CVS

By Kathryn Hardison

Shares of CVS Health Corp. fell 4.6% to $94 in after-hours trading on Thursday after the company said 2024 revenue is likely to take a hit as one of its Aetna health plans in the U.S. is downgraded.

The Centers for Medicare and Medicaid Services recently released its 2023 Star Ratings for Medicare Advantage and Medicare Part D prescription drug plans, and it expects a drop in Aetna Medicare Advantage members in 4+ Star plans to 21% from 87% last year.

CVS said the main driver of this decrease was that the Aetna National PPO dropped in CMS ratings from 4.5 Stars to 3.5 Stars, while many other Aetna plans remain rated at 4+ Stars.

The lowered rating for the Aetna National PPO means that it will no longer be eligible for CMS' quality bonus payments in 2024. Consumers will have access to the 2023 Star Ratings during the upcoming health insurance open enrollment period that begins this month.

For 2024, CVS said it plans to mitigate some of the hit from the loss of the Star bonus payments through its ongoing contract diversification efforts.

CVS plans to grow adjusted per-share earnings at low double-digit rates. The company is evaluating operational initiatives and share repurchase programs to help to offset the projected earnings headwind, it said.

The company said the change in ratings isn't expected to alter the company's guidance for this year.

Write to Kathryn Hardison at kathryn.hardison@wsj.com

(END) Dow Jones Newswires

October 06, 2022 18:23 ET (22:23 GMT)

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