Insurer files lawsuit as CMS releases 2027 Medicare Advantage star ratings
A health insurance company is already taking issue with the newly released 2027 Medicare Advantage star ratings—released last week—by immediately filing a lawsuit, accusing the Centers for Medicare & Medicaid Services (CMS) of violating the law in the methodology for its rankings.
Alignment Healthcare, a payer that operates in five states, filed a lawsuit on Friday, accusing CMS of being “in flagrant violation” of what Congress envisioned for the star rating program when it established Medicare Part C, the privatized form of the federal Medicare program.
According to a filing with a federal court in the District of Columbia, Alignment believes CMS has “completely departed from Congress’s vision of leveraging predictable, valid measures developed with input from providers, plans, and the public” in the development of its star ratings, designed to inform seniors on the value of a Medicare Advantage plan, before they choose to sign up.
The company argues that a lack of consistency in the standard has created a moving target for healthcare payers, one that makes it difficult for companies to meet the target. Alignment argues the fluctuating rating system is a violation of the Administrative Procedures Act, which regulates how federal agencies can enforce acts of Congress.
“Consistent application of the statutory requirements governing star ratings is therefore essential not only to plan payments and competition but also to [ensure] that beneficiaries can rely on the Star Ratings as meaningful and comparable measures of plan quality,” the court filing reads.
Past decisions in focus
The complaint by Alignment directly references a series of lawsuits from other insurers questioning the criteria CMS deploys for Medicare Advantage star ratings, most prominently the court victory from another healthcare payer, Clover Health.
In July, when the insurer won its lawsuits against CMS—which resulted in the agency vacating the ratings for Clover plans and eliminating certain criteria per a court order—multiple other medical insurers soon requested the same treatment.
Per the court ruling in favor of Clover, 20 of the metrics CMS used to apply its ratings were struck down, largely because they could not be consistently applied, thus a judge determined they could not be used to give ratings to payer plans.
Of the 20 metrics, 10 were thrown out entirely, meaning they could not be used in the future.
Categories the agency uses to rate plans include customer service reliability, the speed of reimbursement for patient care, and other categories that attempt to measure the value of how a company is managing a Medicare Advantage plan.
Alignment’s lawsuit echoes some of the complaints of this court ruling in favor of Clover.
"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," Alignment said in a statement. "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."
"Our focus remains on delivering exceptional care, improving health outcomes and advocating for a stable, lawful regulatory framework that supports seniors and strengthens the Medicare Advantage program.”
CMS has yet to respond to the newly filed lawsuit.
On its website, Alignment boasted that six of seven of its Medicare Advantage contracts earned four stars or higher, out of a maximum of five.
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.