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CMS pays Centene $200m over star ratings controversy
Health plans sued over star ratings, and now the federal government is paying.
Sopa Images/Getty Images
Health plans sued over star ratings, and now the federal government is paying.
Sopa Images/Getty Images
After getting sued by several of the country’s biggest health plans over low 2025 star ratings, the Centers for Medicare and Medicaid Services (CMS) is now making millions in payouts to insurers. The latest health plan to get paid? Centene.
During an investor call on December 12, Centene CEO Sarah London said the company won $200 million in bonus payments from CMS related to Medicare Advantage star ratings. The health insurer sued CMS in October, claiming low star ratings from the agency would cost it $73 million.
“Following a successful appeal, we now have 55% of members at 3.5 star plans or better, up from 23% last year and 46% reported in October,” London said on the call. Centene has 28.5 million members, according to its website.
Star cross(ed). Controversy began in October 2023 when CMS released its 2024 star ratings, which grade the quality of Medicare Advantage plans operated by health plans like Centene. The ratings were designed to award bonus payments to plans that receive four or five stars.
But insurers took issue with CMS’s ratings, claiming they were not fairly graded and were losing money as a result. CVS Health, for example, projected it would lose $1 billion in 2024, Healthcare Brew previously reported, and Elevance Health (formerly Anthem) predicted that the lower ratings would cost it $500 million.
In addition to Centene’s payout, Scan Health Plan won $250 million in initially denied bonus payments from its lawsuit against CMS over the summer. A federal judge in Texas ruled in November that CMS had to recalculate UnitedHealth Group’s ratings, which an expert previously told Healthcare Brew could give United a $10 million earnings boost.
Humana and Elevance Health have also sued the agency over star ratings in recent months.
Pulling back. In November, CMS revisited its call center metric, which measures how well a plan’s call center works through factors like hold times, number of unanswered calls, and disconnect rates. The metric is the focus of many of the lawsuits, including Centene’s.
Starting with 2026 star ratings, the call center metric will be weighed as a two-point factor rather than a four-point one, aligning with insurers’ claims it had too much influence on ratings.
