Alignment Healthcare filed a lawsuit on Oct. 9 against CMS and HHS over 2027 Medicare Advantage star ratings.
The complaint, filed in the District of Columbia’s federal court, follows CMS’ release of MA star ratings on Oct. 8. The star ratings drive quality bonus payments to health plans.
The lawsuit argued that CMS set measure specifications through sub-regulatory technical notes, rather than notice-and-comment rulemaking. The complaint cited 10 measures that did not have specifications established “by regulation,” including the annual flu vaccine, reducing the risk of falling and customer service.
“CMS has listed out the names and high-level descriptions of the measures in prior Federal Register announcements,” the complaint said. “But CMS has not provided in the Federal Register the specifications for how the measures are determined.”
Clover Health litigation radically shook up star ratings in 2026 after a judge determined the improper inclusion of 20 measures. While 10 measures fell outside CMS’ statutory authority, the court also determined 10 measures were not promulgated “by regulation,” the recent complaint said.
In June, CMS said the ensuing recalculations were not a reflection of what the 2027 star ratings methodology would look like. Alignment’s lawsuit said CMS “inexplicably refused” to exclude the latter 10 measures from the broader 2026 recalculations. The Trump administration also appealed the Clover decision.
In its October complaint, Alignment alleged that CMS used the second set of 10 measures again in its 2027 ratings, leaving its plans with lower ratings than they should have received. The insurer said it would lose out on more than $200 million in 2028 payments as a result. The plaintiff called for a recalculation of its latest ratings.
This is not Alignment’s first time pursuing legal action against CMS due to star ratings. Alignment filed a complaint in July 2026 amid the recalculations. Several insurers filed lawsuits over their 2026 star ratings and previous ratings, as well.
CMS told Becker’s that it does not comment on pending litigation.
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