A federal court ruling out of Georgia has upended the way CMS calculates Star Ratings, and the fallout is arriving at the same time CMS is separately rewriting what the ratings measure altogether. For compliance and quality teams, that means two sources of instability are compounding each other in the same bid cycle, not two isolated developments to track separately.
What the court decided
In May, a federal judge in Georgia ruled that CMS improperly used 20 measures in calculating a 2026 Star Rating and ordered the rating to be recalculated. The ruling was significant because it challenged CMS’s authority to use the disputed measures.
Why one ruling became a growing docket
CMS’s response created the real complication. Rather than applying the court’s full reasoning industry-wide, CMS voluntarily recalculated the affected 2026 Star Rating, which feeds into 2027 Quality Bonus Payments. But when it recalculated ratings for other Medicare Advantage organizations that same month, it retained roughly half of the originally invalidated measures.
The result: the same rating year, 2026, now effectively exists in multiple versions depending on which organization and which recalculation method applies. There’s the rating originally issued, CMS’s own partial recalculation, and the fuller version the court ordered for the organization that actually sued.
That inconsistency didn’t resolve the dispute, it just gave everyone else a reason to file one of their own. Other Medicare Advantage organizations have since challenged how CMS treated their own 2026 Star Ratings and the resulting 2027 Quality Bonus Payments, arguing CMS cannot legally justify treating similarly situated plans differently based only on who happened to sue first. CMS appealed the original ruling to the Eleventh Circuit in late July, and the newer suits are proceeding in parallel.
Then, this month, the pattern repeated. In the draft cutpoints released ahead of the 2027 Star Ratings, CMS reverted to the same underlying methodology a court had already found unlawful, rather than the corrected version it used for the recalculation. Industry analysts tracking the program are now warning openly that this could trigger another wave of litigation, calling it one of the more volatile stretches the ratings program has seen.
That’s not speculation about what might happen next. It’s the same cycle showing up again in real time: a methodology gets challenged, gets partially corrected for one dispute, and then resurfaces unchanged for the next one, with no indication of which version is actually going to hold.
The part that reaches beyond any single organization’s bottom line
The sharpest consequence of this litigation isn’t the legal mechanics. It’s that a Star Rating no longer reliably tells a beneficiary what it’s supposed to. Two Medicare Advantage organizations competing for the same beneficiaries in the same county can now carry meaningfully different Star Ratings, not because one delivers better care than the other, but because one sued over its measure calculation and the other didn’t, or sued later, or in a different court. A Medicare beneficiary comparing plans during enrollment has no way to know what’s driving the difference in front of them.
That concern reaches well past compliance teams. The underlying quality bonus program has become too consequential to tolerate this much methodological instability, particularly when the gap between adjacent star levels can turn on a fraction of a percentage point in a raw score, a difference with no meaningful quality signal behind it. Litigation can correct a specific unlawful decision, but it cannot substitute for a program designed to be stable and transparent from the outset.
Why this matters beyond compliance optics
The stakes are substantial because Star Ratings affect Quality Bonus Payments, which add billions of dollars to Medicare Advantage payments each year. Active litigation, a partial and contested recalculation, and a separate measure-set change are now layered on top of a program already spending at that scale. As a result, the ratings that determine who receives that money are drawing more scrutiny from regulators and researchers than in prior years.
For 2028, CMS is separately removing 11 measures from the Star Ratings measure set, changing which measures will contribute to future ratings. The change means plans will need to interpret future performance against a different measure set, independent of how the litigation is resolved.
Removing measures also isn’t a neutral simplification. The measures that remain now carry proportionally more weight than they did before, so small shifts in performance on the surviving measures move a rating further than they used to. An organization previously buffered by strong performance on a since-removed measure loses that buffer, regardless of whether anything about its actual care quality changed.
None of this resolves on its own terms. The court fight determines whether one set of measures was ever lawful to use. The measure-set change determines which measures apply going forward, starting with the 2028 ratings. Neither one settles the other, which means this rating cycle, and the next, are being shaped by two separate, unresolved processes at the same time, with no guarantee they land in a way that makes sense together.
