Payers

Humana loses 2nd legal challenge to Medicare Advantage star ratings

By Paige Minemyer Oct 14, 2025 12:44pm
Medicare Advantage Humana Centers for Medicare & Medicaid Services (CMS) CMS Star Ratings

Humana has lost a second lawsuit aiming to challenge the star ratings in Medicare Advantage (MA).

The insurer, which has the bulk of its insurance business in MA, initially lost a legal fight contesting its scores in mid-July, with a Texas judge arguing that the company had not yet exhausted the administrative appeals process before suing. Humana filed a second lawsuit later in the month, which was rejected by the Texas courts on Tuesday.

Humana charges that the Centers for Medicare & Medicaid Services (CMS) deemed three test phone calls as poor, which led to a significant drop in their scores. Star ratings scores are critical in determining quality bonus payments made to Medicare Advantage insurers.

In the ruling, Judge Reed O'Connor determined that the feds' determinations on those calls were not "arbitrary and capricious" and that a no-callbacks policy did not violate federal law.

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"The agency’s determination is in accordance with its guidelines and is not arbitrary or capricious," O'Connor said.

Shares in Humana were down by about 3.5% as of midafternoon on Tuesday. An analysis from Capstone notes that the loss means Humana will likely lose out on a $3 billion windfall from its scores increasing for plan year 2025.

Humana said in a statement to Fierce Healthcare that it "will consider all available legal options to ensure the Star Ratings calculated by CMS are accurate, consistent and representative of plan quality."

"We are disappointed with the Court’s ruling but remain committed to delivering meaningful improvements to our Star measurements and returning to top quartile performance as quickly as possible," a Humana spokesperson said. "Millions of Americans choose Medicare Advantage because of its high-quality, affordable care. They deserve to have the quality of that care evaluated with consistency and integrity."
 
Capstone said in its analysis Tuesday that it had previously believed Humana would win this legal challenge and that an appeal is unlikely given that O'Connor ruled against the insurer for all three calls that were in question.

Payers have had mixed success in challenging the star ratings, with Humana's two legal fights as notable losses. However, industry leader UnitedHealthcare did win a lawsuit that led to its scores being recalculated, as did Alignment Healthcare.

Florida Blue, meanwhile, did not see success in challenging the feds over the star ratings.

Medicare Advantage Humana Centers for Medicare & Medicaid Services (CMS) CMS Star Ratings Lawsuits Reed O'Connor Finance Regulatory Payers