UnitedHealthcare is latest to sue Medicare over Star Ratings

UnitedHealthcare (NYSE:UNH) has become the latest to legally challenge the Medicare Advantage Star Ratings system, which allows health insurers to receive bonus payments from the government.

The lawsuit filed by a group of UnitedHealth (UNH) subsidiaries in a Texas district court on Monday alleged that the Centers for Medicare & Medicaid Services (CMS) unfairly downgraded the insurer’s Star Ratings.

According to Bloomberg News, which first reported the lawsuits, the UNH units accused CMS of downgrading the company’s Star Ratings based on an “arbitrary and capricious assessment” of one phone call that lasted less than 10 minutes.

The plaintiffs seek a court order to get the CMS to issue revised ratings before Oct. 15, when the open enrollment period for MA plans is set to begin.

Early this summer, the CMS was forced to recalculate Star Ratings for 2024 after losing lawsuits filed by Scan Health Plan and Elevance (ELV) over the system’s accuracy.

On Thursday, Humana (HUM) said it is appealing specific preliminary Star Ratings data after witnessing a sharp reduction in members enrolled in its top-rated MA plans for 2025.

“Humana believes there may be potential errors in CMS’ calculation of certain of its results and industry threshold cut points,” the company said. CMS is expected to finalize Star Ratings for next year on Oct. 10.