CVS Health and Aetna sue CMS over 2027 Star Ratings

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Oct 27, 2026 · @Jeffrey A Newman PC Dba jeff newman Law

CVS Health and more than 30 Aetna and affiliated subsidiaries sued the Department of Health and Human Services and the Centers for Medicare & Medicaid Services (CMS) on October 26, 2026, in federal court in the Southern District of Georgia. The complaint asks the court to vacate the 2027 Medicare Advantage Star Ratings for 43 CVS Health contracts and order CMS to recalculate them without 28 quality measures the company says were adopted unlawfully.

CVS Health alleges that, had CMS left those measures out, it would receive more than $2 billion in additional 2028 Quality Bonus Payments and rebate retention. The case was filed one day before this report; the government’s response is not yet due.

The case at a glance

ItemDetail
CaptionCVS Health Corp. et al. v. U.S. Dep’t of Health & Human Services et al.
DocketNo. 2:26-cv-00115-LGW-BWC (S.D. Ga.), filed Oct. 26, 2026
JudgeLisa G. Wood, per the civil cover sheet, which lists three related cases: 2:25-cv-142 (Clover), 2:26-cv-61 (Elevance) and 2:26-cv-113
ClaimsAdministrative Procedure Act, 5 U.S.C. §§ 706(2)(A), (C) and (D)
Contracts at issue43 Medicare Advantage and Part D contracts covering about 7.03 million beneficiaries
Published 2027 ratings2.5 to 4.5 stars; CVS Health’s enterprise weighted average is 4 stars
Counsel for plaintiffsBalch & Bingham LLP (Atlanta and Augusta); Crowell & Moring LLP (Washington and Chicago; pro hac vice applications forthcoming)

The complaint bases venue on 28 U.S.C. § 1391(e), citing roughly 23,000 plan members who live in the district.

What CVS Health argues

The complaint rests on the same court’s May 27, 2026 decision in Clover Insurance Co. v. HHS, which held that 20 measures used in Clover’s 2026 ratings were unlawful. CVS Health says it raises “identical legal arguments” and that CMS used the same measures again in the 2027 ratings, with one exception that CMS had already planned to drop.

Count I: no notice-and-comment rulemaking. All 28 challenged measures, the complaint alleges, were “established or materially changed” without the rulemaking required by 42 U.S.C. § 1395hh(a)(2) and CMS’s own regulations at 42 C.F.R. §§ 422.164 and 423.184. It argues the measures set a “substantive legal standard” governing payment because they determine bonus eligibility, citing Azar v. Allina Health Services, 587 U.S. 566 (2019).

Count II: data outside the statute. Twelve of the measures, CVS Health says, rely on data not “collected under” 42 U.S.C. § 1395w-22(e), the source Congress specified in § 1395w-23(o)(4)(A). The complaint traces that limit to the 2003 Medicare Modernization Act and to CMS’s 2004 statement that it would use HEDIS, the Health Outcomes Survey and CAHPS.

Unequal treatment. The complaint alleges CMS voluntarily excluded the equivalent measures when calculating Clover’s 2027 ratings, though the court’s order covered only 2026. It alleges no other plan received that treatment. CVS Health characterizes this as an implicit concession by CMS. A related ruling bears on this point. In Elevance’s 2026 case, the same judge found on August 27, 2026, at the preliminary-injunction stage, that CMS had a rational basis for treating Clover differently: Clover held a court judgment and other plans did not. CVS Health’s version of the argument concerns the 2027 ratings, which the Clover judgment did not cover.

Criticisms of specific measures. Beyond the legal claims, the complaint argues several measures do not reliably reflect plan quality. It cites MedPAC reports from June 2025 and June 2026 criticizing the MA quality system.

  • Disenrollment (C28, D03): said to reflect premiums, competitor marketing, brokers and relocation.
  • Access (C21, C22): said to reflect local physician supply rather than plan conduct.
  • Member ratings (C25, C26, D05): said to capture general impressions shaped by health status and expectations.
  • Health Outcomes Survey measures: said to rest on small, years-old, self-reported samples.
  • Medication adherence (D08–D10): said to measure whether fills appear in Part D claims, missing cash, VA and other fills.
  • Quality improvement (C29, D04): said to double-count other measures while carrying a 5x weight.

The complaint does not challenge every measure Clover struck. By our count, its 28 measures overlap with Clover‘s 20 on 13 and add 15 others; seven Clover measures are not included.

What CVS Health asks the court to do

The company seeks declarations that the 28 measures were unlawfully applied, vacatur of the 2027 ratings for the listed contracts, and a remand directing CMS to recalculate them without those measures. It also asks the court to:

  • direct CMS to set 2028 bonus payments and rebates from the recalculated ratings;
  • declare its enterprise weighted average 4.5 stars rather than 4, which would apply to three contracts treated as new; and
  • let the plaintiffs revise previously submitted bids.

