The Centers for Medicare and Medicaid Services (CMS) has made a significant decision by withdrawing its appeal regarding the recalculation of Medicare Advantage star ratings for UnitedHealthcare, the largest Medicare Advantage insurer in the U.S.
This development comes just days after CMS had indicated its intention to challenge a Texas federal court ruling that mandated the agency reassess UnitedHealthcare’s ratings without considering a controversial call that negatively impacted its score.
On January 24, 2025, CMS officially filed to withdraw its appeal, although no explanation was provided for this abrupt change in direction.
The original court ruling, issued on November 22, 2024, found that CMS’s decision to include a single failed call in the evaluation process was unlawful.
This call had resulted in UnitedHealthcare’s rating being downgraded from a coveted 5-star to a 4-star rating, which could lead to substantial financial losses and reduced enrollment for the insurer.
UnitedHealthcare argued that the lower rating would significantly affect its profitability, as plans with lower star ratings can receive fewer bonus payments from CMS.
The court’s decision to side with UnitedHealthcare highlights ongoing tensions between major insurers and federal regulators over star rating calculations, which are crucial for determining funding and enrollment levels.
The withdrawal of the appeal may also have broader implications for other insurers facing similar challenges.
Companies like Elevance and Centene have also pursued legal action against CMS regarding their star ratings, suggesting a trend of increasing scrutiny on how these ratings are calculated and enforced.
This latest move by CMS may signal a shift in its approach under the current administration, potentially easing regulatory pressures on Medicare Advantage plans.
As Medicare Advantage continues to serve an increasingly diverse population—many of whom are low-income and have chronic conditions—changes in star ratings could have significant impacts on both insurers and beneficiaries alike.
With this decision, UnitedHealthcare is expected to benefit from improved ratings, which could enhance its market position and financial performance moving forward.
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