A judge has dismissed Humana’s lawsuit challenging its Medicare Advantage star ratings.
In a July 18 order, U.S. District Judge Reed O’Connor dismissed the case without prejudice, meaning it could be reintroduced.
In his filing, Mr. O’Connor wrote that Humana had not exhausted all of its administrative appeal options at the time the lawsuit was filed. Humana did not have standing to sue before completing CMS’ appeals process, he said.
Humana saw a 94% decline in the number of members in contracts rated four stars or higher from 2024 to 2025. It expects the ratings downgrade to hurt earnings in 2026.
The company filed its lawsuit in October, asking CMS to recalculate its 2025 star ratings.
Humana argued that CMS did not follow its own regulations in its methodology for calculating ratings, and alleged CMS did not provide Humana with necessary data to determine why star rating cut points moved upward for 2025.
In a statement shared with Becker’s, a Humana spokesperson said the case was dismissed “on administrative grounds.”
“The decision indicated the Court lacks jurisdiction to hear the case as Humana had not exhausted the optional administrative appeals process at the time of filing,” the spokesperson said. “However, as of today, we have exhausted the administrative appeals process with CMS. We will explore all available legal options, which could include either an appeal of today’s order or a refiling of the lawsuit.”
Several other insurers have sued to challenge their Medicare Advantage star ratings. The cases have had mixed outcomes, with the court finding for UnitedHealthcare and Centene, while ruling against Florida Blue, Blue Cross Blue Shield of Louisiana and others.
In June, Humana CEO Jim Rechtin told investors the company is planning its MA strategy assuming the company would lose its star ratings challenge.
“We don’t know what those outcomes are, but that’s how we have to plan the business,” he said.
