Elevance Health has filed a lawsuit against the government, challenging how the Centers for Medicare & Medicaid Services calculated its Medicare Advantage star ratings. The insurer claims the ratings—which determine billions in bonus payments—were computed inappropriately for 2024.
The lawsuit centers on a $115 million dispute tied to quality bonuses and rebates. Star ratings significantly impact insurer revenue, as higher scores unlock higher payments from the federal program. Medicare Advantage covers more than half of all Medicare beneficiaries.
Elevance contends that CMS failed to follow its own methodology, leading to lower ratings than deserved. A lower rating can cost an insurer millions in lost payments and consumer penalties. The company is seeking a recalculation of the disputed scores.
The case could set a precedent for how CMS handles rating appeals. Other insurers may file similar challenges if Elevance succeeds. CMS has not yet publicly responded to the lawsuit's specific allegations.
Counterargument: CMS may argue that its methodology was applied consistently across all plans, and legal challenges could disrupt the integrity of the star ratings system. Regulatory predictability is crucial for both insurers and beneficiaries.