The Clover lawsuit saga just doesn’t want to die
OK — I lied. I seemed to imply last time that I was done writing about the Clover decision. But this is number 6 – six blogs since the Clover Health lawsuit decision. Tiring yet? Me too! But I will not promise this is the end of my blogging on this subject as this thing appears to have a life of its own. Who knows what new lawsuit will be filed or what happens next. It is truly mystifying!
I still have incoming questions on what all this means and how to sort out this seminal decision over the next few years. So here are the latest updates.
Measure set scenario tracker
To try to sort all these suits out in my head, I put together a measure set scenario tracker that I think encompasses all the possibilities for SY 2026, 2027, and 2028. But I admit more could pop up. I also assume that new measures coming on line and those being removed pass regulatory muster. They may not given the Clover’ judge’s ruling. I also am assuming that regulatory fixes for the Clover decision cannot be done for SY 2026, 2027, and 2028. I supposes 2028 could be fixed, but we are now in July and the prospect of that is remote. But I do think that the Centers for Medicare and Medicaid Services (CMS) and Congress will fix all this between now and sometime in early 2027. I think that the CMS restructure is the most likely scenario to exist as of SY 2029. But I admit, all this shocked me and there is no certainty here. For those of you interested in seeing the measure set scenario tracker, direct message me on LinkedIn with an email or email me at healthcarelabyrinth.com through the Contact Page.
An update on the new Scan and Alignment lawsuits
After the ruling in its lawsuit, Clover received an exact calculation based on the judge’s ruling throwing out 20 measures based on two legal arguments (10 measures were not statutorily allowed and another 10 measures were not properly promulgated via regulation). However, CMS’ recalculation measure set adopted part of the ruling by throwing out some of the judge’s measures, while retaining others. As well, CMS removed some measures not even struck by the court.
Elevance Health was the first to sue post the Clover decision, arguing it is entitled to a calculation based exactly on what the judge ruled for Clover on the 20 measures. Well, now there are two new ones. The first is from non-profit and high performer Scan Health Plan, run by one of the most brilliant and innovative healthcare leaders, Dr. Sachin Jain, M.D. Scan argues that CMS inappropriately recalculated Star Rating for 2026 after the Clover Health decision. Scan’s suit appears different. Scan argues the court should force CMS to remove the ten measures that CMS failed to promulgate by regulation. That meant two of Scan’s contracts received 4s instead of 4.5s, costing the plan $125M in 2027.
Now, high-performing MA plan Alignment Healthcare has joined the lawsuit fray on the Clover decision. Alignment has the same argument as Scan — that CMS erred by the struck measures. Alignment says three of its contracts currently rated 4.0 should be at 4.5, netting an additional $50 million.
Neither Scan nor Alignment appear to want any of the measures removed by CMS restored. Thus, both Scan’s and Alignment’s argument is much like what I said in a recent blog was a “Clover Strict” reading of the judge’s ruling — not the “Clover Specific” measure ruling. Therefore, as I wrote (and is underscored in the Scan lawsuit), we have at least four potential ratings scenarios before us:
— “Original Measure Ratings” (45)
— “Clover Specific” ruling directing a recalculation based on the measures Clover sued on (25)
— “Clover Strict” reading of the lawsuit striking all but HEDIS, CAHPS and HOS along with those that failed notice and promulgation provisions (17)
— “CMS Recalculation” that was implemented by the agency for all contracts but Clover’s main one (27)
While the 25 and 27 counts look close, the actual measures are very different — just 17 measures are common between Clover Specific and CMS Recalculation.
In its suit, Scan goes in depth on how the Clover judge was right to say anything published outside the actual regulation (e.g., Technical Notes and Announcements) does not pass regulatory muster. I think Scan has a point here. While I am sympathetic to CMS trying to have some flexibility by issuing regulations and then messaging when something will actually come into force via other avenues (e.g., annual announcements and technical notes), it is a harrowing experience trying to keep track of the complex Stars Road Map between so many guidance documents – draft rules, final rules, advance notices, final announcements, star measure technical notes, and display notes. The multiplicity of forums led in part to the Tukey controversy.
What are these two interpretations of the Clover decision creating new suits?
Some folks have messaged me after my last blog and LinkedIn posts and asked me a technical legal question regarding what I mean by the “Clover Judge’s decision specific to Clover” (I relabeled that as “Clover Specific” above) and the “Clover Judge’s literal ruling” (I relabeled that as “Clover Strict” above). Caution: I am not a lawyer so please take all this with a grain of salt. I will say I have been around statutory and regulatory interpretation for decades. As management secretary and state budget director for years, I wrote enough legislation to truly mess up good parts of the Connecticut general statutes. In many ways, I think that is what happened with the Stars program and the Clover decision – a great deal of assumption about what the federal statutes say about the Star program and even more assumptions about what can be done through regulation.
So, with these caveats, it is on that basis I am rendering this informal assessment.
The judge’s opinion in Clover has to be read in two ways: Clover asked for relief and specifically took issue with the inclusion of 20 measures – again, 10 because the were not allowed in statute and 10 because they did not go through the appropriate regulatory notice process. What Clover asked for, and the judge awarded, was to direct CMS to recalculate Clover’s largest contract taking into consideration the deficiencies related to these 20 measures. CMS followed that direction in recalculating Clover’s one contract. It awarded the new rating for the contract based on the 45 original measures minus the 20 deficient measures. That is what I mean by the “Clover Specific” interpretation.
But buried in the ruling is what I call the “Clover Strict” interpretation. The judge finds that: “In sum, to comply with the statutory guardrails set by 42 U.S.C. § 1395w-22(e)(3)(B)(i), CMS’s systems must remain unchanged from those which were utilized as of November 1, 2003 (HEDIS, HOS, and CAHPS), the overarching categories of questions within those systems must stay the same, but the exact survey questions asked from year to year can change within these confines.” So, while Clover challenged just the 20 measures, the judge clearly spells out the fact that Star measurement statutorily is limited to HEDIS, CAHPS, and HOS measures. Considering this and taking out any Clover challenged measures in these categories, this results in just 17 measures, assuming Part C Improvement can stay (which may be deficient as well for a few reasons, but that is unclear). Said another way, this is like the CMS Interpretation without the challenged CAHPS and HOS measures as the agency removed all operational and Part D measures in its recalculations.
In summary, Elevance is asking for the “Clover Specific” scenario, Scan apparently the “Clover Strict” scenario. And then of course, CMS is giving the “better of” the “Original SY 2026” scenario or the “CMS Recalculation” scenario. Thus, we have at least four scenarios in play for SY 2026 and beyond.
The documentation
Here are the Clover decision and new lawsuits. Thanks to my alma mater, Georgetown University, for its great litigation tracker – my “go to” for explanations and the court filings/documents.
The Clover Health decision: https://litigationtracker.law.georgetown.edu/wp-content/uploads/2026/01/Clover-Insurance-Company-v.-Department-of-Health-and-Human-Services-et-al_2026.05.27_ORDER-ON-MOTION-FOR-SUMMARY-JUDGMENT.pdf
The Elevance Health lawsuit: https://litigationtracker.law.georgetown.edu/wp-content/uploads/2026/07/Elevance_2026.07.01_COMPLAINT.pdf
The Scan lawsuit: https://litigationtracker.law.georgetown.edu/wp-content/uploads/2026/07/SCAN-Health-Plan-v.-HHS_2026.07.08_COMPLAINT.pdf
The Alignment lawsuit: https://lnkd.in/entBMgHn
#cms #stars #medicareadvantage #quality
— Marc S. Ryan