Exhibit A projects that every contract would rise by 0.5 to 1.5 stars. The complaint attributes the largest single loss, $361,068,250, to contract H3959. The complaint pleads that no administrative appeal is available for these claims.

How similar cases have fared

Plans have both won and lost star-ratings challenges, and the cases raise different theories, so one outcome does not predict another. The record so far:

PlaintiffRatings yearCourtIssueOutcome
SCAN, Elevance2024D.D.C.CMS departed from its own regulationPlans prevailed; CMS recalculated 2024 ratings for all plans, raising 40 and paying about $1.3 billion more in bonuses (Reed Smith)
UnitedHealth2025E.D. Tex.Scoring of a customer-service test callPlan won in November 2024; CMS filed, then withdrew, an appeal in January 2025 (Fierce Healthcare)
Humana2025N.D. Tex.Cut points; customer-service callsDismissed July 18, 2025 for failure to exhaust; after refiling, the court upheld CMS’s evaluation (Healthcare Dive, Reuters)
HMO Louisiana2025D.D.C.; D.C. Cir.Ratings for a consolidated contractCMS won; D.C. Circuit affirmed June 26, 2026 (opinion)
Clover2026S.D. Ga.Statutory authority; notice and commentPlan won May 27, 2026 on 20 measures; CMS appealed to the Eleventh Circuit
Elevance, SCAN, Alignment2026Elevance: S.D. Ga.; SCAN, Alignment: D.D.C.Same treatment as CloverPending. In Elevance (No. 2:26-cv-61), the court on Aug. 27, 2026 denied a preliminary injunction and CMS’s motion to dismiss; it found Elevance likely to succeed on its Clover-based claims but not on its claim of unequal treatment (order)
Alignment, Healthfirst, Centene2027Alignment: D.D.C. (Oct. 9); Healthfirst: S.D.N.Y. (Oct. 19); Centene: S.D. Ga. (Oct. 22)Clover-style measure challengesPending; Centene claims about $448 million and Healthfirst more than $380 million

CVS Health’s appears to be the fourth reported suit over the 2027 ratings; its claimed loss is larger than any of the other three.

What comes next

Much depends on the government’s appeal in Clover (11th Cir. No. 26-12553). According to the complaint, argument is tentatively set for mid-January and CMS has asked for a decision by spring 2027. Bids for 2028 are due June 7, 2027.

As summarized by consultant Marc Ryan, the government argues on appeal that venue was improper, that bonuses are not “payment for services,” that “based on” certain data does not mean “based exclusively on” it, and that the remedy was inequitable because it removed only measures on which the plan scored poorly. If that last argument succeeds, it could matter here: CVS Health’s list omits some Clover measures, such as Customer Service and Rating of Health Care Quality.

Venue here rests on about 23,000 members in the district, roughly 0.3% of the 7.03 million covered (computed from the complaint). The court rejected the government’s venue objections in both Clover and Elevance; in Elevance, about 3.3% of the key contract’s members lived in the district.

Why it matters to whistleblowers and compliance staff

This is a dispute between an insurer and its regulator over rating rules. It alleges no wrongdoing by anyone. Still, the complaint is a detailed public account of how star data turns into money, and several of its statements are relevant to people who handle that data.

  • Dollars per star. The complaint explains that contracts below 3.5 stars keep 50% of their rebate, those at 3.5 to 4 keep 65%, and those at 4.5 or more keep 70%. Contracts at 4 stars or above also earn a bonus. It says a half-star “can translate into billions of dollars.”
  • Payment significance. CVS Health pleads that the measures govern “the payment for services.” Under Universal Health Services v. Escobar (2016), whether a requirement matters to payment is a central question in False Claims Act cases.
  • Where the data comes from. The complaint says adherence scores depend on whether prescription fills are captured in Part D claims. It also says a handful of survey respondents can swing a contract’s score. Both point to the data pathways that determine ratings.
  • Broker steering. The complaint says brokers may deprioritize plans rated below 4 stars. Separately, a False Claims Act suit in which the Justice Department intervened, alleging broker kickbacks by Aetna, Elevance and Humana, largely survived a motion to dismiss in Massachusetts federal court on March 25, 2026; eHealth has denied the allegations and CVS has said it will defend itself vigorously (Becker’s).

Medicare Advantage data accuracy is already an enforcement focus in a related area. In March 2026, Aetna agreed to pay $117.7 million to resolve False Claims Act allegations about Medicare Advantage diagnosis codes, without admitting liability; a former coding auditor who brought part of the case received about $2 million (DOJ). That matter concerned risk adjustment, not star ratings.

Sources

Jeff Newman Law is a national whistleblower law firm. jeffnewmanlaw.com 617-823-3217