Two More Insurers Sue CMS Over Medicare Advantage Star Ratings as Legal Battle Widens

The legal dispute over how CMS calculates Medicare Advantage star ratings has grown significantly this month. SCAN Health Plan filed suit July 7 and Alignment Healthcare followed on July 10, both in the U.S. District Court for the District of Columbia. The two cases build on a May 27 ruling in Clover Insurance Company v. HHS, in which a federal judge found that CMS had improperly used two groups of metrics when calculating Clover's 2026 star rating, because those measures were never put through formal notice-and-comment rulemaking.

In response to the Clover ruling, CMS recalculated ratings for all Medicare Advantage insurers, but it dropped only one of the two contested measure sets and kept the other. SCAN and Alignment argue that CMS should have dropped both sets in the industry-wide recalculation, as the court required for Clover, and that retaining the second set for all other plans is arbitrary and unlawful. Both insurers say the outcome would lift their plan contracts to higher star tiers.

Star ratings determine eligibility for quality bonus payments from CMS. Plans rated four stars or higher receive additional per-enrollee payments, which plans may use to fund supplemental benefits. Consumer advocates note that star ratings also appear on Medicare Plan Finder and influence enrollment decisions.

CMS, which did not comment on the pending litigation, has separately appealed the original Clover ruling to the U.S. Court of Appeals for the Eleventh Circuit, signaling it may seek to reverse the finding that drove the recalculations.