CMS Improves Star Ratings to 3.5 Stars for Clover Health PPO Medicare Advantage Plans for 2025 Payment Year

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Clover Health has announced that the Centers for Medicare and Medicaid Services (CMS) has recalculated the 2024 Star Ratings for its PPO Medicare Advantage plans, increasing the rating to 3.5 Stars for the 2025 payment year, up from the initial rating of 3 Stars.

This improvement affects over 95% of Clover’s Medicare Advantage membership. CEO Andrew Toy expressed optimism about the company's future strategy and financial performance, highlighting that the improved rating will enhance member benefits. CFO Peter Kuipers noted that the recalculated rating significantly improves Clover Health's financial outlook and offers opportunities for membership growth and profitability.

  • CMS increased Clover Health's PPO Medicare Advantage plan rating from 3.0 to 3.5 Stars for the 2025 payment year.
  • The improved rating positively affects over 95% of Clover's Medicare Advantage membership.
  • The higher rating is expected to enhance member benefits.
  • CEO Andrew Toy views the improved rating as a testament to the quality of Clover's MA plans.
  • The recalculated rating is expected to accelerate membership growth and profitability.
  • The improved rating boosts Clover Health's financial outlook for next year.
  • The initial rating of 3.0 Stars had previously set a lower expectation for 2025, indicating earlier concerns about plan performance.
  • The reliance on CMS recalculations introduces uncertainty into future financial and operational planning.

The upgrade in CMS Star Ratings from 3.0 to 3.5 Stars for Clover Health's PPO Medicare Advantage plans will potentially have a substantial positive impact on the company's financial performance. The Star Ratings directly influence the level of reimbursement Clover Health will receive from CMS. Higher ratings generally result in increased incentive payments, which can enhance the company's revenue streams. Moreover, higher-rated plans are more attractive to new enrollees, potentially driving membership growth. This rating jump could thus translate into higher operational revenues and improved profitability in the near term.

For investors, it's vital to consider the short-term and long-term implications. In the short term, the improvement boosts Clover’s financial outlook for 2025, providing a more robust foundation for growth. In the long term, maintaining or further improving these star ratings will be important to sustaining financial health and competitiveness in the Medicare Advantage market.

It's also important to juxtapose this with industry norms. While a 3.5 Star rating is a positive development, it is worth noting that top-performing plans typically strive for ratings of 4.0 Stars and above. Thus, while this improvement is beneficial, there remains room for further enhancement of service quality and member satisfaction.

An upgrade in CMS Star Ratings for Medicare Advantage plans reflects positively on the quality of care and service provided by Clover Health. CMS Star Ratings are based on a variety of factors including patient outcomes, customer service and preventative care measures. An increase from 3.0 to 3.5 Stars suggests that Clover Health has successfully enhanced its performance across these metrics, which could indicate better health outcomes and higher patient satisfaction.

For stakeholders, this improvement could signify a more reliable and effective healthcare service, potentially increasing trust and loyalty among current members and attracting new enrollees. Additionally, higher Star Ratings could also reduce the chances of regulatory scrutiny, thus allowing the company to focus more on strategic growth and member care rather than compliance issues.

It's noteworthy that the recalibration to 3.5 Stars implies effective adjustments based on CMS's feedback, illustrating the company’s capability to respond and improve according to regulatory standards. However, for sustained positive perception, continuous monitoring and enhancement of service quality will be imperative.

The Company previously communicated that CMS had calculated a rating of 3.0 Stars for its PPO plans, impacting payment year 2025. As a result of a recent rating recalculation, CMS has improved that rating to 3.5 Stars for 2025 payment year

FRANKLIN, Tenn., June 14, 2024 (GLOBE NEWSWIRE) -- Clover Health Investments, Corp. (NASDAQ: CLOV) (“Clover,” “Clover Health” or the “Company”), a physician enablement technology company committed to bringing access to great healthcare to everyone on Medicare, today announced that the Centers for Medicare and Medicaid Services (“CMS”) has recalculated the 2024 Star Ratings of Clover Health’s PPO Medicare Advantage (“MA”) plans for the 2025 payment year, and has increased the rating by 0.5 Stars, to a revised rating of 3.5 Stars, from the original rating of 3 Stars. Currently, over 95% of Clover’s Medicare Advantage membership is served through its PPO plans.

