Elevance Health is the latest insurer to fail in its bid challenging the Centers for Medicare & Medicaid Services (CMS) over star ratings scores.
A judge in the Northern District of Texas found no evidence the CMS acted arbitrarily and capriciously and said a court is otherwise not equipped to question the agency on star ratings data collection and scoring.
“That process involves advanced knowledge of data collection, statistics and mathematics,” the decision (PDF) reads. “In other words, it is not one which a federal court is well suited to second guess."
The insurer sued the feds in November, saying the agency’s calculation methodology was “fraught with statistical variance” and cost the health plan $375 million. Elevance argued the agency “deviated from the regulations” when it adjusted each CAHPS, or Consumer Assessment of Healthcare Providers and Systems, metric.
Contracts that receive higher star ratings get larger quality bonus payments.
Elevance also scored a 3.749695 on one contract, but, if it had scored a 3.75, it would have earned four stars. The plan took issue with rounding to the sixth decimal point, but the judge found Elevance’s rationale for changing the score “perplexing.”
“Understandably, Elevance would have preferred for those contracts to reach the next half-star tier,” said the judge. “But the fact that they fell short does not give rise to a claim for relief under federal law.”
Mark Abernathy, managing director at Berkeley Research Group, had testified for the health plan that the agency’s case-mix adjustment unfairly lowered the insurer’s star ratings.
“Although the regulations do not expressly authorize case-mix adjustments for CAHPS measure scores, they refer to case-mix adjustment in a way that assumes it is taking place already,” the judge responded in the decision.
Elevance earned a partial win in court over a star ratings challenge for the previous year. In June 2024, a court sided with the insurer and said the CMS did not properly follow administrative rules.