UnitedHealth, one of the largest providers of Medicare Advantage (MA) plans, has recently filed a lawsuit against the Centers for Medicare & Medicaid Services (CMS), challenging how their star ratings were downgraded due to an issue with a single call center interaction. These ratings are crucial for Medicare Advantage plans, as they influence customer decisions and impact government bonuses. This lawsuit brings into focus the broader concerns that insurers have with the star rating system and how it affects their business operations.
UnitedHealth’s Lawsuit Against CMS
The Star Ratings Dispute
UnitedHealth subsidiaries filed a lawsuit against the Biden administration, arguing that CMS unfairly lowered their Medicare Advantage star ratings based on a single phone call made to their customer support center. According to the lawsuit, the call in question lasted less than 10 minutes, but its repercussions could cost UnitedHealth millions of dollars in lost revenue if customers choose other plans due to the lower ratings.
The complaint, filed in a Texas district court, accused CMS of basing their downgrade on an “arbitrary, capricious, and unlawful” assessment of how the call was handled. UnitedHealth is asking the court to order CMS to correct the star ratings before the upcoming Medicare Advantage open enrollment period.
The Complaint: A Single Call Impact
The lawsuit highlights a phone call placed by CMS as part of its test to assess the quality of customer service provided by UnitedHealth’s call center. The call was made in French, and UnitedHealth claims that their customer service center connected the call within the required eight-minute timeframe. However, the CMS tester failed to ask a required introductory question, which led to the call being marked as unsatisfactory.
UnitedHealth argues that the call center should not have been penalized for this and that the rating downgrade was unjust. The company appealed to CMS to invalidate the call, but CMS refused, leading to UnitedHealth’s lawsuit.
Dive Insight: The Broader Implications
Star Ratings and Their Importance
Medicare Advantage star ratings serve as a key indicator of the quality of care provided by an insurance plan. The ratings, which range from one to five stars, are based on various factors, including preventative care, member experience, health outcomes, and customer service. Seniors rely on these ratings to choose their Medicare Advantage plans during the fall open enrollment period, and plans with higher ratings are more likely to attract customers.
Comparison with Other Insurers
UnitedHealth’s lawsuit is not the first of its kind. Earlier in the year, insurers like Elevance and Scan Health Plan successfully sued CMS over similar downgrades to their star ratings. In both cases, the courts sided with the insurers, forcing CMS to recalculate their ratings. UnitedHealth’s case is particularly similar to Elevance’s, as both involve disputes over customer service call evaluations.
Following the successful lawsuits by Elevance and Scan, CMS revised the star ratings for several Medicare Advantage plans, resulting in higher ratings for more than 60 plans across 40 insurers, including some UnitedHealth plans.
The Role of Customer Service in Star Ratings
Call Center Standards and Evaluation
Customer service plays a critical role in determining Medicare Advantage star ratings. MA plans are required to provide seniors with accurate information upon request, and call centers must meet specific standards. CMS often evaluates these call centers through anonymous test calls, where the quality and promptness of the service are assessed.
To achieve a five-star rating for call center performance, MA plans must ensure that interpreters are provided within eight minutes of a request for all incoming calls. In UnitedHealth’s case, the company argues that their call center met this requirement, but CMS still penalized them due to the unsatisfactory handling of the test call.
UnitedHealth’s Defense
UnitedHealth maintains that the CMS test call was improperly evaluated. The lawsuit claims that the CMS test caller failed to ask the required introductory question, and as a result, the call center employee did not provide the appropriate response. UnitedHealth argues that this mistake was not their fault and that their call center should not have been penalized for it.
Furthermore, UnitedHealth claims that CMS applied a different standard to their plans than it did to Elevance’s, even though both cases involved similar call center disputes.
The Financial Impact of Star Ratings
Impact on Plan Enrollment
Medicare Advantage star ratings have a direct impact on an insurance plan’s ability to attract and retain customers. Plans with higher ratings are more attractive to seniors during the Medicare open enrollment period, while plans with lower ratings may see a decrease in enrollment. UnitedHealth argues that the downgrade in their star ratings could lead to a significant loss of customers, potentially costing the company millions of dollars.
Bonuses and Financial Gains
Star ratings also have a significant financial impact on Medicare Advantage plans. Plans that achieve higher ratings are eligible for bonuses from the federal government, which can help increase their profitability. In addition, higher-rated plans are allowed to bid against a higher benchmark, giving them a competitive advantage in the marketplace. A lower rating can mean the loss of these financial benefits, which is why insurers are so eager to challenge CMS when they believe their ratings have been unfairly downgraded.
Conclusion
UnitedHealth’s lawsuit against CMS highlights the critical importance of Medicare Advantage star ratings and how even a single call can have far-reaching consequences for an insurer. As Medicare Advantage becomes more competitive, insurers are increasingly turning to the courts to ensure their ratings reflect the true quality of their services. With the open enrollment period fast approaching, the outcome of this lawsuit could have a significant impact on both UnitedHealth’s business and the future of the star rating system.
Discover the latest GovHealth news updates with a single click. Follow DistilINFO GovHealth and stay ahead with updates. Join our community today!
FAQs
1. What are Medicare Advantage star ratings?
A. Medicare Advantage star ratings are a measure of the quality of care provided by an insurance plan. The ratings are based on factors such as preventative care, member experience, and customer service.
2. Why did UnitedHealth sue CMS?
A. UnitedHealth sued CMS because the agency downgraded their Medicare Advantage star ratings based on a single customer service call that UnitedHealth claims was improperly evaluated.
3. How do star ratings affect Medicare Advantage plans?
A. Star ratings influence customer choices during open enrollment and determine eligibility for federal bonuses, which can have a significant financial impact on insurance plans.
4. What was the result of previous lawsuits against CMS over star ratings?
A. Other insurers, such as Elevance and Scan Health Plan, successfully sued CMS earlier this year, leading to recalculations of their star ratings.
