A federal judge in Texas on August 19, 2025, rejected Elevance Health's lawsuit challenging the U.S. government's calculation for the health insurer's star ratings for some of its Medicare plans. Elevance Health had argued that improper rounding in the Centers for Medicare and Medicaid Services' (CMS) methodology cost it at least $375 million.
This ruling means the company will not recover the disputed funds, representing a direct financial setback. The decision confirms the government's methodology for determining Medicare Advantage Star ratings, which directly impact bonus payments and rebates received by insurers.
The company's percentage of members in plans rated four stars or higher is expected to decline for payment year 2026 due to significantly higher cut points. This outcome will negatively affect future revenue and profitability in a key business segment for Elevance Health.
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