Elevance Health Challenges CMS in Legal Dispute Over Medicare Star Ratings Recalculation

Elevance Health has initiated legal action against the Department of Health and Human Services and the Centers for Medicare & Medicaid Services (CMS), accusing the agency of unlawfully denying a recalculation of its 2026 Medicare Advantage Star Ratings. The insurer argues that CMS should apply the same correction process it previously granted to Clover Health following a federal court ruling.

Earlier, a federal judge determined that CMS erred in incorporating 20 quality measures—such as medication adherence and call center data—when calculating Clover Health’s 2026 Star Rating. These measures were deemed to rely on unauthorized data sources and to violate public rulemaking requirements. The ruling mandated a recalculation, which elevated Clover’s rating from 3.5 stars to 4.5 stars.

Medicare Advantage Star Ratings directly impact CMS bonus payments, which insurers can use to enhance benefits or lower premiums. Elevance Health contends that applying Clover’s recalculations to its own plans would increase Quality Bonus Payments by $115 million, with five contracts potentially improving from 3-4 stars to 3.5-4.5 stars. The company asserts that CMS’s refusal to extend this adjustment creates an unfair competitive disadvantage in markets where both organizations compete for Medicare beneficiaries.

The lawsuit emphasizes that CMS’s differential treatment lacks legal justification. Elevance argues that if the 20 quality measures were legally flawed for Clover, they should be equally invalid for other Medicare Advantage Organizations (MAOs). The insurer claims CMS violated the Administrative Procedure Act by arbitrarily rejecting similar recalculations for other insurers, despite prior written requests.

This case follows Elevance’s previous challenges to its 2024 and 2025 star ratings, with mixed outcomes. The company now seeks a judicial order compelling CMS to apply the identical recalculations provided to Clover Health.

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