Court case challenges how CMS calculated 2024 Star Ratings for Medicare Advantage plans

SCAN v. CMS Lawsuit: Implications for Medicare Advantage Plans A recent lawsuit, SCAN v. CMS, challenges how the Centers for Medicare & Medicaid Services (CMS) calculated 2024 Star Ratings for Medicare Advantage plans. The court’s decision could have significant implications for plans nationwide.

Key Points:

• SCAN argued that CMS misapplied its own regulations when calculating 2024 Star Ratings by using recalculated 2023 cut points instead of actual ones for the 5% “guardrail” cap.
• The court agreed with SCAN, finding that the regulations’ plain text required CMS to use the prior year’s actual cut points.
• As a result, SCAN’s 2024 Star Rating was set aside, and CMS cannot use it to determine SCAN’s quality bonus eligibility.

CMS Arguments and Court Rebuttals:

• CMS argued that applying the Guardrail Rule to recalculated hypothetical cut points was consistent with its regulations and preamble statements.
• The court rejected these arguments, emphasizing that any deviation from the regulations required explicit amendment.
• The ruling requires recalculating SCAN’s Star Rating using the correct Guardrail Rule application, potentially impacting its federal funding by $250 million.
• Elevance v. CMS:
• Don’t forget Elevance won its challenge against CMS and increased their ratings for four contracts.
• Although the resolution was not public, their filing argued CMS’ application of the 5% guardrails and call center data collection methods were flawed, affecting their ratings.

Impact and Next Steps:

The SCAN ruling provides insight into whether action can still be taken based on the SCAN ruling. The court rejected two arguments by CMS:

• CMS argued SCAN waived its right to challenge because it didn’t raise the issue during the rulemaking process. The court rejected this, citing Koretoff v. Vilsack, allowing “as-applied” challenges even if not raised during rulemaking.
• CMS argued any errors were harmless as SCAN had notice and a chance to comment on the policy. The court rejected this, citing Jicarilla Apache Nation v. U.S. Dep’t of Interior, stating errors are not harmless if they prejudice the regulated party. CMS’s error cost SCAN millions due to an incorrect Star Rating…

See the post here.

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