Humana Sues HHS Over Medicare Advantage Star Ratings Drop

Humana Inc. has filed a lawsuit against the U.S. Department of Health and Human Services over a drop in its Medicare Advantage (MA) star ratings. This decrease could significantly affect the company’s bonus payments from the Centers for Medicare & Medicaid Services, as well as its overall revenue. The lawsuit claims that federal regulators were "arbitrary and capricious" in how they calculated Humana's quality scores, leading to a substantial reduction in the number of Humana MA plans rated 4-star or higher for the next year.

During a recent earnings call, Humana's CEO discussed the need for meaningful progression in star ratings, noting the impact this has on their financial targets. Additionally, Humana is expanding its senior-focused primary care clinics, aiming to enhance service quality for its members. The company believes the future of Medicare Advantage and value-based care remains optimistic, as they actively work on increasing patient care under these models.

Humana's recent financial results indicated a revenue increase compared to the previous year, and reports have suggested that Humana and Cigna are contemplating a merger. The legal dispute over star ratings has stirred considerable discussion within the company and the healthcare industry as it seeks to retain its status as one of the largest insurers in the U.S.