Federal Court Boosts Alignment Healthcare's Medicare Advantage Star Rating

Alignment Healthcare (ALHC) achieved a significant legal victory when a federal court ruled in its favor on June 9 regarding a dispute with the Centers for Medicare & Medicaid Services (CMS). This ruling led to an upward adjustment of ALHC's Arizona HMO 2025 Medicare Advantage star rating from 3.5 stars to 4 stars.

The star rating system, managed by CMS, is a critical quality measure affecting Medicare Advantage plans, assessing aspects such as preventive care, chronic disease management, customer service, and member satisfaction. With this revision, all of Alignment Healthcare's Medicare Advantage members in Arizona are now enrolled in plans rated 4 stars or higher, reflecting high standards of care quality and service. CMS awards bonus payments to plans achieving 4 stars or above, which are then used to enhance member benefits and services, emphasizing the financial and operational significance of star ratings in the Medicare Advantage market.

This court ruling highlights the ongoing regulatory and compliance interactions between Medicare Advantage providers and CMS, influencing plan positioning and competitiveness within the Medicare landscape. Alignment Healthcare’s CEO highlighted that this decision underscores the accuracy and fairness necessary in Medicare Advantage star evaluations, reinforcing stakeholder confidence in endorsed health plans for Arizona beneficiaries.