Elevance Health Inc. has sued the U.S. Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS), alleging the agencies unlawfully applied different standards to Medicare Advantage insurers when calculating 2026 Star Ratings. The insurer argues CMS recalculated a competitor's ratings following a court ruling but refused to extend the same treatment to Elevance, costing the company an estimated $115 million in 2027 quality bonus payments.

In a complaint filed last week, Elevance contends CMS violated a core administrative law principle requiring similarly situated parties to receive the same treatment. The dispute centers on the Medicare Advantage Star Ratings program, which scores contracts on a five-star scale using quality, compliance, and performance measures. Those ratings influence consumer enrollment decisions and determine whether Medicare Advantage organizations qualify for Quality Bonus Payments and higher rebate retention.

Elevance Challenges CMS's Star Ratings Decision

According to the complaint, the financial incentives tied to Star Ratings help insurers enhance member benefits, lower premiums, and fund quality improvement initiatives. Elevance's lawsuit points to a recent federal court decision involving Clover Health Investments, in which the court found 20 measures used in CMS's 2026 Star Ratings methodology unlawful. The complaint states the court determined that 10 measures relied on data sources not authorized under the Medicare Act, while another 10 should have been adopted through notice-and-comment rulemaking but were not.

Elevance alleges CMS subsequently recalculated Clover's 2026 Star Rating by excluding those measures, a step that Clover disclosed in a June 10 SEC filing. The company argues the same 20 measures also affected its own 2026 Star Ratings. Had CMS applied the same methodology used for Clover, Elevance estimates its 2027 Quality Bonus Payments would have increased by approximately $115 million.

Company Seeks Matching Relief

Beyond the financial impact, the complaint argues that Star Ratings directly affect Medicare beneficiaries because CMS publishes them through its My Plan Finder tool, influencing enrollment decisions and insurers' competitive positions. Elevance contends there is no material distinction between its contracts and Clover's that would justify different treatment. It argues that CMS cannot consider the methodology unlawful for one Medicare Advantage organization while treating it as valid for others.

Before filing suit, Elevance said it asked CMS leadership to recalculate its 2026 Star Ratings using the same approach applied to Clover. After CMS denied that request, the company filed suit seeking an order requiring the agency to recalculate its ratings by excluding the same 20 measures identified in the Clover decision.

Elevance Health today announced advancements in its Health OS platform, a secure data system designed to streamline clinical review and create a simpler, faster, and more connected experience for care providers and members. The platform connects health information across electronic health records (EHRs), labs, and health information exchanges to support more informed and timely clinical decisions while reducing administrative burden. By integrating with healthcare data systems, including Epic’s Payer Platform, Health OS helps reduce manual steps and deliver clearer clinical insights.

Health OS represents a shift from fragmented, manual processes to a connected, intelligent ecosystem, said Ashok Chennuru, Chief Data and Digital Transformation Officer at Elevance Health. The system enables faster decisions and reduces administrative work by applying advanced analytics and embedding data-driven insights directly into workflows between care providers, payers, and other partners. Elevance Health was the first to collaborate with Epic in leveraging the Epic Payer Platform for inpatient concurrent reviews, which historically relied on manual documentation submissions leading to delays.

Early results from health systems using Health OS-enabled workflows demonstrate meaningful improvements in efficiency and accuracy. A key outcome includes a 61% reduction in prior authorization denials due to insufficient clinical information. Additionally, nearly 60% fewer cases were designated pending because of the need for additional information. The platform also drove up to a 51% reduction in follow-up reviews, including appeals and peer-to-peer discussions, by ensuring more complete information upfront. Care providers reported saving approximately 15 minutes of administrative time per case, along with a more transparent and efficient process.

Impact on Prior Authorization

Health OS is transforming prior authorization for medical services by integrating it into provider workflows and allowing secure information sharing between providers and the health plan. This approach significantly reduces reliance on phone, fax, and paper submissions while improving speed and consistency. More than 30 health systems are actively participating in Elevance Health’s program for electronic prior authorization for medical services.

Results from this participation highlight the platform's impact. In 2026 through the end of April, more than 250,000 prior authorization requests for medical services were processed. Of these, more than 42% of decisions were completed in one minute or less. For providers, this translates to reduced administrative burden and a more intuitive experience that aligns with existing workflows. For members, it means faster access to approved treatments and a more predictable care journey.

"Much of the waste and complexity in healthcare could be reduced by simply making the right information available to the right stakeholders," said Alan Hutchison, Vice President at Epic. He noted that Epic’s Payer Platform has enabled meaningful reductions in administrative burden with measurable reductions in denials, peer-to-peer reviews, and appeals, resulting in less work for providers and faster access to care for patients. Elevance Health remains focused on expanding its capabilities to advance a future where utilization management is faster, simpler, and more aligned with patient care.