UnitedHealth Sues CMS Over Medicare Advantage Star Ratings

Dive Brief:

• A group of UnitedHealth subsidiaries sued the Biden administration on Monday, arguing regulators unfairly dinged their Medicare Advantage quality or “star” ratings over one customer support phone call.
• The complaint filed in a Texas district court by UnitedHealth MA plans in a variety of states accused the CMS of downgrading their stars based on an “arbitrary,” “capricious” and “unlawful” assessment of how a joint call center handled a single call that lasted less than 10 minutes. The plans allege they could lose millions of dollars if customers depart due to the lower scores.
• The lawsuit asks the court to force the CMS to correct the ratings before open enrollment for MA begins later this month.

Dive Insight:

MA payers are increasingly taking to the courts with the hopes of revising unfavorable star ratings.

UnitedHealth’s lawsuit follows two successful suits filed by Elevance and Scan Health Plan earlier this year, after CMS’ tweaks to star ratings calculations caused the insurers’ scores to fall.

UnitedHealth’s suit is especially similar to Elevance’s, given both focus on customer service calls.

Regulators calculate star ratings based on a variety of factors, including preventative care, member experience, health outcomes and customer service.

In the customer service bucket, each MA plan must be able to provide specific information to seniors upon request, including through a call center. Such centers are held to certain standards, which the CMS evaluates through anonymous test calls.

In order to receive five stars on the call center measure, centers must provide an interpreter within eight minutes of request for all incoming calls.

The lawsuit filed by the plans, which share a call center operated by UnitedHealth, takes issue with a test call placed in French that regulators marked as unsatisfactory.

UnitedHealth claims the call center connected the test call from the CMS as required within eight minutes. It also said the caller never asked an introductory question required by the assessment, and as such the call center employee did not provide the required response.

“At no point did the CMS test caller ask the required introductory question,” the lawsuit reads. “Accordingly, there was no evidence on the record supporting the conclusion that the call should be counted against the Plaintiffs.”

UnitedHealth appealed to the CMS to invalidate the call. Regulators did not invalidate it, scoring the affected plans four instead of five stars on the rating and “improperly [subjecting] the United plans to a different standard than those of the insurer Elevance,” the lawsuit alleges.

Star ratings run from one to five stars and are meant to serve as a measure of plan quality, though Medicare watchdogs say it’s an imperfect system. Still, seniors use the ratings to compare plans when selecting Medicare coverage during the fall for the following year, so lower ratings could deter them from selecting a particular plan.

The ratings also have a more direct impact on the financial success of a plan. Plans with higher ratings receive generous bonuses from the federal government, and are allowed to bid against a higher benchmark, giving them a competitive advantage against peers in their markets.

Courts have generally sided with insurers that say CMS has unfairly prevented them from attaining their rightful quality scores.

Following successful court rulings in the suits brought by Elevance and Scan, the CMS recalculated star ratings early this summer. More than 60 MA plans from 40 insurers received a higher star rating as a result, according to a Healthcare Dive analysis — including some offered by UnitedHealth.

The CMS also released preliminary data on MA star ratings for 2025 earlier this month. Most large plans offered by national insurers appear to have held onto their stars, according to analysts, with one major exception: Humana.

On Wednesday, the company — the second-largest MA payer in the U.S. after UnitedHealth — disclosed that only 25% of its members would be in plans with at least four stars in 2025, down from 94% currently.

Humana could lose billions of dollars as a result of the downgrade. The insurer is appealing the ratings for three of the four affected plans to the CMS.

Humana’s appeal for one contract is related to its call center, management told sell-side investors during a Wednesday meeting, according to a note from Leerink Partners’ analyst Whit Mayo.

UnitedHealth’s lawsuit was first reported by Bloomberg.