Alignment Healthcare sues Medicare agency over 2027 star ratings
Health insurer Alignment Healthcare has sued the federal Medicare agency over its 2027 star ratings, Healthcare Dive and Fierce Healthcare reported. The insurer says the agency used rules that were never put through the proper public process. It wants a court to throw out the ratings and redo them, Healthcare Dive reported.
Alignment Healthcare has sued the Centers for Medicare & Medicaid Services in a bid to overturn a sharp drop in its 2027 Medicare Advantage star ratings, Healthcare Dive and Fierce Healthcare reported.
The California-based insurer filed the complaint Friday in federal court in Washington, D.C., one day after CMS released the ratings, Healthcare Dive reported. Alignment argues the agency's methodology is illegal because it was not adopted through formal rulemaking.
The suit says CMS spelled out key measures in "technical notes" instead of the notice-and-comment process, which violates the Administrative Procedure Act, Fierce Healthcare reported.
"Once again, CMS has used the same ten measures in calculating Alignment's 2027 Star Ratings without first promulgating them 'by regulation,' as Congress expressly required," Alignment argues in its complaint, Healthcare Dive reported.
Alignment is asking the court to throw out its 2027 ratings and make regulators recalculate them before the 2028 Medicare selling season, Healthcare Dive reported. The drop is set to cost the insurer more than $200 million in 2028 payments, according to the complaint.
Star ratings run from 1 to 5 stars and affect bonus payments and how plans compete, Healthcare Dive reported. Alignment covers about 240,000 members in five states.
The suit builds on a Georgia court ruling in a case brought by Clover Health, both outlets reported. That court found 10 measures exceeded CMS' authority and 10 others were adopted improperly. CMS recalculated scores but set aside only the first 10, and it kept that approach for 2027, Alignment argues, according to Fierce Healthcare. Alignment is already challenging its 2026 ratings on the same grounds, Healthcare Dive reported.
"Our lawsuit seeks to ensure that the Star Ratings program operates as Congress intended and that Alignment is properly compensated for the care we provide," Alignment said in a statement to Fierce Healthcare. CMS did not respond to Healthcare Dive's request for comment.
What we know: Alignment sued CMS in D.C. federal court to vacate and recalculate its 2027 star ratings.
What we don't: How the court will rule and whether other insurers will file similar suits.
Where outlets agree Healthcare Dive and Fierce Healthcare both report that Alignment sued CMS in federal court in Washington on Friday over its 2027 star ratings.
Where they differ Healthcare Dive reports that the share of Alignment members in plans rated at least 4 stars fell from 98% to 25%, while Fierce Healthcare reports a drop from 100% to 25%.