A federal court has partially ruled in favor of Alignment Healthcare in a legal challenge against CMS, resulting in the Medicare Advantage company’s Arizona HMO star rating being raised from 3.5 to 4 stars.
All of Alignment’s members are now enrolled in plans rated 4 stars or higher, the company said in a July 8 news release. Alignment filed its original complaint in January, alleging CMS and its contractors made “significant mistakes” in their calculation of the company’s star ratings.
The insurer argued that CMS’s methodology, particularly its use of the Tukey Outlier Rule, was flawed and led to arbitrary results. It also raised concerns about low-reliability survey data and the handling of Spanish-language surveys for some members. While the court rejected most of these claims, it agreed with Alignment that CMS had wrongly included two appeals in the star rating for the Arizona HMO plan, ruling that the inclusion of the appeals was arbitrary and capricious.
Other insurers have sued over star ratings this year. Florida Blue lost its challenge in May, and CMS revised ratings for UnitedHealthcare and Centene after courts ruled in their favor earlier this year.
