The Clover Ruling and the New Reality for Medicare Advantage Star Ratings
The Medicare Advantage (MA) Star Ratings program has long served as both a quality benchmark and a financial engine for health plans, although it has not been without its methodological and other challenges. That foundation was shaken in May 2026, when a federal court ruled in favor of Clover Health, finding that CMS improperly calculated its 2026 Star Rating. The decision, and CMS’s subsequent response, has introduced new uncertainty into how plans approach quality, risk, and revenue strategy.
What happened: a methodology challenge with industry-wide implications
Clover Health’s lawsuit centered on a drop in its largest PPO contract from 4.0 to 3.5 Stars, falling below the threshold for full quality bonus payments and materially reducing its bonus revenue opportunity. Clover argued that CMS used measures it was not authorized to include and failed to follow required rulemaking procedures.
The court agreed on both counts, determining that:
- CMS improperly incorporated 20 measures, including some based on data sources outside statutory authority.
- Certain measures were adopted without the legally required notice-and-comment rulemaking process.
As a result, the court ordered CMS to recalculate Clover’s rating, which ultimately increased to as high as 4.5 Stars for its primary contract. CMS then took the unusual step of recalculating ratings more broadly, though only applying changes if they improved a plan’s score and allowing affected plans to revise their bids.
Why it matters: financial stakes and strategic volatility
Star Ratings are not just a report card; they are directly tied to revenue. Plans that achieve 4 Stars or higher qualify for higher quality bonus payments, which can translate to billions of dollars across the industry. For Clover alone, the initial downgrade represented an estimated $120 million in lost payments. More broadly, the ruling introduces three key dynamics:
- Methodology risk is now real
The decision creates a legal pathway for other plans to challenge ratings, raising the possibility of ongoing disputes and recalculations. - Program stability is in question
Analysts warn the ruling may signal a more “volatile direction” for Star Ratings, particularly as CMS balances regulatory reform with legal constraints. - The definition of “quality” may narrow
The court emphasized statutory data sources (e.g., HEDIS, HOS, CAHPS), potentially limiting CMS’s flexibility to incorporate broader operational and experience measures.
In short, plans can no longer treat Star Ratings as a fixed target. Instead, they must navigate a moving framework where measurement, compliance, and financial outcomes are increasingly interconnected and contested.
What doesn’t change: the need for better data and earlier action
Even amid constant regulatory change, one reality remains: Star performance is ultimately driven by timely, accurate, and actionable data. The measures underpinning Stars, whether clinical quality, member experience, or adherence, depend on a plan’s ability to:
- Capture complete clinical data
- Identify care gaps early
- Engage providers and members proactively
This is where many organizations fall short. Retrospective, reactionary approaches alone, such as chasing gaps at year-end, are increasingly insufficient in a system that rewards continuous performance.
How Centauri can help
Centauri does not execute HEDIS or Star Ratings programs directly but instead addresses the upstream challenges that ultimately determine Star outcomes: fragmented data, delayed insights, and incomplete risk visibility.
Centauri’s approach centers on three capabilities:
- Interoperability as a foundation for quality
Centauri transforms fragmented clinical and member data into intelligent, coordinated actions, enabling a more complete and timelier picture of member health. Through alignment with national frameworks, this interoperability ensures that data is not only exchanged, but trusted, normalized, and actionable.
- Prospective risk and gap identification
By surfacing suspected conditions and care gaps before the point of care, Centauri enables providers to continuously address quality measures in real-time rather than retrospectively. This prospective lens is critical in a Star environment where timing directly affects performance.
- Integrated risk, quality, and care coordination workflows
Centauri’s platform connects risk adjustment, quality optimization, and care coordination, helping plans move from siloed programs to a unified, member-centric strategy that improves both outcomes and revenue.
The bottom line
The Clover ruling is a clear signal: the Star Ratings and quality landscape is evolving, and plans must be prepared for both regulatory disruption and heightened competition. While methodologies may change, the underlying drivers of performance, which are data liquidity, prospective insight, and coordinated action, remain constant. Plans that invest in these foundational capabilities will be best positioned to navigate uncertainty and sustain high performance, regardless of how Stars are ultimately calculated. That is where Centauri delivers value: ensuring the data and workflows that power Star success are built on interoperability, driven by prospective insight, and unified across risk, quality, and care coordination.
Dawn Carter, MHA, CPC, CRC, CPMA, CDEO, CPCO, AAPC Fellow
Sr. Director, Health Policy and Regulatory Affairs
Centauri Health Solutions, Inc.