Elevance Legal Challenge Against CMS Over Medicare Advantage Ratings
Elevance is taking legal action against the Centers for Medicare & Medicaid Services (CMS) after the agency revised Medicare Advantage (MA) star ratings for Clover Health more favorably than for other insurers. Earlier this year, a court ruling against CMS led to a reevaluation of Clover Health's 2026 quality scores by excluding 20 initially considered measures. Subsequently, CMS adjusted the star evaluations for other MA plans but omitted measures where Elevance claims it excelled, as stated in its complaint filed in a Georgia district court.
Elevance alleges a loss of $115 million in bonus incentives under the revised rating system and is petitioning the court to mandate CMS to apply the same recalculation method used for Clover Health. The connection between MA star ratings and substantial bonuses has made them a focal point for insurers, especially amid declining profitability in MA markets and increased regulatory scrutiny on overpayments.
Clover Health previously filed a lawsuit contesting a reduction in its star rating from 4 to 3.5 stars, arguing that CMS included inappropriate measures without proper authority. A federal judge in Georgia supported Clover's position, leading CMS to redo Clover's ratings without the disputed measures.
In response, CMS modified scores for all MA insurers, selectively removing some measures relevant to the legal case but retaining others, such as metrics not under dispute like customer complaints. This inconsistency, analysts suggest, may expose CMS to further legal challenges, as Elevance argues the approach lacks logical consistency without specific differences between Clover and other insurers.
Elevance contends it requested a recalibration of its star ratings prior to the lawsuit, but CMS declined. Litigation over star ratings has produced mixed outcomes, marking 2026 as the third instance of CMS recalculating ratings due to legal actions.
Concerns about the MA star rating program's effectiveness in improving plan quality and its financial implications have increased. According to the Kaiser Family Foundation, federal spending on MA bonuses is expected to exceed $13 billion this year, despite a decline in beneficiaries enrolled in high-performing plans. Broader worries persist regarding overpayments within the MA framework, including allegations of insurers manipulating payment structures. CMS nearly suspended new enrollments in Elevance's MA plans over unsupported claims but allowed it to continue after repayments by the insurer last month.