At least five health insurers have now sued CMS over their 2027 Medicare Advantage star ratings, claiming the agency used quality measures that were never formally adopted through the rulemaking process. Combined, the plans say the ratings will cost them more than $3 billion.
Over the last several years, CMS has faced an onslaught of litigation from the industry over how it calculates the ratings, which can lead to millions of dollars in bonus payments for high-rated contracts. In 2024, wins by SCAN and Elevance Health led the agency to recalculate ratings for every MA contract, while challenges to the 2025 ratings produced mixed results for the industry.
In May, a federal judge in Georgia ruled that CMS improperly included 20 measures in Clover Health’s 2026 rating, finding the agency lacked authority for 10 of them and skipped notice-and-comment rulemaking for the other 10. CMS raised Clover’s PPO contract from 3.5 to 4.5 stars and recalculated other plans’ ratings, but only where scores would improve and using a different set of measures. CMS’ 2027 MA rule removes 11 measures the agency described as administrative or lacking meaningful variation, mostly starting with the 2029 ratings.
Here are the five lawsuits filed so far over the 2027 ratings:
- CVS Health, parent company of Aetna, filed Oct. 26 in the Southern District of Georgia, the same court that ruled against CMS in the Clover case. The suit challenges 28 measures across 43 contracts covering roughly 7 million members. All 28 measures were allegedly adopted without notice-and-comment rulemaking and 12 also relied on data sources outside CMS’ statutory authority. CVS said its enterprise-wide weighted average should be 4.5 stars instead of 4, and that every contract at issue would be at least a half-star higher without the disputed measures. The company estimated the ratings will cost it more than $2 billion in 2028 bonus payments and rebate retention.
- SCAN Health Plan also filed Oct. 26, in D.C. federal court, challenging 10 measures on the same rulemaking grounds. Two of the California nonprofit’s contracts received 3.5 stars and two received 4 stars; SCAN said those should be 4 and 4.5, respectively. The plan, which covers more than 435,000 members, said the ratings will deprive it of more than $152 million.
- Centene filed Oct. 22 in the Southern District of Georgia, alleging 17 measures were unlawfully adopted, all lacking notice-and-comment rulemaking and six relying on improper data sources. Centene estimated its enterprise-wide average should be 4 stars instead of 3, and that the difference amounts to roughly $448 million in bonus payments and rebates.
- Healthfirst filed Oct. 19 in the Southern District of New York, arguing five measures in its rating were never formally adopted through rulemaking. The New York City-based plan dropped from 4.5 stars to 3.5 and said the difference would cost it more than $380 million.
- Alignment Healthcare filed suit Oct. 9 in D.C. federal court, challenging the same 10 measures the Clover court found lacked required rulemaking. The insurer said it would lose more than $200 million in 2028 payments as a result of its ratings.
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