Alignment Healthcare sues over 2027 Medicare Advantage star ratings

Alignment Healthcare is suing the Centers for Medicare and Medicaid Services over the insurer’s 2027 Medicare Advantage star ratings.

The California-based insurer covers about 240,000 members in five states, and the ratings measure plan quality on a scale of one to five stars.

The share of Alignment members in plans rated at least four stars fell from 98% to 25% between the 2026 and 2027 ratings.

Alignment says the drop could cost it more than $200 million in 2028 payments.

The company argues that CMS used rating measures that should have been adopted through formal rulemaking, and that the agency’s approach violates the law.

Star ratings affect insurers’ bonuses and competitive position in Medicare Advantage, the privately run part of Medicare.

Alignment wants a court to cancel its 2027 ratings and require a recalculation before the selling season for 2028 plans.