CVS Health (NYSE:CVS) CEO Karen Lynch said Tuesday that she was “optimistic” about how its Medicare Advantage plan will be rated when the US Centers for Medicare and Medicaid Services releases its ratings next month.
“I’m optimistic about where we will kind of land relative to our Stars performance based on the kind of internal indicators I have,” Lynch said during a Tuesday morning presentation at the Morgan Stanley Healthcare Conference.
“Medicare is an important area for us for our long-term growth,” she added.
CVS shares were up 3% midday Tuesday following the remarks.
Shares of CVS have been moving higher since Monday, when Wolfe Research said it believed the “probability was high” that CVS would attain a 4-star rating for its Medicare Advantage, or MA, PPO plan for next year. The ratings are generally released in October.
Wolfe also upgraded CVS to outperform, with a price target of $80, citing the company’s risk/reward profile.
Last October, CVS shares took a hit after it was disclosed that the company’s Aetna MA PPO plan had been cut to 3.5 stars by CMS. Aetna is a unit of CVS Health.
Under the Affordable Care Act, MA plans with a rating of 4 stars or above are eligible for bonus payments.