CMS drops lawsuit against UnitedHealth over Medicare Advantage star rating
The Centers for Medicare & Medicaid Services (CMS) has dropped its appeal of a court decision that ruled in favor of UnitedHealthcare in a dispute over star ratings for Medicare Advantage plans.
UnitedHealthcare filed the initial lawsuit, claiming that the way the agency calculated star ratings for its Medicare Part D plans was unjust, as it relied on a third-party contractor to survey members and test the insurer’s customer service.
The dispute centered around a single phone call made by the contractor to test the foreign language customer service, which was ruled unsuccessful. However, a federal judge in Texas sided with UnitedHealthcare’s attorneys, who argued that it was unjust for CMS to use a single, eight-minute call as justification to reduce the 2025 star rating for the insurer’s plans—in this case, from a perfect five to a four.
Further, the company argued that problems with the call may have stemmed from an error by the CMS contractor, not the insurer. The judge agreed, ordering the agency to disregard the phone call and potentially change the way it assigns star ratings in the future.
CMS appealed that November ruling but has now dropped the case.
The star ratings have been a sore spot for the insurance industry, with Centene, Elevance Health, Humana, and Blue Cross Blue Shield of Louisiana all pursuing similar legal actions.
Last week, Alignment Health sued CMS over its criteria for calculating ratings, mainly a technical rule that eliminates high scores seen as outliers, effectively preventing insurers from receiving higher scores. CMS has yet to respond to Alignment’s lawsuit.
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