The lawsuit isn’t a surprise, after Alignment told investors it would take all available actions to improve its quality scores.

Alignment’s lawsuit is unsurprising. The insurer, which covers roughly 240,000 members in five states, threatened to sue after the percentage of its members in plans rated at least 4 stars fell from 98% in 2026 to 25% in 2027.

The drop is set to cost Alignment more than $200 million in payments in 2028, the year affected by the stars, according to Friday’s complaint.

Alignment’s lawsuit could precede more suits from insurers upset with their quality scores, which run from 1 to 5 stars and impact bonuses and competitive advantages in the privatized Medicare program. The CMS has recalculated ratings for at least one insurer in each of the past three years, after insurers have cinched victories in the courts arguing that the agency is playing fast and loose with stars calculations.

Most recently, a Georgia court this spring took issue with 20 of the CMS’ star ratings measures, ruling that 10 fell outside the agency’s statutory authority to adopt and 10 were procedurally invalid because they weren’t implemented through regulation.

In June, the CMS recalculated 2026 star ratings for MA insurers without the first 10 measures, but didn’t withdraw the second 10 for any insurer except Clover Health, the plaintiff in the suit. That decision opened regulators up to legal challenges, and was quickly followed by lawsuits from Alignment and two other health plans looking to improve their scores.

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