Bill Oxford
Managed care firms, particularly those focused on Medicare Advantage plans, traded higher on Tuesday after Wolfe Research pointed to better-than-expected CAHPS survey cutpoints that can potentially boost the companies’ Star Ratings for MA and Part D plans.
As part of Medicare’s Star Ratings system, the Centers for Medicare and Medicaid Services (CMS) rewards plans with four or more stars with annual bonus payments, with higher bonuses allocated for plans with higher ratings.
CAHPS cutpoints are used to categorize responses of Consumer Assessment of Healthcare Providers and Systems (CAHPS) surveys, which evaluate patient experience across multiple healthcare measures and help the CMS develop the Star Ratings system.
Citing data published by the Health Services Advisory Group, one of the CMS-sponsored survey vendors, Wolfe analyst Justin Lake argued that “CAHPS cutpoints on Stars appear to be getting slightly easier for 2026.”
“We note much of last year’s tougher cutpoints came from better performance YoY by smaller plans, and should this not be the case for 2026 Stars, it would clearly be a positive for larger MCOs under coverage,” Lake wrote.
Leading Medicare-driven managed care firms: UnitedHealth (NYSE:UNH), Humana (NYSE:HUM), CVS Health (NYSE:CVS), Clover Health (CLOV) and Alignment Healthcare (NASDAQ:ALHC)