Humana files second lawsuit challenging Medicare Advantage star ratings
Insurance company Humana has filed a second lawsuit in federal court, challenging the star ratings it received on its Medicare Advantage plans. The ratings are applied by the Centers for Medicare & Medicaid Services (CMS) in an attempt to evaluate how well particular plans serve patients. The metric also dictates certain quality-based bonus payments that CMS pays out to insurers, with those ranked 4 stars or higher earning the benefits.
Some of the Humana plans at the center of this lawsuit dipped below the 4-star threshold, allegedly over three customer service phone calls made by CMS. The agency tests insurer customer service systems as part of its rating criteria.
In attempting to make contact, CMS said two of the calls disconnected early, apparently due to internet connection disruptions. However, the agency has a no-callback policy, meaning Humana was docked for the negative interaction all the same.
The third call CMS marked as “completed,” but Humana said it never formally took place, perhaps as a result of a technical error or a miscommunication. The insurer disputes that any interaction with a CMS representative occurred.
All the same, CMS rated the customer service experience as poor and penalized the insurer. The company appealed the docked rating, questioning the objectivity of the rating criteria. As an internal policy, CMS does not reveal the full methodology of its ratings. However, the point calculations it did report, Humana claims, were difficult to validate.
Judge dismisses case; insurer refiles
The appeal was thrown out in April and made its way to a federal court. On July 18, a judge dismissed Humana’s case on the basis that the insurer failed to exhaust the appeals process used by CMS, leaving open the possibility of future challenges.
That lawsuit sought to challenge the entire star rating process, going beyond the disputed customer service interactions that CMS said led to the lower Medicare Advantage ratings.
Mere days after that dismissal, Humana refiled its lawsuit with a narrower scope, focusing entirely on the customer service interactions. The insurer claims they are demonstrably not at fault for the disconnects, and the poor customer service experience never happened.
They have asked a judge to expedite a ruling. A favorable decision could force CMS to throw out the phone calls, resulting in a 0.5-star rating boost that would push Humana’s plans into the 4-star level necessary for bonus payments.
Those payments are used to boost the services the plans offer, ultimately making them more competitive to seniors looking for Medicare Part C coverage.
The new lawsuit challenging CMS was filed on July 22.
Star ratings face constant legal challenges
In January, CMS dropped its appeal of a court ruling in favor of UnitedHealthcare, stemming from a similar dispute over star ratings for Medicare Advantage plans. UnitedHealthcare initially sued, arguing that CMS’s method of calculating star ratings for its Medicare Part D plans was unfair because it relied on a single phone call made by a third-party contractor to test foreign language customer service.
A federal judge in Texas agreed that using one eight-minute call to justify lowering the insurer’s 2025 star rating—from a perfect five to four—was unjust, and ordered CMS to disregard the call and reconsider its rating process.
Star ratings have become a contentious issue for the insurance industry, with major companies like Centene, Elevance Health and Blue Cross Blue Shield of Louisiana, and now Humana, all pursuing similar lawsuits.
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.