Insurer Centene sues US over downgrade in Medicare 'star' rating
By Brendan Pierson
Oct 22 (Reuters) -Health insurance company Centene CNC.N accused U.S. regulators of unfairly downgrading the star ratings for its government-funded Medicare plans in a lawsuit on Tuesday.
The company alleged in its complaint, filed in St. Louis, Missouri, federal court, that the lower ratings would cause it to lose customers and up to $73 million in gross revenue, which could be used to reduce premiums and increase benefits for its members.
Centene offers so-called Medicare Advantage plans, which are funded by the Medicare health insurance program for seniors and some disabled people but administered by private insurers.
The U.S. Centers for Medicare and Medicaid Services (CMS) issues star ratings, from one to five stars, for Medicare Advantage plans, to help beneficiaries choose their plans. Plans with higher star ratings may also receive higher payments from the government if they keep costs below certain targets.
Centene said in the lawsuit that CMS docked its scores for the newest star ratings announced this month because of a single failed attempt to connect to its call center through a text-to-voice teletypewriter device. Such devices are used by people who are hard of hearing.
The St. Louis-based company said that, according to notes kept by the "secret shopper" employed by CMS to test the service, the call failed because of a software problem on the caller's end.
As a result, Centene said, seven of its health plans received a lower overall star rating, and four received a lower rating for prescription drug coverage, known as Medicare Part D.
"These are staggering consequences for a single call that never connected to plaintiffs' call center because the CMS secret shopper's (teletypewriter) software 'closed unexpectedly,'" Centene said.
Centene is asking the court to order HHS to recalculate its star rating "immediately" without considering the disputed call.
Despite the rating drop for some plans that Centene described in its lawsuit, the company said in an Oct. 11 disclosure that it had made "meaningful progress" overall in its 2025 ratings. It said that 46% of its Medicare Advantage members were enrolled in plans with star ratings of 3.5 star or higher, up from 23% in the previous year.
Humana HUM.N and UnitedHealth UNH.N filed similar lawsuits against CMS, challenging ratings downgrades earlier this month and also alleging that they were unfairly penalized for call center tests.
The case is Centene Corp et al v. Becerra, U.S. District Court for the Eastern District of Missouri, No. 4:24-cv-01415.
For Centene: Catherine Hanaway of Husch Blackwell
For HHS: not available
Read more:
US health agency releases 2025 quality ratings for Medicare plans
(Reporting By Brendan Pierson in New York)
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