The Clover Lawsuit and Its Implications on Medicare Advantage Stars

Stars isn’t going anywhere. It’s simply too central to value-based care. But between the Star Year 2029 reset and this ruling, the people running Stars now have two sources of uncertainty to plan through at once.

A federal judge in Georgia has handed Clover Health a win in its challenge to the program’s 2026 Star Ratings. The ruling ostensibly appears to have knocked out as many as 20 measures. The order only directs CMS to recalculate Clover’s own ratings (which drive 2027 payments), but the reasoning is hard to contain to one plan. CMS already asked the court to reconsider; the judge declined.

Let’s establish a critical point at the start – Stars isn’t disappearing. The program is too important to value based care for that. But the decision injects real uncertainty into the program and into plan finances. For Stars executives, the practical reality is that a program you were already rebuilding around the SY 2029 reset just gained a second, independent variable, and you have to plan through both at once. Below is what the decision actually changes and how to think about it.

Why This Happened 

What it means for you: Your plan doesn’t need to litigate this but you do need to know the ruling stems from a structural shift in how courts read CMS’s authority, which opens the door up to more challenges.

Clover didn’t argue that a measure was scored unfairly. It argued CMS never had the authority to include certain measures at all and that some were adopted without the formal rulemaking the law requires. That argument only works in a post-Chevron world: with the Supreme Court’s Loper decision having ended automatic deference to agencies, courts now read Medicare statutes literally rather than trusting CMS’s interpretation. The judge agreed on both fronts, finding that the quality program is largely confined to HEDIS, HOS, and CAHPS, and that Stars changes belong in rulemaking; not in Advance Notices and Technical Notes.

The practical signal: the door is open for similar challenges, and CMS may be pushed toward slower, formal rulemaking for anything it wants to count.

What’s Actually at Risk

What it means for you: If the ruling holds, and that is a very big if, Stars shrinks to a near-pure HEDIS program. That would mean specifically Part D and survey measurement all but disappear.

The SY 2029 reset was already taking the program from 45 measures down to 34. Layer this ruling on top and the count could fall to no more than 19 — and plausibly as low as 16. Only five of the affected measures overlap with what CMS had already planned to sunset; the rest are new casualties. What would be left:

Read the table and the pattern is unmistakable:

• Stars becomes a HEDIS program. Clinical chart and claims-based measures carry almost all the weight.
• Part D measurement nearly vanishes. The two surviving drug measures lean on PDE data the same ruling calls out, so they may not last either.
• Surveys lose their teeth. CAHPS and HOS — the member-experience backbone — are reduced to a single measure each.
• Scoring machinery breaks. The CAI, Reward Factor, and Part D improvement logic all need rework, and improvement would apply to Part C only.

Who Wins and Who Loses?

What it means for you: It’s directional, not destiny — but a HEDIS-dominant program rewards clinical execution and punishes plans that leaned on operational and survey measures.

There are too many unknowns to call this precisely, so treat the following as directional. But if the Clover outcome displaced the current SY 2029 plan, a quick look at performance on mostly-HEDIS measures points one way:

The throughline: a program that lives or dies on HEDIS rewards plans with deep clinical-data discipline and disadvantages those whose ratings were propped up by operational or survey measures. If you don’t know which camp your contracts fall into, that’s the first thing to model.

What This Means for Your Stars Strategy

What it means for you: Plan for the scenarios, but don’t rebuild your program around a ruling that probably won’t survive appeal. The SY 2029 fundamentals are still your north star.

Running your ratings under three lenses — today’s rules, the scheduled SY 2029 program, and a Clover-driven contraction — is now table stakes; you need to know your exposure and protect revenue. But the strategic move is restraint, not overhaul. Here’s where to put the energy:

• Keep executing toward SY 2029. The reset’s direction — fewer measures, heavier clinical and outcomes weighting, tougher cut points — is the change you can actually count on. Don’t let the lawsuit pull focus from it.
• Treat the contraction as a sensitivity case, not a base case. Model what a HEDIS-dominant program does to your projected rating and bonus exposure, then revisit as appeals play out. Quantify it; don’t reorganize around it.
• Double down on the measures that survive every scenario. HEDIS clinical performance and year-over-year improvement matter under today’s rules, under SY 2029, and under a Clover world. That’s the safest place to invest right now.
• Don’t abandon drug, CAHPS, and HOS work. Expect drug measurement and full member surveys to return in some form — the gaps are too central to member experience for policymakers to leave open. Letting that muscle atrophy would be a mistake.
• Tighten the data-to-action loop. Whichever way the program lands, success increasingly depends on finding gaps early and intervening at scale, not on retrospective reporting.

Will the Ruling Hold?

What it means for you: Probably not in its current form — expect a stay and, eventually, a legislative or regulatory fix. But the path there could be bumpy for a year or more.

The merits aren’t crazy — the elements of Stars do trace back to statute, and the road map has been genuinely hard to follow. But the stakes make this ruling hard to leave standing:

• An appeal and likely stay. Given the policy and financial weight, the smart bet is that the decision gets paused at the appellate level, letting the program run as-is in the interim.
• Strong incentive to fix it. With more than half of Medicare enrollees now in MA, neither CMS nor Congress is likely to accept a stripped-down Stars program. Expect them to affirm most of the SY 2029 design — and possibly broaden CMS’s authority again, within limits.
• A messy interim if there’s no stay. Recalculating only Clover’s ratings would be untenable; other plans would sue. That risks a chaotic 2026 of restated SY 2026 ratings alongside SY 2027 announcements in October.

One thread worth watching: Humana’s pending challenge to its SY 2025 ratings hinges on the Call Center measures — which this ruling also tossed. The Clover logic could help it along.

Bottom Line

This decision doesn’t change what good Stars management looks like — it raises the cost of getting it wrong. The fundamentals haven’t moved:

• Stars isn’t going anywhere; stay the course on the SY 2029 reset, because that’s the change you can plan around.
• Carry the Clover contraction as a modeled scenario, not a redesign trigger.
• Invest where every scenario agrees — HEDIS performance, year-over-year improvement, and a faster data-to-intervention loop.

The plans that come through this well won’t be the ones that chase the headline. They’ll be the ones that keep operationalizing quality while everyone else waits to see how the appeal lands.

Court Order File: Clover Insurance Company v. HHS — Order on Motion for Summary Judgment

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Lilac’s Stars Management platform helps plans navigate these types of major changes to Stars.  We have the data models and analytics to easily understand the strategic implications of Stars program changes and agentic AI tools to make a plan’s member engagement in support of Stars more efficient and impactful.

 Reach out here to start a conversation with the Lilac team about how we can help your plan.