Humana Lawsuit Challenges CMS Star Ratings Over Phone Disconnects

What's Happening?

Humana is contesting its 2025 Medicare Advantage star ratings in a Texas court, arguing that three disconnected phone calls unfairly impacted its ratings. The Centers for Medicare & Medicaid Services (CMS) uses a star rating system to evaluate Medicare Advantage plans, which can result in significant bonus payments for insurers with high ratings. Humana claims that the CMS lowered its ratings based on three calls that were disconnected due to technical issues, and is seeking a recalculation of its ratings without these calls. The insurer argues that these calls were handled inconsistently with CMS regulations, and that its representatives were unable to call back due to CMS policies. The case is significant as Medicare Advantage has surpassed traditional Medicare in terms of enrollment, making it a crucial public benefit program.

Why It's Important?

The outcome of this lawsuit could have substantial financial implications for Humana, potentially affecting billions in revenue. Medicare Advantage plans are a major component of the U.S. healthcare system, and CMS star ratings play a critical role in determining the financial success of these plans. A favorable ruling for Humana could set a precedent for how CMS ratings are calculated and challenged, impacting other insurers and the broader healthcare industry. Additionally, the case highlights the importance of regulatory compliance and the potential consequences of technical issues in customer service operations.

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 soon, which could further influence the financial landscape for Medicare Advantage providers. Stakeholders in the healthcare industry, including insurers and policy firms, are closely monitoring the case for its potential impact on future CMS rating criteria and the financial health of Medicare Advantage plans.