What's Happening?
Humana is contesting the Centers for Medicare & Medicaid Services (CMS) star ratings, which could potentially cost the insurer billions in revenue. The dispute centers around three disconnected phone calls that Humana claims were mishandled by CMS, affecting its 2025 ratings. The CMS star ratings system evaluates Medicare Advantage plans and awards bonus payments to plans with higher ratings. Humana has filed a lawsuit in a Texas court, seeking to have its ratings recalculated without the disputed calls. The insurer argues that the calls were disconnected due to third-party internet issues and CMS's handling was inconsistent with its regulations. CMS, however, maintains that Humana's rating downgrade is justified, accusing the insurer of failing to provide adequate foreign-language interpreter services during test calls.
Why It's Important?
The outcome of this legal battle could have significant financial implications for Humana, potentially wiping out $3 billion in revenue. The CMS star ratings are crucial for Medicare Advantage plans, influencing consumer choice and determining substantial bonus payments. This case highlights the importance of compliance with CMS regulations and the impact of administrative decisions on healthcare providers. The broader implications could affect how insurers manage customer service operations and their approach to regulatory compliance, potentially leading to changes in how CMS evaluates and rates Medicare Advantage plans.
What's Next?
The court's decision is expected before the Medicare enrollment period begins on October 15. CMS is set to release its 2026 star ratings next month, which could further impact Humana's financial standing. The case may prompt other insurers to scrutinize CMS's rating criteria and challenge similar decisions. If Humana succeeds, it could lead to changes in how CMS conducts its evaluations and handles disputes, potentially affecting the star ratings system and its impact on the Medicare Advantage market.
