JPM24: How Aetna charted a comeback in the 2024 MA star ratings

For the 2023 plan year, Aetna's performance in the annual Medicare Advantage star ratings took a massive hit, with just 21% of its members enrolled in plans that earned a score of four stars or more.

However, the insurer bounced back in 2024 and was one of the stronger performers in the latest star ratings. Most (87%) of Aetna's MA members are in plans with at least four stars. CEO Karen Lynch told the audience at the previous J.P. Morgan Healthcare Conference that the company intended to rebound by 2025, as analyst Lisa Gill noted in the company's session on Monday at the show.

Given how poor the company's showing was in the 2023 stars, Gill said that few of the investors in the room last year believed in Lynch's confidence.

"They forget I'm all about execution," Lynch joked.

The largest factor in the insurer's star ratings decline was a one-star decrease in the score for its National PPO Plan, which accounts for more than half of its MA membership. CVS said the decrease would likely reduce 2024 operating income for the insurance business by between $800 million and $1 billion.

Lynch said that charting a turnaround required contributions from across the company to address major failings. For one, she said, performance on patient experience surveys, so addressing that was a major focus. She said "every touchpoint within the company" pushed to improve service for members.

The CVS team also took a closer look at medication adherence and its care management programs as it aimed to improve its star ratings scores. This bore fruit in its performance on Healthcare Effectiveness Data and Information Set (HEDIS) measures performance.

The protocols the company had in place were largely effective, Lynch said, but improving Aetna's star ratings meant taking that effort to the next level.

"What we did as we really built sustainable processes to make sure that we can continue to have that performance on an ongoing basis," Lynch said.

The Centers for Medicare & Medicaid Services has made significant updates to the methodology for the star ratings that kicked in for 2024, which left some payers out in the cold. One such insurer, Elevance Health, filed a lawsuit in late December challenging the updates.

At last year's JPM, Aetna was also facing disappointing growth in Medicare Advantage membership alongside the decline in star ratings. The company has reversed its fortunes there, too.

It expects to add 800,000 members in MA in 2024, with about a third of those enrolled in dual-eligible plans. In a filing submitted last week with the Securities and Exchange Commission, CVS said Aetna's performance during the open enrollment window went beyond expectations.

The insurer is seeing significant retention, according to the filing, as well as "a higher than historical proportion" of new sign-ups peeling off of competitors.

CVS Health will release its fourth-quarter and full-year earnings on Feb. 7.