Zinger Key Points
- CMS reports 40% of Medicare Advantage plans earned four or more stars for 2025, a decline from 2024.
- UnitedHealth's Star Rating downgraded over an eight-minute customer service call.
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The U.S. health agency, the Centers for Medicare & Medicaid Services (CMS), announced Tuesday that it will appeal a November 2024 ruling to the Fifth Circuit Court of Appeals.
What Happened: In October, around 40% of Medicare Advantage plans with prescription drug coverage earned four or more stars in 2025, a decline from this year, according to data released by the CMS. UnitedHealth received a four-star rating.
Also Read: Humana Faces Sharp Decline In Medicare Star Ratings For 2025, Braces For 2026 Revenue Hit
UnitedHealth, an insurance giant, filed a complaint to challenge an ‘arbitrary and capricious’ and otherwise unlawful evaluation and rating of its performance.
CMS evaluates the plans at issue through a ranking process. It assigns Star Ratings that consumers rely upon to choose health insurance during annual enrollment periods (among other times).
One measure that CMS uses to conduct such evaluations is the performance of a plan’s customer service call center.
The filing said that CMS downgraded UnitedHealth’s Star Ratings based on an arbitrary and capricious assessment of how the company’s call center handled a single phone call that lasted less than ten minutes.
UnitedHealthcare explained that the caller was connected to a French-speaking customer service representative through its main call center. During the eight-minute call, faint rustling and breathing could be heard from the caller, but they never asked the required opening question.
Since the representative didn’t hear this question, they didn’t have a chance to respond. Although the caller was never placed on hold, the representative ended the call after waiting eight minutes without hearing the necessary question.
Why It Matters: A federal judge in Texas partially ruled in favor of UnitedHealthcare, stating that CMS acted unfairly by labeling a disputed call as “unsuccessful” without following its own guidelines.
The judge ordered CMS to recalculate UnitedHealthcare’s Star rating without factoring in the contested call.
Price Action: UNH stock is up 1.77% at $528.93 at last check Thursday.
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