What happened: Centene alleges CMS used 17 unlawful measures to calculate its 2027 Medicare Advantage Star Ratings, costing it $448 million
Who's involved: Centene Corporation and 35 subsidiaries versus HHS and CMS
What's at stake: Approximately $448 million in bonus payments and rebates across more than three dozen Medicare Advantage contracts
Why it matters: The same court already struck down similar measures for another insurer - and CMS voluntarily dropped them for that rival but kept them for everyone else
Where it stands: Complaint filed October 22, 2026; no court ruling yet
Seventeen quality measures. More than three dozen contracts. Nearly half a billion dollars. That is what Centene Corporation says the federal government's flawed rating system cost it - using rules a court had already struck down.
The managed care giant filed suit against the Department of Health and Human Services and the Centers for Medicare & Medicaid Services on October 22 in the US District Court for the Southern District of Georgia. The complaint alleges CMS relied on 17 measures it had no legal authority to use when it scored Centene's 2027 Medicare Advantage Star Ratings - the performance grades that determine how much the government pays health plans each year.
Star Ratings are not just report cards. Under Medicare Advantage, plans scoring four stars or higher unlock bonus payments from CMS and get to keep a larger share of the savings they generate - funds that flow into better benefits, lower premiums, and care programs for members. Plans that fall short get less money, which means fewer benefits and a harder time competing for enrollees.
The complaint puts Centene's loss at approximately $448 million in bonus payments and rebates it says it would have earned if CMS had scored its plans without the 17 disputed measures. The filing walks through the contracts one by one - covering states from Georgia to California, Iowa to New York - and alleges that nearly every one would have received a higher rating.
Two contracts face an even sharper problem. Plans that score below three stars get flagged with a public warning on CMS's Medicare Plan Finder - a label that drives away enrollees and brokers alike. Three consecutive years with that flag gives CMS the power to cancel the contract entirely. The complaint alleges both contracts would have cleared the three-star threshold without the disputed measures.
The heart of Centene's case is that none of this is new. In May 2026, the same court ruled in Clover Insurance Co. v. HHS that 20 measures CMS used to score Clover's 2026 Star Ratings were unlawful. The court found CMS had either used data from sources Congress never authorised for ratings purposes, or adopted the measures without going through the public rulemaking process that lets the industry weigh in before rules take effect.
The court ordered CMS to redo Clover's ratings without those measures. CMS complied. Then it went further: when it published the 2027 ratings on October 8, it voluntarily dropped the same measures from Clover's scores - even though the court order only covered the 2026 cycle.
The complaint frames that move as a concession. If CMS dropped the measures for Clover voluntarily, the filing argues, it has effectively admitted they are unlawful. Yet it applied the same types of measures to every other health plan in the country, including Centene.
The complaint asks the court to throw out Centene's 2027 Star Ratings across all the affected contracts, order CMS to recalculate them without the 17 disputed measures, remove the warning labels from the two flagged contracts, and let Centene revise its 2028 bids to reflect the corrected scores.
The filing also points to competitive harm. Star Ratings are publicly visible on CMS's Medicare Plan Finder, and the complaint says depressed scores place Centene at a disadvantage when patients, brokers, and employers choose plans. Because ratings are relative, the filing argues, rival health plans may be artificially propped up by the same measures that dragged Centene's scores down.
The allegations have not been tested, and no court has ruled on the merits.
