All_About_Najmi/iStock via Getty Images Clover Health ( NASDAQ: CLOV ) shares traded higher on Friday after the health insurer said that the Centers for Medicare and Medicaid Services (CMS) had revised its 2024 Medicare Advantage Star Ratings, resulting in an increase of 0.5 Stars. The update comes a day after the CMS informed payers that it would recalculate the MA Star Ratings, applicable for 2025.
The decision came after two court rulings faulted the agency over the methodology in response to lawsuits filed by nonprofit insurer SCAN Health and publicly traded Elevance Health ( ELV ). As per the revised ratings, Clover Health’s ( CLOV ) Star Ratings have increased from 3 Stars to 3.5 Stars, potentially leading to additional bonus payments from CMS next year.
“This recalculation to 3.5 Stars significantly improves our financial outlook for next year,” said Peter Kuipers, CLOV’s CFO. “We believe the improvement provides us with the opportunity to accelerate our membership growth while maintaining and growing profitability,” he added.
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