Humana Plunges as Medicare Star Rating Cut Threatens Revenue (1)

Humana Inc. shares plummeted the most in 15 years after the insurer suffered a drop in Medicare Advantage quality ratings, posing a drastic threat to revenue.

An annual review by the Centers for Medicare and Medicaid Services slashed the company’s quality ratings that drive bonus payments. The number of members in highly rated plans that generate extra revenue plunged to about 25% from 94% in the US government’s latest assessment, the company said Wednesday.

The shares tumbled as much as 24%, the most intraday since 2009, before paring the loss to 15% as of 10:44 a.m. in New York.

Photographer: Jon Cherry/Bloomberg