CMS’ report released Thursday showed the percent of Humana’s Medicare Advantage beneficiaries enrolled in four-star quality or higher rated plans fell from 78 percent in 2015 to 37 percent in 2016. Major insurance competitor Cigna also experienced a downgrade, as members enrolled in high quality plans dropped from 67 percent to 19 percent in the same period.
CMS evaluates health plan offerings on a five-star rating system. Insurers that earn high ratings receive monetary bonuses.
Plan ratings can influence consumers’ decision when it comes to purchasing a Medicare Advantage plan. Susquehanna Financial Group analyst Chris Rigg told Bloomberg News, “If Humana cannot successfully mitigate the issues with CMS, it will be at a material enrollment disadvantage relative to its peers.”
In response to CMS’ star ratings, Humana said it did not expect the downgrade “to materially impact Medicare membership growth for 2017.” Both Humana and Cigna have challenged their ratings and requested regulators reconsider their decisions.
Humana stock tumbled more than 5 percent when the stock market closed Wednesday. Cigna stock dipped 2.4 percent.
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