Jefferson Health Plans sued feds over drop in its Medicare Advantage star ratings for 2027
The drop in star ratings for its Medicare Advantage plans will reduce the payments it receives from the Centers of Medicare and Medicaid Services by $43 million, Jefferson said in its lawsuit.
Jefferson Health Plans, the insurance arm of Thomas Jefferson University, has joined at least nine other Medicare Advantage insurers suing federal regulators over a drop in star ratings for 2027.
Jefferson’s lawsuit, filed last Wednesday in U.S. District Court for the District of Columbia, said the lower ratings would reduce by $43 million the quality bonuses it would otherwise receive in 2028.
“The harm suffered is not only financial, but reputational and competitive,” Jefferson’s complaint said. The ratings are widely used in market to attract shoppers for the private versions of taxpayer-funded insurance for people 65 and older.
“This case is not about quality of care or a challenge to the Medicare Star Ratings program itself,” Jefferson said in an email Monday.
“It is about ensuring fair and equitable treatment so that local, community-focused health plans are not placed at a competitive disadvantage that undermines our ability to reinvest in affordable coverage, enhanced benefits, and high-quality care for the members and communities we serve.”
CMS declined to comment, citing the pending litigation.
Jefferson owns the region’s largest health system, but the Philadelphia nonprofit is a small player in Medicare Advantage with just 31,500 people enrolled in its plans in eastern Pennsylvania and South Jersey, according to its lawsuit.
CVS Health Corp., which owns Aetna and has a large Medicare Advantage presence in the Philadelphia region, said in its separately filed ratings lawsuit that the decline in star ratings for 2027 would cost it more than $2 billion in 2028.
A spate of Medicare Advantage lawsuits
Insurers began suing the Centers for Medicare and Medicaid Services (CMS) on Oct. 9, the day after the agency released its 2027 star ratings. The ratings are designed to give people choosing a Medicare Advantage plan a way to compare quality."
The lawsuits by Jefferson and other insurers, as tracked by the O’Neill Institute for National and Global Health Law at Georgetown University Law Center, have based their claims on a federal district court ruling in Georgia this year that CMS used 20 improper measures to calculate insurer Clover Health’s 2025 star ratings.
Jefferson is challenging the use of three of the measures related to medication adherence that were found unlawful in the Clover case. Jefferson says some of the measures relied on data that are not authorized by law, and others required a more rigorous adoption process.
The ratings for two of Jefferson’s plans fell to 3 stars from 3.5 stars. A third plan fell to 2.5 from 3 stars.
CMS has since appealed the Clover ruling.
