Anthem (ANTM) & Units Receive Medicare Star Ratings From CMS

Anthem, Inc. (NYSE:ANTM) and its units have recently received Star Ratings from the Centers for Medicare and Medicaid Services (“CMS”) for its Medicare Advantage (MA) health plans.

Per CMS, in 2018, more than 60% of Anthem’s Medicare Advantage members will be enrolled in MA plans that have achieved four stars or more, with five stars being the highest limit.

The Know-How of Star Ratings

Star Ratings are calculated every year on a scale of one to five stars (five being the highest limit), and are subject to change. CMS rates MA and Medicare prescription drug plans (PDP) on the basis of how well they provide medication coverage along with a number of factors like the quality of customer service being provided, count and frequency of member complaints, members’ experience with drug plans and the level of safety associated with the drugs.

While assigning the ratings, CMS considers two parameters of the MA and PDPs namely, quality and performance. The MA plans are rated on the basis of their ability to take care of the members’ overall health, help them manage chronic conditions, ensure positive experiences with health plan, attain member satisfaction and offer effective customer service.

Rationale Behind the Ratings

These Star Ratings reflect Anthem’s multi-year focus on the improvement of the quality of its Medicare offerings. It further intends to improve the performance of its health plans moving into 2019. Only 22% members were enrolled in four-star or better plans in 2016 Star Ratings.

Over the last four years, Anthem remained committed to upgrade the performance and quality of its Medicare platform. It has been diligently engaged in providing the MA members greater access to high-quality health care at an affordable cost. The company looks forward to continuously customize its Medicare Advantage product portfolio with further innovation.

Anthem and its affiliated health plans have made significant investments for expanding MA plans product portfolio and services areas. They also worked on local health plan staffing along with strengthening the level of engagement between provider and member. On the back of these efforts, Anthem expects its Medicare business to grow further in 2018.

Share Price Performance

Anthem’s continues focus on creating customer delight has helped the stock retain shareholders’ confidence. In the last year, its shares have gained 57%, outperforming the industry’s rally of 44%.

Zacks Rank & Stocks to Consider

Anthem presently carries a Zacks Rank #3 (Hold).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Investors interested in this space can consider stocks like Humana Inc (NYSE:HUM) , Aetna, Inc (NYSE:AET) , and Centene Corp (NYSE:CNC) . While Humana sports a Zacks Rank #1, the other two stocks carry a Zacks Rank #2 (Buy).

Humana’s earnings surpassed expectations in three of the last four quarters with an average beat of nearly 8.6%.

Aetna’s earnings surpassed expectations in each of the last four quarters with an average beat of nearly 19%.

Centene delivered positive surprises in three of the last four quarters with an average beat of 7.7%.

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