Two more Medicare Advantage insurers are suing CMS over their 2026 star ratings, arguing the agency did not go far enough when it adjusted the ratings following a major court loss to Clover Health earlier this year.
SCAN Health Plan sued July 7, and Alignment Healthcare followed July 10, both in federal court in Washington, D.C. Each is asking the court to raise its rating from 4 stars to 4.5 stars, a half-star increase that could be worth tens or hundreds of millions of dollars in quality bonus payments. Notably, both insurers are represented by the same law firm.
The lawsuits trace back to Clover’s win in May, when a federal judge in Georgia found CMS had improperly used a series of quality measures to calculate Clover’s 2026 rating. In June, CMS recalculated ratings for some plans but applied only part of that decision, dropping one set of measures while keeping another set of 10 that the court had found were never put through the formal rulemaking process. SCAN and Alignment argue CMS should have removed those 10 measures for all plans, including theirs.
SCAN asked CMS to redo its rating June 29, and Alignment made a nearly identical request July 7. In both cases, CMS denied the request the same day, saying its recalculation would stand.
In its complaint, SCAN called the star ratings system “undeniably broken” and said dropping the disputed measures would lift two of its contracts to 4.5 stars, thereby making it eligible for roughly $125 million more in payments. Alignment said the same change would raise three of its contracts to 4.5 stars, worth more than $50 million.
The two lawsuits are the latest in a wave of litigation over Medicare Advantage star ratings in recent years. Elevance filed suit ahead of SCAN and Alignment, and CareFirst BCBS sued earlier this year as well.
In 2024, CMS recalculated ratings for all plans after SCAN and Elevance won separate challenges that year. Alignment also lost an appeal this week in a different case involving its 2025 ratings.
“We are challenging our 2026 Star Ratings for the same reason we challenged our 2025 Star Ratings — the stakes are high for our members,” Renée Delphin-Rodriguez, Chief Legal Officer & General Counsel for SCAN Group & SCAN Health Plan, told Becker’s in a statement. “$125 million—most of which will go to our provider partners and to fuel richer benefits for members—hangs in the balance and impacts our ability to offer meaningful programs, services and innovations that enhance the care experience for older adults. SCAN led the first successful challenge of the star rating program in federal court to ensure that the process is fairly and accurately applied, and we’re here to do the same thing again. Taking this action reflects our commitment to maximizing our ability to invest in the people and communities we serve.”
Alignment shared the following statement with Becker’s:
“The recent federal court decision in the Clover Health case underscores an important principle: CMS must administer the Medicare Advantage Star Ratings program consistent with the governing statute and applicable administrative law. While every case turns on its own facts, the decision reinforces that plans are entitled to a transparent and lawful ratings methodology.
Alignment Healthcare filed this action to protect the integrity of the Medicare Advantage Stars program and to ensure that all plans are evaluated under clinically validated standards developed in consultation with Medicare Advantage organizations, providers, seniors, and other stakeholders. Accurate Star Ratings are critical because they influence consumer choice, quality incentives, and the resources available to serve Medicare beneficiaries.
We respect the judicial process and will present our case in court. Because this matter is pending litigation, we will not comment on the specific legal arguments beyond our court filings. Our focus remains on delivering exceptional care, improving health outcomes, and advocating for a legally compliant and predictable regulatory framework for all Medicare Advantage organizations.”
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