Why 3 Medicare Advantage insurers sued over star ratings

The prolonged drama over the Medicare Advantage Star Ratings program is again playing out in the courts.

UnitedHealth Group, Humana and Centene — so far — have each sued the federal government over quality scores for the 2025 plan year, which spelled bad news for the health insurance companies that sell Medicare Advantage plans. Americans for Beneficiary Choice, which represents insurance marketers, also is a plaintiff in the Humana case. Meanwhile, Elevance Health has asked the Centers for Medicare and Medicaid Services to reconsider its star ratings.

Related: Humana, UnitedHealthcare, Aetna fall in new star ratings

Elevance Health and Scan Health Plan won lawsuits challenging their star ratings for 2024, but these new complaints are different. In the previous cases, the plaintiffs successfully argued on technical grounds that CMS did not follow lawful administrative procedures when modifying how star ratings are calculated.

This time, UnitedHealth Group, Humana and Centene are zeroing in on a very specific issue: Did CMS rate their call center operations too poorly?

Under the Star Ratings program, CMS assesses quality using 40 measures of patient outcomes, member experience and plan administration. Insurers that receive at least four out of five stars qualify for significant bonus payments, but CMS has instituted changes that made high scores more difficult to achieve.

What do UnitedHealth, Humana and Centene say?

While not identical, the three lawsuits share a theme. According to the complaints, CMS "secret shoppers" testing their customer service lines did not give insurers a fair chance to serve them.

CMS employs secret shoppers to call Medicare Advantage plans and request foreign language translators or support for the hearing impaired. To receive a perfect score, an insurer must connect callers who don't speak English to representatives fluent in their languages and able to answer questions within eight minutes. Beneficiaries who are deaf or hard of hearing must be able to submit questions via text-to-voice utilities and get responses within seven minutes.

UnitedHealth Group alleges that CMS improperly dinged its star rating after a secret shopper was not connected to a French-speaking representative. But the caller was on the line for about eight minutes, was never placed on hold and did not ask the questions that would trigger additional assistance, according to the complaint filed in the U.S. District Court for the Eastern District of Texas. The company wants that call excluded from its metrics.

UnitedHealth Group stands to lose out on $1.4 billion in bonus payments because of lower star ratings, the investment bank TD Cowen estimated.

Humana and Americans for Beneficiary Choice argue that CMS must remove two calls from its calculations because the secret shoppers got disconnected during internet service disruptions. The complaint in the U.S. District Court for the Northern District of Texas case says Humana's practice is to call customers back when that happens, but insurers are not permitted to contact secret shoppers. Humana also wants CMS to disregard a third call because the secret shopper failed to speak to the representative.

These plaintiffs further contend that CMS should have disclosed the industrywide data it uses to develop the star ratings formula and that it incorrectly calculated the numerical benchmarks associated with top scores.

Centene alleges CMS penalized its quality score by including a call that failed because of a software problem on the secret shopper's end. The caller used a text-to-voice tool to contact the company but never got through to Centene, the company asserts in its lawsuit before the U.S. District Court for the Eastern District of Missouri. The company wants CMS to exclude that incident from its analysis.

The lower rating cost Centene $73 million in bonus payments, according to the insurer.

Elevance Health and Scan Health Plan also objected to the results of secret shopper calls in the cases they won on different grounds. Separate from its lawsuit, Elevance Health got CMS to reconsider its call center score and recouped $190 million in bonus payments. The agency subsequently recalculated 2024 star ratings for all Medicare Advantage plans.

What do the Medicare Advantage insurers want?

UnitedHealth Group, Humana and Centene all seek the same outcome: New star ratings that don't include demerits from those secret shopper calls. The companies each have other separate but related asks for the courts.

UnitedHealth Group seeks a declaratory judgment that CMS’ decision to include the disputed call in its 2025 star ratings was illegal.

Humana — which suffered the worst quality downgrades among large insurers — wants the court to declare the rule against calling back secret shoppers is unlawful and order CMS to hand over the data is uses to devise the star ratings formula.

Centene seeks a declaratory judgment that CMS broke the law by including the failed call in its evaluation.

What does CMS say?

CMS and the Health and Human Services Department declined to comment on ongoing litigation.