Medicare Star Ratings 

The star ratings for Medicare Advantage (MA) plans, issued annually by the Centers for Medicare & Medicaid Services (CMS), wield immense influence over the healthcare industry. These scores, ranging from one to five stars, evaluate a plan’s performance based on dozens of metrics, encompassing quality, access, and customer satisfaction. Released each October for the following year, the ratings significantly affect the competitiveness of MA plans, shaping how appealing they are to seniors while also determining reimbursement rates and eligibility for lucrative performance bonuses. 

In the 2025 star ratings, CMS introduced tighter thresholds for achieving higher scores, triggering a backlash from major insurers. Several industry giants, including UnitedHealthcare, Humana, and Centene, have initiated lawsuits, arguing that the new scoring methodologies and evaluations were unfair. At the heart of these disputes is the review of customer support call centers, with UnitedHealthcare’s recent legal victory marking a significant moment in the broader debate. 

The Role of Star Ratings in Medicare Advantage 

Medicare Advantage plans operate under a highly competitive model, with star ratings functioning as a critical benchmark. These ratings not only influence how seniors select plans but also play a substantial role in determining federal reimbursements. Plans with four or more stars earn higher reimbursements and qualify for bonuses that can be reinvested into benefits, such as reduced premiums or expanded coverage options. 

Given the financial stakes, star ratings are a focal point for insurers. A single metric’s influence can ripple across a plan’s overall rating, impacting its profitability and marketability. For 2025, CMS adjusted the criteria for several measures, making it harder for plans to achieve top scores. This heightened difficulty sparked industry-wide discontent, as insurers scrambled to meet the new expectations. 

UnitedHealthcare’s Legal Victory: A Case Study 

Among the lawsuits, UnitedHealthcare’s case stands out for its focus on CMS’s assessment of customer support call centers. According to CMS guidelines, to earn a five-star rating for call center performance, centers must meet stringent criteria, including connecting callers to an interpreter for non-English speakers within eight minutes. 

UnitedHealthcare’s lawsuit arose from a “secret shopper” test call conducted by CMS. The test involved a caller speaking French who contacted UnitedHealthcare’s call center. While the call center connected the shopper to an interpreter within the required timeframe, the caller did not pose an introductory question mandated by CMS guidelines for assessment. Despite this, CMS deemed the call unsuccessful and awarded UnitedHealthcare’s plans a four-star rating for this measure, consequently lowering their overall star ratings. 

UnitedHealthcare argued that CMS’s decision violated the Administrative Procedure Act by being arbitrary and capricious. Moreover, the lawsuit contended that CMS unlawfully delegated the evaluation of test calls to a private contractor, a task that should have remained under the agency’s purview. 

Judge Jeremy Kernodle of the U.S. District Court for the Eastern District of Texas sided largely with UnitedHealthcare. He ruled that CMS had failed to adhere to its own assessment guidelines and that delegating decision-making authority to a private contractor was unlawful without congressional authorization. 

This ruling has significant implications, as it establishes that CMS must follow its own guidelines rigorously and cannot offload critical regulatory tasks to external entities without proper oversight. 

The Implications for the MA Sector 

UnitedHealthcare’s victory, though relatively small in financial terms—projected to drive an additional $10 million in earnings—carries broader implications for the MA sector. The decision underscores the potential for other insurers to challenge CMS’s methodologies, particularly concerning call center metrics. 

For insurers like Humana and Centene, who have filed similar lawsuits, the ruling offers a glimmer of hope. If CMS’s reliance on private contractors is deemed inappropriate in their cases, these insurers could also secure favorable outcomes. This could prompt a reevaluation of how call center performance is factored into star ratings, potentially reducing the metric’s influence in future assessments. 

Moreover, the decision raises questions about the balance of power between CMS and its contractors. Delegating tasks to third parties is common in federal agencies to manage large-scale programs. However, this ruling emphasizes the need for strict oversight and adherence to established guidelines, particularly when decisions can have significant financial and reputational consequences for stakeholders. 

Elevance and Other Legal Challenges 

The legal challenges to the 2025 star ratings are not limited to UnitedHealthcare. Elevance (formerly Anthem) and Blue Cross Blue Shield of Louisiana have also sued CMS, although their cases focus on different issues. Elevance, for instance, contested the invalidation of a call due to a technological glitch, arguing that the decision unfairly impacted its ratings. 

While Judge Kernodle rejected UnitedHealthcare’s argument that CMS applied inconsistent standards across plans, the broader industry sentiment remains one of frustration. Many insurers believe that the increased thresholds and stringent evaluations in the 2025 ratings disproportionately penalize plans for minor infractions or uncontrollable circumstances, such as technological errors or test calls. 

These lawsuits collectively highlight the tension between CMS’s efforts to maintain rigorous standards and the insurers’ demand for fair and transparent evaluations. 

Changes to Call Center Metrics 

In response to the mounting criticism, CMS has already moved to reduce the weight of call center performance in calculating overall star ratings. This adjustment may help mitigate some of the industry’s concerns, but it also reflects a broader recognition of the challenges associated with assessing customer support. 

Call center metrics are inherently complex, involving subjective assessments and varying caller experiences. For insurers, even small discrepancies in performance can significantly impact ratings, leading to disputes over the validity of evaluations. CMS’s decision to downplay the importance of these metrics signals a shift toward a more balanced approach, although it remains to be seen how this will affect future ratings. 

Star Ratings in the Future 

The ongoing legal battles over the 2025 star ratings underscore the high stakes involved in Medicare Advantage. For insurers, the ratings are not just a measure of quality but a critical determinant of their competitive position and financial viability. 

As the MA market continues to grow, with more seniors enrolling in private plans, the pressure on CMS to refine its evaluation methodologies will only increase. Insurers are likely to push for greater transparency, consistency, and fairness in the star rating process, particularly as new metrics and thresholds are introduced. 

For CMS, the challenge lies in balancing rigorous oversight with practical considerations. Ensuring that ratings accurately reflect plan performance without unfairly penalizing insurers requires a nuanced approach, particularly when relying on external contractors or subjective measures. 

UnitedHealthcare’s victory and the broader legal challenges could pave the way for meaningful reforms in the star rating system. Whether through changes in how metrics are weighted or stricter guidelines for evaluations, the goal should be to create a system that is both fair and effective, ultimately benefiting Medicare beneficiaries. 

In the meantime, insurers will continue to navigate the complexities of the star rating system, leveraging every opportunity to challenge unfavorable decisions and secure higher scores. For seniors, the ratings remain a critical tool for selecting plans, underscoring the need for a transparent and equitable process that prioritizes their needs above all.