Yet another major insurer is taking the federal government to court over all-important star ratings results.
Calling out a methodology that is “fraught with statistical variance” that creates the “illusion of precision” Elevance Health claims the Centers for Medicare & Medicaid Services unfairly penalizes health plans and hides certain data.
Elevance scored a 3.749656 on one contract, which rounds down to 3.5 stars. If the contract scored 3.75, it would have rounded up to four stars. The insurer said variance means scoring a rating to the millionth decimal arbitrary and capricious.
The plaintiffs estimated the rounding difference is equal to $375 million in damages, which impacts the funds available to Elevance to market contracts and improve benefits for members.
Two other contracts also scored lower due to “case-mix adjustments” but the data is hidden from insurers, the lawsuit reads. For example, one measure scoring the prescription drug plan was rated poorly from CMS, but Elevance is unable to replicate or audit the measure.
Star ratings, measured on a scale of one to five, are used by CMS to determine the highest quality health plans from lower quality plans. Contracts that receive a star rating of four or better receive larger quality bonus payments.
Other recent star ratings lawsuits argue a select number of customer service calls were scored unfairly. Overall, star ratings dipped in 2025, as intended through enforcing higher cutpoint thresholds.
CMS was forced to rework quality ratings for 2024 after SCAN Health Plan and Elevance successfully won star ratings lawsuits.
Elevance operates plans in 22 states to nearly 3 million Medicare beneficiaries.