Another insurer sues CMS over Medicare Advantage plan star ratings for 2027
Another insurer is suing the Centers for Medicare & Medicaid Services (CMS), challenging the agency’s 2027 Medicare Advantage star ratings.
In a complaint filed with a U.S. District Court in Georgia, Centene argues that regulators violated the Administrative Procedure Act, a federal law that outlines the authority agencies have to enforce acts of Congress—in this case, laws related to the privatized Medicare Part C program.
Specifically, the insurer takes issue with 17 measures CMS used to adjust ratings for the new year, which the company says violate “core statutory safeguards” guaranteed by the Administrative Procedure Act.
A number of Centene Medicare Advantage plans received lower ratings after a recent reevaluation of grades from CMS, done every year in an effort to guide consumers into finding a plan that meets certain quality standards for customer service, network size and reimbursement speed.
Centene said enrollment in its plans rated 4 stars or higher—a maximum of 5 stars—is down 18%.
“In implementing each of the individual Star measures that Centene challenges, CMS violated applicable law and thereby caused Centene to lose out on hundreds of millions of dollars in revenue that Centene could use to strengthen benefits, reduce premiums, and improve health outcomes,” the complaint reads.
Centene is the second insurer to file a lawsuit, after Alignment Healthcare sued earlier this month, mere days after CMS released its new ratings. Many of the issues raised in the complaint echo those made by Centene.
Clover Health's court victory
In July, another medical payer, Clover Health, won a victory in federal court in its challenge of CMS’ 2026 Medicare Advantage score, with a court tossing some of the criteria the agency used in its rankings that a court agreed could not be consistently applied to all insurance companies.
In the ruling, a court ordered CMS to vacate 20 metrics used to grade Clover Health’s plans, with 10 tossed entirely, meaning they could not be used to grade any Medicare Advantage plans.
A lower star rating means an insurer will be paid less in subsidies by CMS for offering the plans, something Alignment mentioned when filing its complaint.
"Our lawsuit seeks to ensure that the star ratings program operates as Congress intended and that Alignment is properly compensated for the care we provide," the company wrote. "We respect the judicial process and will present our case in court. Because this matter involves pending litigation, we will not comment on the specific legal arguments beyond our filings."
Alignment believed some of the criteria CMS used to grade its plans had been thrown out by the court in the Clover Health decision. Centene appears to be arguing the same in challenging 17 metrics used for its plans.
Notably, of the 20 metrics thrown out, the agency had the option to adjust 10 of them for future use, assuming it complies with the court’s ruling to ensure they can be applied consistently.
The facts in both lawsuits have yet to be determined and CMS has not publicly responded to the complaints. Both are still making their way through the court process.
The agency has filed an appeal to the court's decision related to Clover Health.
Chad is an award-winning writer and editor with over 15 years of experience working in media. He has a decade-long professional background in healthcare, working as a writer and in public relations.