Judge Dismisses Humana's Medicare Advantage Star Rating Lawsuit Pending Appeals

A U.S. District Court judge dismissed Humana's lawsuit challenging its Medicare Advantage star ratings, citing that Humana had not yet exhausted all administrative appeal options before filing the case. The judge's dismissal was without prejudice, allowing Humana to refile after completing the required CMS appeals process.

Humana experienced a significant reduction in its Medicare Advantage contracts rated four stars or higher, dropping by 94% from 2024 to 2025, which is expected to negatively impact its 2026 earnings. The insurer initially filed the suit in October, contesting CMS’s methodology for calculating the 2025 star ratings and alleging insufficient data transparency regarding upward movements in rating thresholds.

Humana has since completed the CMS appeals process and is considering its legal options, including refiling the lawsuit or appealing the dismissal. Similar legal challenges from other insurers have resulted in mixed judicial outcomes, with some companies prevailing and others not. Meanwhile, Humana is proceeding with its Medicare Advantage strategic planning under the assumption it will not regain its previous star ratings, reflecting uncertainty in the regulatory environment around star ratings calculation and disputes.