Dive Brief:
- The CMS is appealing a federal court’s decision requiring the agency to recalculate Medicare Advantage stars for insurer Clover Health.
- The appeal, filed Tuesday in the 11th Circuit, comes two months after the CMS lost a lawsuit in which Clover Health claimed a number of metrics used to calculate its MA stars were illegal and unfair. The CMS increased Clover’s stars as a result, and later recalculated stars for other MA insurers.
- The CMS did not detail its reason for appealing, and the HHS did not respond to a request for comment.
Dive Insight:
Clover filed its lawsuit against the CMS in November, arguing a number of metrics used by the agency caused its MA stars to unfairly drop.
Superior stars are coveted in the industry, as higher ratings can represent billions of dollars in bonuses for insurers. How the federal government calculates them is often the subject of scrutiny, and insurers have increasingly turned to the courts in a bid to boost their MA stars.
Clover argued regulators improperly factored 20 metrics into their calculations for 2026 stars, causing the star ratings of its largest plan to plummet and leaving the company with $120 million less in bonus payments.
A judge agreed in May, ordering the CMS to recalculate Clover’s stars without the disputed measures.
Last month, the CMS said it would recalculate MA stars across the industry. However, the agency reran stars for other insurers using some of the contested measures in the Clover lawsuit.
That decision prompted a spate of suits from other insurers, who argue regulators should use the same methodology to recalculate their stars as they did with Clover.
Elevance, in its lawsuit, argued regulators deprived the company of $115 million. In other lawsuits, SCAN Health argued it lost out on $125 million while Alignment Health says it missed out on $50 million.
Clover did not respond to a request for comment.
