A federal judge in Georgia has ruled in favor of Clover Health in its lawsuit challenging its 2026 Medicare Advantage star ratings.
In a May 27 opinion, U.S. District Judge Lisa Godbey Wood partially granted the insurer’s motion for summary judgment, finding CMS improperly included 20 measures in the calculation and ordering the agency to recalculate the company’s 3.5-star PPO rating.
Clover filed the lawsuit in November, alleging roughly $120 million in missed bonus payments as a result of its rating drop from 4 to 3.5 stars for its PPO plan, which covers nearly all of its MA population. The company’s HMO plan received a 4-star rating for 2026 and was not part of the litigation. The order comes just days before the June 1 MA bid deadline, when insurers seek federal approval for their 2027 plans and benefit designs.
The court ruled in Clover’s favor on two grounds. First, it found that CMS improperly relied on 10 measures, including medication adherence measures and call center data, that were not drawn from data collected under its authority governing MA quality improvement programs. The judge also deemed the calculation “procedurally invalid” because CMS failed to undergo required notice-and-comment rulemaking before including a separate set of 10 disputed measures.
“The fact that the ratings trigger statutorily mandated funding increases is more than mere ‘influence’ or an ‘indirect’ effect; it is a deciding principle in the payment amount,” the judge wrote.
While the ruling applies only to Clover, the court’s legal reasoning centers on the statutory framework governing the MA star ratings program broadly, meaning there could be implications for other plans if the decision survives appeal. The federal government has asked the court to reconsider the ruling.
Clover is not the only insurer to challenge its 2026 star ratings. CareFirst BCBS has also sued CMS, alleging that improper calculations cost the insurer about $32 million in quality bonus payments. CMS has faced a slew of star ratings litigation in recent years and in some instances has revised ratings for certain contracts following successful legal challenges, though those cases were narrower in scope than Clover’s lawsuit.
Becker’s has contacted Clover and CMS for comment and will update this story if more information becomes available.
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