The news: A federal judge in Texas ordered the Centers for Medicare and Medicaid Services (CMS) to recalculate UnitedHealthcare’s Medicare Advantage (MA) star ratings for 2025.

For context, MA star ratings are based on quality of care and customer service and help consumers compare plan options. MA plans with 4 or 5 stars also receive bonus payments from the federal government, which contracts with private insurers to run MA plans as an alternative option to traditional Medicare.

How we got here: Just last month, multiple UnitedHealthcare MA plans sued CMS for downgrading their stars based on an “arbitrary and capricious assessment” of a single phone call placed to their joint customer support center.

• Affected plans earned a score of 4 stars instead of 5 on the call center metric as a result, reducing their overall ratings.
• Now, the CMS needs to immediately rerun and republish the star ratings without including the phone call in question.

Why it matters: Recalculated ratings could bolster UnitedHealthcare’s MA earnings by millions of dollars. More broadly, the judge’s ruling could be a good omen for MA insurers like Humana and Centene, which have both filed lawsuits seeking to boost their star ratings.

Our take: The MA space is hyper-competitive and insurers offering these plans will do whatever it takes to stand out to new enrollees—including suing the CMS to recalculate their ratings. Their desire to differentiate themselves and attract MA plan signups in the process can be tied to the tremendous financial windfall at stake.

• The average Medicare beneficiary has 43 MA plans to choose from, per KFF.
• UnitedHealthcare, which enrolls 29% of all MA members, is expected to receive $3.4 billion in bonus payments this year alone, according to KFF.

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