Jefferson Health insurers sue CMS over Medicare Advantage star ratings, alleging $43m in lost 2028 rebates

Thomas Jefferson University and three of its Medicare Advantage insurers say their 2027 star ratings are half a star too low and will cost them about $43m in rebate money in 2028. The university, Health Partners Plans, Partners Insurance Company and Partners Insurance Company of New Jersey filed the complaint on 4 November in the federal district court in Washington, DC, Insurance Business reported.

The money depends on the rebate rules: plans rated below 3.5 stars keep 50% of their rebates, while plans rated from 3.5 to below 4.5 stars keep 65%. The plaintiffs say two of their contracts would rate 3.5 stars instead of 3.0, and a third 3.0 instead of 2.5, if CMS had left three medication-adherence measures, for diabetes, hypertension and cholesterol drugs, out of the 2027 ratings it published on 8 October. They say the rebates pay for extra benefits and lower premiums for more than 31,000 members in Pennsylvania and New Jersey.

Their case is that the measures were already void. In May 2026 a federal court in Georgia found 20 measures in Clover Insurance Company's 2026 rating unlawful. The complaint alleges that CMS then dropped the voided measures from Clover's 2027 rating but kept them for every other plan.

The plaintiffs ask the court to set aside the three contracts' 2027 ratings, order a recalculation without the measures, adjust 2028 rebates and let them revise bids already submitted. The allegations have not been tested and no court has ruled on them.