Summary
This 8-K filing from CVS Health (CVS) on October 6, 2022, discloses a significant decrease in its Medicare Advantage Star Ratings for 2023, which will impact revenues in 2024. Specifically, the Aetna National PPO, a large and diverse plan representing 59% of Aetna's Medicare Advantage membership, dropped from 4.5 to 3.5 Stars. This decline means the plan will no longer be eligible for quality bonus payments in 2024, and the overall percentage of Aetna Medicare Advantage members in 4+ Star plans is expected to fall from 87% to 21% for the 2023 ratings. While these 2023 Star Ratings do not affect 2023 payments, they will be visible to consumers during the October 2022 open enrollment period. The company attributes the drop in the Aetna National PPO's rating primarily to lower scores in the Consumer Assessment of Healthcare Providers and Systems (CAHPS) survey, noting a discrepancy between these results and CVS Health's own internal member satisfaction surveys. Despite this setback, CVS Health anticipates no impact on its previously issued 2022 guidance and expects to mitigate the financial impact on its preliminary 2023 outlook, aiming to continue its low double-digit Adjusted EPS growth target for 2024 through operational initiatives and capital deployment strategies.
Key Highlights
- 1CVS Health's Aetna Medicare Advantage plans saw a significant decline in 2023 Star Ratings, with the Aetna National PPO dropping from 4.5 to 3.5 Stars.
- 2The Aetna National PPO, representing 59% of Aetna's Medicare Advantage membership, will lose eligibility for quality bonus payments in 2024 due to the lower rating.
- 3The percentage of Aetna Medicare Advantage members in 4+ Star plans is projected to decrease from 87% (2022 ratings) to 21% (2023 ratings).
- 4The decline in Star Ratings is primarily attributed to lower CAHPS survey scores, which CVS Health contrasts with its own internal member satisfaction data.
- 5The 2023 Star Ratings will be available to consumers during the October 2022 open enrollment period but do not impact 2023 payments.
- 6CVS Health expects no impact on its 2022 financial guidance and plans to mitigate the financial impact on its preliminary 2023 outlook.
- 7The company remains committed to its low double-digit Adjusted EPS growth target for 2024, planning operational improvements and capital deployment to offset headwinds.