UnitedHealthcare successfully won its lawsuit over the Centers for Medicare & Medicaid Services (CMS), a federal judge determined Nov. 22.
The decision (PDF) mandates the CMS to recalculate the insurer’s star ratings for the 2025 plan year because the agency violated the Administrative Procedure Act of 1946 by incorrectly marking a test call unsuccessful.
“Defendants shall recalculate plaintiffs’ 2025 star ratings without consideration of the disputed call and shall immediately publish the recalculated star ratings in the Medicare Plan Finder,” the court order read.
UnitedHealthcare sought corrected ratings in late September, alleging the CMS unfairly downgraded the company’s star ratings all because of one eight-minute phone call. The phone call, which was scored as four stars out of five on the call center measure, was rated poorly due to a CMS test caller’s mistake, not the insurer’s error, the health plan argued.
Just one unsuccessful call prevents a plan from earning a five-star rating on the measure, potentially costing an insurer millions of dollars. Star ratings, ranging from one to five, have a profound impact on a Medicare Advantage plan’s ability to enroll new members and receive funds. UnitedHealthcare could now earn significantly more from quality bonus payments for 2026.
It is the third star ratings suit the CMS has lost in recent months, after judges sided with Elevance Health and SCAN Health Plan for the 2024 plan year over other star ratings complaints, though the court noted that those cases were not “similarly situated” and had unique issues.
Other insurers, such as Centene, Elevance Health, Humana and Blue Cross Blue Shield of Louisiana, have sued CMS this cycle.
The court, however, did agree with plaintiffs that UnitedHealthcare pointed out the CMS’ error months earlier, but the agency did not move to fix the issue. It also determined the CMS should not have delegated test calls and call center performance to private contractors.