Centene Challenges Medicare Advantage Rating Methodology
Insurers may see a recalculation of 2027 star ratings if the lawsuit forces CMS to discard unauthorized scoring measures.
Updated on Oct. 23, 2026 in Healthcare
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Centene Corporation has filed a federal lawsuit against the Department of Health and Human Services and CMS, challenging the methodology used to calculate 2027 Medicare Advantage Star Ratings. The insurer alleges that 17 unauthorized quality measures cost the company $448 million in potential bonuses and rebates.
Why it matters
Star Ratings are a critical operational metric that dictate bonus payments and dictate whether a plan can avoid federal quality warnings. The dispute highlights continued legal friction regarding the agency's authority to implement scoring changes without standard rulemaking processes.
The lawsuit targets 17 specific quality measures used by CMS for the 2027 cycle, which Centene claims resulted in a $448 million loss across more than three dozen contracts. Two of these contracts fell below the three-star threshold that triggers public plan warnings.
The players
Centene Corporation
A major managed care organization providing government-sponsored healthcare programs to millions of members.
Centers for Medicare & Medicaid Services
The federal agency responsible for administering the Medicare program and setting quality scoring standards.
Clover Insurance Co.
A Medicare Advantage insurer that previously secured a legal win regarding the agency's rating methodologies.
The details
Centene alleges that the agency utilized data sources not authorized by Congress and adopted new scoring measures while bypassing established public rulemaking processes. This challenge follows a May 2026 court ruling that similarly invalidated CMS measures used to score Clover Insurance Co. In that instance, the agency was forced to remove the disputed metrics from the provider's 2027 ratings.
Timeline
May 2026: A federal court ruled that CMS utilized unauthorized measures to score Clover Insurance Co.
October 8, 2026: CMS published the 2027 Medicare Advantage Star Ratings.
October 22, 2026: Centene filed its complaint in the US District Court for the Southern District of Georgia.
Market Landscape
Centene is leveraging the legal precedent established in the May 2026 court ruling against CMS to challenge the agency's scoring framework. The action suggests an intensifying industry-wide pushback against the agency's discretion in applying quality metrics to managed care contracts.
Operators in the Medicare Advantage space should monitor this litigation, as it could force a broad recalculation of quality ratings for the 2027 cycle. Firms with contracts currently rated near the three-star threshold should prepare for potential volatility in their bonus and rebate revenue projections.
The takeaway
The case underscores the significant financial stakes tied to the agency's rulemaking process for quality scoring. Operators should closely review their current Star Rating measures and cross-reference them against formal CMS rulemaking dockets to identify potential areas of administrative vulnerability.
What happens next
Centene intends to petition the agency for permission to revise its 2028 Medicare Advantage bids to account for potentially corrected star ratings.
Further reading
For more on industry regulatory trends, see our Healthcare section.
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