Elevance Health sues over Medicare Advantage star ratings amid Clover Health precedent

Elevance Health sued CMS over its refusal to recalculate star ratings after the Clover Health precedent, claiming the agency's handling will cost the insurer about $115 million in quality bonus payments.

Objective Facts

After a May 2026 federal court ruling that found 20 measures in CMS's 2026 star ratings calculation unlawful, CMS recalculated Clover Health's ratings while refusing to extend the same recalculation to other insurers. Elevance Health filed suit on July 1 in the U.S. District Court for the Southern District of Georgia, alleging that the agency's handling will cost the insurer about $115 million in 2027 quality bonus payments. According to Elevance's complaint, 10 measures were based on unauthorized data sources while another 10 lacked required notice-and-comment rulemaking. Instead of applying Clover's methodology broadly, CMS issued a June 17 memo to recalculate 2027 ratings for certain contracts using a different set of exclusions. Two weeks later, SCAN Health Plan and Alignment Healthcare filed separate lawsuits with identical arguments, with SCAN claiming $125 million in losses and Alignment claiming $50 million.

Deep Dive

The Clover Health precedent created a legal vulnerability that CMS attempted to manage through selective application. For Clover, CMS reran contracts without all 20 challenged measures, but for other plans, the agency removed some measures addressed in the Clover case, retained others, and cut some that weren't an issue in the lawsuit at all, including complaints against the health plan, metrics on members choosing to leave the plan, and whether a plan makes a foreign interpreter available for customer service. This approach gave Elevance reason to argue its case had merit—if one contract got the judge's ruling while others received the 'better of' a new CMS interpretation or the original rating, how could consistency be justified? Analysts noted that CMS's recalculation decision aligns with the Trump administration's goal of streamlining the star ratings program, suggesting administrative rather than purely legal motivations for the selective approach. However, watchdogs have become increasingly concerned about the star ratings program, especially given research showing it doesn't lead to improvements in plan quality and could be contributing to snowballing taxpayer spending on Medicare Advantage, with federal spending on bonuses expected to exceed $13 billion in 2026, higher than 2025 despite fewer beneficiaries in high-performing plans. The tension is genuine: applying Clover's methodology uniformly would mean larger payouts across the industry, yet refusing to do so invites litigation claiming regulatory inconsistency. The cascade of lawsuits signals the court's decision opened a door that CMS cannot easily close. All three insurers argue that recalculation is effectively required as part of the Clover decision if CMS is complying with the spirit of the ruling compelling the agency to evaluate plans with consistency. CMS faces a choice: expand the Clover recalculation methodology across the industry (costing hundreds of millions more in bonuses) or risk additional litigation on Administrative Procedure Act grounds.

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Elevance Health sues over Medicare Advantage star ratings amid Clover Health precedent

Elevance Health sued CMS over its refusal to recalculate star ratings after the Clover Health precedent, claiming the agency's handling will cost the insurer about $115 million in quality bonus payments.

Jul 15, 2026· Updated Jul 17, 2026
What's Going On
  • In May 2026, a Georgia federal court found 20 measures in CMS's star ratings unlawful, prompting CMS to recalculate Clover Health's ratings while refusing to apply the same treatment to Elevance.
  • Elevance filed suit on July 1 in the U.S. District Court for the Southern District of Georgia, claiming CMS's differential treatment will cost it $115 million in 2027 quality bonus payments.
  • The court found 10 of the 20 disputed measures were based on data sources the Medicare Act does not authorize CMS to consider, while another 10 were procedurally improper because they lacked notice-and-comment rulemaking.
  • CMS issued a June 17 memo recalculating ratings for some Medicare Advantage contracts but created a different methodology for the broader industry, applying fewer measure exclusions to other insurers than to Clover.
  • Following Elevance, SCAN Health Plan and Alignment Healthcare both filed similar lawsuits against CMS for refusing to apply Clover's recalculation methodology industry-wide.
✓ Common Ground
Both Elevance and CMS's own defense acknowledges that Elevance's challenge is reviewable under the Administrative Procedure Act, establishing agreement on the baseline legal framework even if not on the outcome.
Analysts across regulatory perspectives recognized the Clover ruling could trigger industry-wide litigation, reflecting shared expectations about the precedent's consequences.
Across the coverage, watchdog voices and industry analysts acknowledge concern about the star ratings program's efficacy and its relationship to taxpayer spending on Medicare Advantage, though disagreements persist on solutions.
◆ All Sources (10)
Healthcare Dive - Elevance sues CMS after Medicare Advantage stars recalculationHealthcare Finance News - Elevance sues CMS over $115M Medicare Advantage star ratings disputeMedCity News - Elevance Sues CMS Over Star Ratings, Seeks Same Recalculation Applied to CloverFierce Healthcare - Elevance Health sues CMS over MA star ratings recalculationsHealthcare Dive - Two more insurers sue CMS over Medicare Advantage star rating methodologySTAT News - Elevance sues government over $115 million tied to Medicare Advantage star ratingsHealth Care Executive - Elevance Health sues CMS in latest challenge to Medicare Advantage star rating methodologyHealth Care Executive - Two more insurers sue CMS over Medicare Advantage star rating methodologyHealthcare Labyrinth - More Clover Lawsuit Fallout: The Balkanization of Star RatingsFierce Healthcare - Unpacking CMS' decision to recalculate 2026 MA star ratings after Clover Health ruling
Objective Deep Dive

The Clover Health precedent created a legal vulnerability that CMS attempted to manage through selective application. For Clover, CMS reran contracts without all 20 challenged measures, but for other plans, the agency removed some measures addressed in the Clover case, retained others, and cut some that weren't an issue in the lawsuit at all, including complaints against the health plan, metrics on members choosing to leave the plan, and whether a plan makes a foreign interpreter available for customer service. This approach gave Elevance reason to argue its case had merit—if one contract got the judge's ruling while others received the 'better of' a new CMS interpretation or the original rating, how could consistency be justified?

Analysts noted that CMS's recalculation decision aligns with the Trump administration's goal of streamlining the star ratings program, suggesting administrative rather than purely legal motivations for the selective approach. However, watchdogs have become increasingly concerned about the star ratings program, especially given research showing it doesn't lead to improvements in plan quality and could be contributing to snowballing taxpayer spending on Medicare Advantage, with federal spending on bonuses expected to exceed $13 billion in 2026, higher than 2025 despite fewer beneficiaries in high-performing plans. The tension is genuine: applying Clover's methodology uniformly would mean larger payouts across the industry, yet refusing to do so invites litigation claiming regulatory inconsistency.

The cascade of lawsuits signals the court's decision opened a door that CMS cannot easily close. All three insurers argue that recalculation is effectively required as part of the Clover decision if CMS is complying with the spirit of the ruling compelling the agency to evaluate plans with consistency. CMS faces a choice: expand the Clover recalculation methodology across the industry (costing hundreds of millions more in bonuses) or risk additional litigation on Administrative Procedure Act grounds.

◈ Tone Comparison

Unable to provide spectrum-based tone comparison—coverage of this specific story angle does not contain sufficient partisan framing or ideologically distinct commentary to support meaningful left-right comparison. The dominant framing is technical and regulatory rather than ideological.