Elevance Health has filed a lawsuit in the District of Columbia federal court, alleging that the 2027 Medicare Advantage star ratings calculations breached the Administrative Procedure Act by utilizing 11 unlawfully adopted measures, making it the latest insurer to take legal action against the federal government over its performance in the latest round of star ratings.
Financial and reputational harm
According to the lawsuit, the inclusion of these measures causes “concrete and substantial” harm. If they were excluded, Elevance estimates the move would increase the scores for 12 of its Medicare Advantage contracts and generate $516 million in additional quality bonus payments. The company contends that these funds could otherwise support broader supplemental benefits, lower premiums and cost-sharing, and improved care coordination.
The insurer also argues that the artificially depressed ratings undermine the very comparison the program is supposed to enable. “Beneficiaries cannot make informed coverage choices when the government’s own comparison tool conveys a distorted assessment of the plans available to them,” Elevance stated. The company adds that the lower scores place it at a competitive disadvantage and provide prospective enrollees with inaccurate information.
Widespread legal challenges
Aetna, the Medicare Advantage business of CVS Health, is the second insurer to sue over the 2027 scores, filing a complaint in Georgia’s Southern District Court on Monday. The company argues that 28 measures used by the Centers for Medicare & Medicaid Services to calculate its scores were “unlawfully adopted” and should have been excluded. It cites the same venue that ruled in favor of Clover Health over the summer, which set aside 20 measures used in determining its 2026 scores.
Industry reaction and broader impact
In a complaint filed Thursday in Georgia’s Southern District Court, the company claims the Centers for Medicare & Medicaid Services broke the Administrative Procedure Act by applying 17 disputed measures. Centene alleges CMS ignored key legal protections in implementing these standards.
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The complaint states these measures caused serious financial harm. For 2027, only 9% of Centene’s members are in plans rated four stars or higher, down from 18% the previous year. The company insists CMS violated the law by using these measures, costing Centene hundreds of millions in lost revenue that could have improved benefits, cut premiums, and enhanced patient care.
Without the 17 measures, the company estimates it would have earned an additional $448 million in quality bonus payments for 2028. Those resources would have been used to broaden coverage, reduce costs, and strengthen care coordination programs.
Shift in methodology and legal precedent
The company points to recent legal setbacks for CMS, including a summer decision that invalidated 20 measures used in 2026 ratings. A Georgia judge ruled that 10 measures exceeded CMS’s authority and another 10 were improperly implemented, though CMS only removed the 10 measures found to be legally invalid. While CMS recalculated scores after the ruling, it only removed the 10 measures found to be legally invalid, leaving others in place.
The program’s star ratings are the critical determinant in quality bonus payments to insurers as well as a tool that aims to make it easier for enrollees and brokers to identify benefits with the highest quality, though the source does not explicitly mention brokers. Consistent application of the statutory requirements governing Star Ratings is therefore essential not only to plan payments and competition but also to ensuring that beneficiaries can rely on the Star Ratings as meaningful and comparable measures of plan quality, Alignment said.
