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CMS is appealing its court loss that led to boosts in Clover Health’s 2026 Medicare Advantage star ratings, escalating the case to a higher federal court.
Where the CMS Clover Star Ratings Appeal Is Headed
The case will now move to the U.S. Court of Appeals for the Eleventh Circuit, according to a July 21 court filing. This appeal follows a legal battle that began when the insurer sued CMS in November, opposing measures it said contributed to its largest MA contract’s 3.5-star designation.
What Was at Stake
The complaint said the rating put roughly $120 million in payments at stake. Plans typically have to secure a 4-star rating to land quality bonus payments. The 2026 ratings from the fall will affect 2027 bonus payments, making the outcome of this dispute financially significant for the company.
The Court Ruling Behind the Appeal
In May, U.S. District Judge Lisa Godbey Wood ruled partially in the plan’s favor, determining CMS improperly included 20 measures in the calculation. CMS had to recalculate the contract’s rating, elevating it from 3.5 to 4.5 stars, a substantial jump that underscores how significantly the disputed measures affected its original score.
A Ruling That Rippled Across the Industry
In the weeks that followed, CMS voluntarily issued updated ratings to other insurers as well. That move has since spurred more legal battles, with Elevance Health suing CMS in July over differences between Clover’s and the other plans’ recalculations. Shortly after, SCAN Health Plan and Alignment Health filed lawsuits of their own, arguing CMS’s fix did not go far enough. Each is seeking a bump from 4 to 4.5 stars.
Timing of the Appeal
The appeal came the same day CMS announced plans to release the revised ratings. Ratings remained the same for 61%, increased for 9%, and decreased for 30% of contracts. Overall ratings will only update if a contract saw a boost, with updates coming through “on or about July 22, 2026,” according to a letter from CMS to Medicare Advantage organizations.
A Broader Pattern of Star Ratings Litigation
In January, CareFirst BlueCross BlueShield also sued CMS over how the 2026 ratings were calculated. Other insurers, including UnitedHealthcare, Humana, Centene, Louisiana Blue, Florida Blue and BCBS Massachusetts, have all brought their own star ratings cases in recent years and have been met with mixed outcomes.
How This Appeal Fits Historical Precedent
Like this recent case, victories for Elevance and SCAN resulted in broader recalculations in 2024, suggesting a recurring pattern in which individual insurer lawsuits can trigger industry-wide ratings adjustments once a court rules against CMS’s methodology.
CMS and the Insurer’s Response to the Appeal
A CMS spokesperson told Becker’s the agency does not comment on litigation. Becker’s has contacted Clover for comment and will update this story if more information becomes available.
What This Means for Medicare Advantage Star Ratings Going Forward
With this appeal now headed to the Eleventh Circuit, the outcome could have significant implications not just for Clover’s own bonus payments, but for how CMS calculates and defends its star ratings methodology against future challenges from other insurers. Given the growing list of lawsuits from Elevance, SCAN, Alignment, CareFirst, and others, the resolution of this appeal may set an important precedent for how much judicial scrutiny CMS’s ratings calculations can withstand going forward.
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