Three Medicare Advantage (MA) companies are suing CMS over its miscalculation of each company’s MA Star Ratings. Alignment, Elevance, and SCAN Health have each filed their own suits, stating that CMS is not following the full order of the Clover Health case decided last month.
Each company has its own arguments that CMS isn’t following the judge’s ruling in the Clover case regarding how CMS MA Star Ratings should be calculated. Each lawsuit states specific negative revenue impacts for each company due to the CMS Star Ratings miscalculations.
At this point, there’s no indication of a timeline for when each lawsuit will be decided or how quickly any judicial ruling will affect each company’s Star Ratings and revenue. Agility will continue to closely monitor these lawsuits to inform Medicare agents of the latest developments and their potential impact.
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With the ongoing evolution of the insurance market, Agility empowers you to identify your defining characteristic through our team’s expertise, positioning you for growth. With Agility, you also get Dedicated Producer Support at (866) 590-9771 or support@enrollinsurance.com to answer any insurance questions and direct you to our Medicare, ACA, ICHRA, Group, and ancillary experts.
They can also add you to our weekly email list for tips and updates. Let Agility empower you to evolve your capabilities and capture the opportunities in 2026.
In late May, a federal judge determined that the Centers for Medicare & Medicaid Services (CMS) improperly used 20 metrics in calculating Clover Health’s 2026 star ratings. An analysis of this ruling indicates that the court’s decision has sweeping implications, since 10 of the measures should only have been included in the assessment after a CMS notice-and-comment period that didn’t occur in this instance.
Since the agency did not use the appropriate rulemaking process, the court says CMS shouldn’t use these 10 measures to evaluate Clover Health’s 2026 star ratings. The analysis states, “While the scope of the court’s decision is explicitly limited to rectifying Clover’s 2026 Star Rating, the implications for the broader industry are likely unavoidable. Notably, the court’s findings regarding the statutory data limitations are not procedural and cannot be resolved through rulemaking alone; CMS may need Congress’s support in adjusting applicable laws.”
The court says that only Congress can make these changes in the star ratings process, and if CMS wants to add these measures, Congress will have to pass a law.
What CMS Says Are the Next Steps
In a notice last week, CMS said it will recalculate MA plan star ratings based on the ruling and change them only if doing so would increase a plan’s current 2026 star rating. Insurers that see an increase in their scores will be able to resubmit their 2027 bids.
Why this is important to MA plans is that an increase in the current 2026 star ratings will result in CMS paying more revenue to these plans for the care of their members. With this revenue increase, these MA plans can increase their 2027 MA plan benefits on the contracts with better star ratings.
MA Plans had until Monday, June 22, to inform CMS whether they wanted to resubmit their 2027 bids based on recalculated star ratings, and will have until June 29 to submit a new submission. Indications, however, are that many of the largest plans may be negatively affected by this process and won’t resubmit their 2027 bids.
Analysts believe that Aetna, Elevance, Humana, and UnitedHealthcare will not resubmit their 2027 bids, since the new court-ordered star-ratings evaluation process isn’t expected to improve their star ratings for their largest MA contracts.
The Latest in a Long Line of Court Cases
Multiple MA insurance companies have engaged in legal battles with CMS over star rating calculations in recent years. UnitedHealthcare and Centene won court decisions on call center-related metrics, while Humana lost a court challenge in this arena.
SCAN Health Plan won a court decision challenging CMS’s exclusion of outlier contracts from star-ratings calculations. Analysts expect this ruling to trigger more lawsuits by other MA companies on grounds similar to those of Clover Health.
These litigation decisions will be driven by whether CMS decides to appeal this court decision.
The 2027 Implications for MA Agents
With these court wins, Centene, Clover Health, SCAN Health Plan, and UnitedHealthcare might have better 2027 plan benefits than previously expected. Also, any other MA plans that resubmit their 2027 bids might have better bids, since they are taking this action on the expectation that the MA plan will receive a higher star rating under this new Clover Health court ruling.
At this point, we don’t know how this possible 2027 MA bid resubmission process impacts the availability of 2027 plan materials for AEP. Agility will track whether more MA plans resubmit their 2027 MA bids to inform agents of this occurrence, so you can communicate with these plans about the progress of the revised bid materials for AEP.
The Agility Difference
With the ongoing evolution of the insurance market, Agility empowers you to identify your defining characteristic through our team’s expertise, positioning you for growth. With Agility, you also get Dedicated Producer Support at (866) 590-9771 or support@enrollinsurance.com to answer any insurance questions and direct you to our Medicare, ACA, ICHRA, Group, and ancillary experts.
They can also add you to our weekly email list for tips and updates. Let Agility empower you to evolve your capabilities and capture the opportunities in 2026.
