One federal lawsuit has set off a chain reaction in the Medicare Advantage world, reshaping star ratings and quality bonus payments — and which plans come out on top.
Typically, on the one-to-five star-rating scale, four stars is the threshold for achieving a quality bonus payment for the upcoming year. This financial incentive could translate to plans building out their supplemental benefits.
In a successful challenge from MA insurer Clover Health, a judge found CMS improperly included 20 star ratings measures in the insurer’s calculation. Clover had contested the rating for its PPO, its largest contract, which saw a bump from 3.5 to 4.5 stars.
CMS announced June 17 that it would “voluntarily” recalculate other 2027 MA quality bonus payments, as well. CMS removed some Part C and all Part D measures and promised to only assign upgrades. Affected contracts then had until June 29 to resubmit bids, which were initially due June 1.
Clover’s HMO contract also got a boost in the process, from 4 to 4.5 stars. For 2026 star ratings, 175 MA prescription drug plan contracts fell just short of the four-star threshold and secured 3.5 stars, according to a November fact sheet.
While the recalculation affects 2027 payments, CMS clarified that it was not making a statement about 2027 star ratings coming out later this year, and the ensuing 2028 quality bonus payment ratings. However, CMS already finalized a 2027 MA rule that will cut back on some star ratings measures.
Like Clover, CareFirst BlueCross BlueShield sued CMS over its own 2026 star ratings in January. In the wake of Clover’s ruling, the judge paused the case for two weeks. On June 22, when that pause was intended to lift, CareFirst submitted a status report saying it plans to resubmit its 2027 bid but would need until the June 29 deadline to determine whether it will continue its legal proceedings.
Star ratings have been redone before. In 2024, CMS similarly recalculated star ratings following methodology challenges from Elevance Health and SCAN Health Plan.
CareFirst and Clover declined Becker’s requests for comment, but Select Health and Longevity Health each backed the recalculation.
“We welcome CMS’ decision to recalculate Medicare Advantage star ratings following a federal court ruling,” Select Health told Becker’s. “The updated methodology more accurately reflects how quality and access to care are evaluated across Medicare Advantage plans.”
Select Health originally received 3.5 stars overall for its HMO plans in 2026 but did not confirm the new value to Becker’s.
Longevity Health, which offers institutional special needs plans, landed its third five-star contract with the recalculation. Its North Carolina and Illinois contracts already had five stars, while its New Jersey one got upgraded from four to five stars. While that does not translate to a different quality bonus payment, the company said the change “is a powerful validation of Longevity’s care model and our long-standing partnerships with skilled nursing facilities.”
The star rating is linked to rebates and bonuses that Longevity can “reinvest in expanded member benefits, clinical programs and care delivery.” CMS requires sufficient data for star ratings, and Longevity was previously ineligible.
Despite the boost, the insurer does not foresee a major shift with its near-term enrollment outlook, even though it said the five-star designation brings more awareness to the plan’s quality. Longevity remains focused on clinical outcomes, partnerships and performance across quality measures.
“We remain focused on executing against our existing growth plans while continuing to deliver high-quality care for our members and partners,” Longevity said.
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