Dive Brief:
- Centene is suing the government in a bid to hike its Medicare Advantage star ratings for 2027, the latest insurer to try to capitalize on a legal grey area in how CMS calculated the coveted quality scores.
- In a lawsuit filed Thursday in Georgia district court, Centene argued that federal regulators used illegal measures to determine 2027 stars, causing the insurer’s ratings to slip and threatening hundreds of millions of dollars in revenue.
- Centene is asking the court to set aside its 2027 star ratings and force the CMS to recalculate them without the disputed measures.
Dive Insight:
It’s at least the third lawsuit against the CMS from an insurer upset about their 2027 star ratings, which run from 1 to 5 stars and are tied to a bevy of competitive advantages in the privatized Medicare program.
The lawsuits all take issue with the measures that the CMS factored into the scores. A court ruled that 20 measures were illegal this spring, but the CMS still used some in calculating 2027 scores for all insurers except Clover Health, the plaintiff in that case.
That’s unfair, according to the suits, which reiterate the legal arguments that were successful in the Clover litigation: The CMS doesn’t have statutory authority to consider certain measures, and started using others without a proper notice-and-comment period. However, the insurers are targeting a grab bag of different measures depending on what factors depressed their particular scores.
Alignment Healthcare — the first insurer to sue, after seeing a disastrous drop in its star ratings — is suing to overturn 10 measures. Healthfirst, which filed its complaint a week ago, is seeking to overturn five measures.
Now Centene is taking issue with 17 measures, after the percentage of members in plans rated 4 stars or above slipped from 16% in 2026 to 12% in 2027.
Centene said that dozens of its contracts received lower stars because regulators used the disputed measures. The St. Louis-based insurer estimates it’ll lose out on $448 million in quality bonus payments and rebates in 2028, the year in which payments are adjusted based on 2027 scores, as a result.
In addition, two of Centene’s contracts are set to receive a “low performance indicator” rating on the Medicare plan portal, given their rating fell below three stars. That could put seniors off from signing up for its plans, threatening their long-term sustainability, Centene said.
A spokesperson for the CMS said the agency does not comment on pending litigation. But the “CMS has effectively conceded the validity of the legal arguments underlying this case, as there is no material legal distinction between the measures excluded for Clover and those challenged by Centene here,” Centene argued in its complaint.
Complaints that the CMS plays fast and loose with the star ratings methodology are not new. But they’re getting louder as insurers — attempting a turnaround after a difficult few years in MA — become more desperate to defend their revenue in the privatized Medicare program.
Star ratings also face criticism from budget hawks and health policy researchers that the system doesn’t improve plan quality and may be contributing to overpayments.
