Centene Corporation has sued the federal government over what it calls flawed and illegal Star Ratings for its Medicare Advantage plans, arguing the mistake could cost the insurer $448 million in revenue next year. The lawsuit, filed against the Department of Health and Human Services and the Centers for Medicare & Medicaid Services, accuses regulators of unlawfully relying on 17 quality measures when grading Centene's senior health plans for 2027.
As the St. Louis Post-Dispatch reports, Centene wants a court to throw out the Star Ratings released for its Medicare Advantage plans earlier this month. The complaint alleges CMS had no legal authority to use those 17 measures, and according to Insurance Business, the company puts its loss at approximately $448 million in bonus payments and rebates. Centene Medicare Advantage plans cover about 910,000 members nationwide, per the Post-Dispatch's reporting, and the company is reportedly the largest of three insurers that have sued over this year's ratings.
CMS assigns health plans a one-to-five-star scale meant to reflect quality, and the ratings are promoted alongside each plan's offerings on the Medicare Plan Finder website — details that matter now because open enrollment began October 15 and runs through December 7, the window when seniors compare plans and pick coverage for next year. Plans rated four stars or higher receive bonus payments for the insurer, which is why Star Ratings carry such outsized financial weight. Centene's plans reportedly received mostly 3-star or 3.5-star ratings this cycle, with only three plans reaching four stars.
What Centene Wants Fixed
According to the Post-Dispatch, Centene wants the court to review agency quality measures covering flu shots, blood pressure control, customer service, and whether patients take prescriptions as directed. The company argues the government incorrectly built the methodology behind its five-star rating system, and that such rating systems usually must go through a formal regulatory process. Centene alleges CMS instead released its scoring methodology in a technical document rather than through standard rulemaking — the same argument Alignment Healthcare has made in its own challenge, saying the agency's stars methodology is illegal because it wasn't promulgated through the rulemaking process, according to Healthcare Dive.
Per the Post-Dispatch, Centene says that if the court rules in its favor, scores for 34 plans would climb and 18 plans would record ratings of four stars or higher. Insurance Business reports that Centene's complaint alleges two specific contracts would have cleared the three-star threshold entirely without the disputed measures. The company is asking the court to invalidate the affected 2027 Star Ratings, order CMS to recalculate them without the 17 measures, strip warning labels from two contracts, and allow Centene to submit revised bids for 2028.
A Legal Fight Already Underway Elsewhere
Centene's complaint, filed in Georgia's Southern District, arrives five months after a federal judge in that same jurisdiction ruled in May for a smaller insurer making a similar argument, the Post-Dispatch notes. In that case, the court set aside Clover Insurance Company's 2026 Star Rating after finding 20 of the measures used to calculate it unlawful or invalid, and ordered CMS to recalculate it, according to the U.S. District Court for the Southern District of Georgia's opinion. CMS has since appealed that ruling to the 11th U.S. Circuit Court of Appeals, where it remains pending.
Centene isn't the only large insurer pressing the issue. Elevance Health and affiliated insurers filed their own complaint against HHS and CMS in the same Georgia court in July, arguing CMS gave Clover preferential treatment by recalculating its rating while denying the same relief to Elevance, according to the Georgetown University Law Center Litigation Tracker. Elevance has argued that recalculating five affected contracts under the same treatment Clover received would boost its 2027 Quality Bonus Payment by approximately $115 million. SCAN Health Plan filed a separate suit in the District of Columbia, and Alignment Healthcare has reported that the share of its members in plans rated at least four stars collapsed from 98% in 2026 to just 25% in 2027, per Healthcare Dive.
Not Centene's First Trip to Court Over Ratings
This isn't new territory for Centene. The Post-Dispatch reports the company challenged the government over its 2025 plan ratings two years earlier using a similar argument, and that case produced results: CMS recalculated ratings and raised grades for seven Centene plans. In December 2024, then-chief executive Sarah London told investors the recalculations would yield an additional $200 million in Star-Rating bonus payments for Centene, according to the Post-Dispatch. The parties dropped that earlier case two months after the recalculation.
CMS has recalculated Medicare Advantage ratings for at least one insurer in each of the past three years, according to Healthcare Dive, and the stakes are substantial industry-wide: the Medicare Payment Advisory Commission estimates that payments tied to star ratings will total about $16 billion in 2026, per Fierce Healthcare. Humana has its own ratings lawsuit pending against the federal government, filed in October 2024 after the company blamed a sharp score decline on three test calls, Fierce Healthcare reports.
Centene is scheduled to report earnings Tuesday and lost $6.67 billion last year, almost all of it tied to a one-time write-down of the value of past acquisitions, according to the Post-Dispatch. Neither Centene nor the federal government responded to requests for comment, the paper reported. As Insurance Business notes, the allegations in Centene's lawsuit have not been tested, and no court has ruled on the merits.