“We are very pleased CMS has recalculated and improved our Star rating for the 2025 payment year,” said Andrew Toy, Chief Executive Officer of Clover Health. "This new development is a testament to the high quality of our MA plans and makes me incredibly optimistic about our go-forward strategy, including our ability to maintain the foundation of strong financial performance we have built over the last year, while bolstering our ability to further scale our Insurance line of business via a strong product offering. Most importantly, an increased Star rating allows us to improve the benefits our members receive, which is always our priority.”

“We had previously communicated and planned to operate with a 3.0 Star rating for our PPO plans for 2025. This recalculation to 3.5 Stars significantly improves our financial outlook for next year. We believe the improvement provides us with the opportunity to accelerate our membership growth while maintaining and growing profitability,” said Peter Kuipers, Chief Financial Officer of Clover Health.

Today’s announcement relates to the 2022 measurement year, which corresponds to the 2025 payment year, for Clover Health’s PPO MA plans. Every year, Medicare evaluates plans based on a 5-star rating system.

About Clover Health:
Clover Health (Nasdaq: CLOV) is a physician enablement technology company committed to bringing access to great healthcare to everyone on Medicare. This includes a health equity-based focus on seniors who have historically lacked access to affordable, high-quality healthcare. Our strategy is powered by our software platform, Clover Assistant, which is designed to aggregate patient data from across the healthcare ecosystem to support clinical decision-making and improve health outcomes through the early identification and management of chronic disease.

Forward-Looking Statements:
Please note that this press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements regarding future events and Clover Health’s future results of operations, financial position, business strategy and future plans. Forward-looking statements are not guarantees of future performance, and you are cautioned not to place undue reliance on such statements. In some cases, you can identify forward looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “going to,” “can,” “could,” “should,” “would,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” “outlook,” “forecast,” “guidance,” “objective,” “plan,” “seek,” “grow,” “target,” “if,” “continue” or the negative of these words or other similar terms or expressions that concern Clover Health’s expectations, strategy, priorities, plans or intentions. Forward-looking statements in this press release include, but are not limited to, the anticipated benefits associated with CMS’s recalculation of the 2025 payment year Star ratings of Clover Health’s PPO MA plans from 3 Stars to 3.5 Stars, as well as our expectations related to Clover Health’s profitability, liquidity, future performance, future operations and future results. These statements are subject to known and unknown risks, uncertainties and other factors that may cause Clover Health’s actual results, levels of activity, performance or achievements to differ materially from results expressed or implied in this press release. Additional information concerning these and other risk factors is contained in Clover Health’s most recent Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the “SEC”) on March 14, 2024, and in our subsequent filings with the SEC, in each case where relevant, including the Risk Factors sections therein, and in its other filings with the SEC. The forward-looking statements included in this press release are made as of the date hereof. Except as required by law, Clover Health undertakes no obligation to update any of these forward-looking statements after the date of this press release or to conform these statements to actual results or revised expectations.

Investor Relations Contact:
Ryan Schmidt

Press Contact:
Andrew Still-Baxter


What is the new CMS Star rating for Clover Health's PPO Medicare Advantage plans for 2025?

The new CMS Star rating for Clover Health's PPO Medicare Advantage plans for 2025 is 3.5 Stars.

How many members are affected by Clover Health's new Star rating?

Over 95% of Clover Health's Medicare Advantage membership is affected by the new Star rating.

When was the new Star rating for Clover Health's PPO Medicare Advantage plans announced?

The new Star rating was announced on June 14, 2024.

What impact does the improved Star rating have on Clover Health's financial outlook?

The improved Star rating significantly enhances Clover Health's financial outlook for 2025, providing opportunities for membership growth and profitability.

Why is the new Star rating important for Clover Health?

The new Star rating is important for Clover Health as it enhances member benefits, improves financial performance, and supports future growth strategies.

Clover Health Investments, Corp.


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