Humana, one of the country’s largest Medicare Advantage organizations, is suing the Centers for Medicare & Medicaid Services over its 2025 star ratings results.
In a lawsuit with nonprofit trade association Americans for Beneficiary Choice, the insurer said the federal government's “arbitrary” actions violates the Administrative Procedure Act.
“The data and calculations underlying the annual star ratings are dizzyingly complex, and at a first glance, this suit may appear to be a dry disagreement over technical details,” the health plan said. “It is anything but.”
Humana argues CMS is not following its own regulations by not disclosing all star ratings recalculation criteria and cooperating with the company’s questions, as well as calculating two star ratings measures incorrectly.
"Humana’s decision to take this legal action came only after careful consideration," a spokesperson told Fierce Healthcare. "We believe this litigation is in the best interest of Humana members and is necessary to ensure star ratings are accurate, trustworthy and representative of plan quality."
Under this year’s star ratings, 94% of Humana’s MA enrollees were in four star plans or better. For 2025, only one-quarter of its members will be in similarly valued plans because cutpoint thresholds, or the metrics plans must meet, increased sharply. More broadly, 18.71% of enrollees were in 3.5 star plans in 2023, versus 27.71% in 2025.
UnitedHealth Group recently sued CMS, claiming one customer service phone call unfairly tanked its the company’s star ratings. Humana’s lawsuit argued three phone calls were scored unfairly.
Two phone calls were disconnected early due to third-party internet connection interruptions, but CMS callers do not accept callbacks. Another call was categorized incorrectly, Humana said, because no one on either end communicated but the insurer was still penalized.
Strategy firm Capstone believes the lawsuit is a smart move by Humana, an analyst note shared with Fierce Healthcare shows. The filing occurred in the District Court for the Northern District of Texas with business-friendly Judge Reed O’Connor.
Humana says it was not able to review and validate CMS’ scores, a common practice, the insurer argues, related to the government’s handling of recent industry-wide star ratings complaints. Humana said it could not replicate 60% of CMS’ cutpoint calculations once the final star ratings were released. If scored incorrectly, even small variations can have significant financial ramifications.
Two other insurers, Elevance Health and SCAN Health Plan, already successfully won star ratings lawsuits against the feds.
Plans that receive higher star ratings are subject to greater rebates from CMS, helping attract and retain beneficiaries to its plans.