Since then, other health plans have turned to litigation. Some challenges have succeeded; others have not. Most recently, Clover Health challenged CMS’s methodology, prompting another recalculation – one CMS is now appealing.
The litigation is a symptom of a larger problem: the Star Ratings program has become too consequential to operate with this much methodological instability.
In a new Health Affairs Forefront essay, SCAN General Renee Delphin-Rodriguez and I examine what this wave of litigation means for the program’s future.
Three observations:
- Star Ratings have become excessively high-stakes.
A plan with a raw score of 3.74 receives 3.5 Stars, while one scoring 3.76 receives 4 Stars. There may be no statistically meaningful difference in quality between them, yet the payment difference can reach hundreds of millions of dollars. That is neither sound policy nor helpful information for beneficiaries. - The program needs a genuine refresh.
New measures must be introduced, but outdated ones must also be retired. As performance improves and scores cluster near the top, compressed cut points place enormous financial weight on increasingly small differences in performance. - Medicare Advantage needs a vibrant and credible Star Ratings program.
A functioning pay-for-performance system is one of the important ways Medicare Advantage can improve upon traditional Medicare. But the program must be stable, transparent, and more closely aligned with what matters most: patient experience, meaningful quality, and value.
Litigation can correct unlawful decisions. It cannot substitute for thoughtful program design.”
Read recommendations for Star Ratings reform in Health Affairs.
Other articles about SCAN Group and Health Plan on OncoDaily.