What the Clover Insurance decision means for 2027 QBP determinations

On June 17, 2026, the Centers for Medicare and Medicaid Services (CMS) announced that it would update its 2027 quality bonus payment (QBP) determinations for certain MA contracts following the Clover Insurance decision.

QBPs are a key component of the Medicare Advantage (MA) program, tying a plan’s Star Ratings performance to important financial levers such as benchmarks, rebates, and ultimately benefit design strategy. Even small rating changes can influence how plans price bids, structure supplemental benefits, and plan for the next contract year. As of this ruling, MA plans could collectively see an estimated $428 million according to external reporting when CMS recalculates quality scores.

Below is a summary of the decision, the immediate operational considerations for affected plans, and best practices for navigating the uncertainty while staying focused on long-term Stars performance.

What is the update to 2027 QBP determinations?

CMS has issued an update to its 2027 QBP determinations following a recent court decision in Clover Insurance Company v. Department of Health & Human Services. Clover Insurance sued in November 2025, seeking about $120 million in lost bonuses after its PPO plan rating fell from 4 to 3.5 stars. The court ruled in favor of Clover on certain claims, concluding among other things that CMS relied on measures not based on authorized MA data and deeming aspects of the calculation “procedurally invalid” for bypassing required notice-and-comment rulemaking. The agency is now voluntarily recalculating 2027 QBP ratings for certain Medicare Advantage contracts using a narrower set of Part C measures, including HEDIS, CAHPS, and HOS data, while excluding all Part D measures and several administrative or operational Part C measures.

Importantly, CMS will only apply a recalculated rating when it increases a contract’s previously assigned QBP rating, which, based on current CMS guidance would result in recalculated ratings being applied only where they increase a contract’s QBP rating. For affected MA organizations, the update may create a narrow but time-sensitive opportunity to resubmit Contract Year 2027 bids if the higher recalculated QBP rating changes the contract’s benchmark or rebate amount.

Plans were expected to notify CMS by June 22, 2026, whether they intend to resubmit or opt out, with bid resubmissions due by June 29 and actuarial certification due by July 1. While the immediate operational impact is limited to contracts receiving a higher QBP rating, the memo reinforces the need for plans to closely monitor Star Ratings-related litigation, CMS implementation decisions, and downstream implications for bid strategy, rebates, formularies, and benefit design.

Why the Clover Insurance decision matters for Star Ratings

The Clover Insurance case is a meaningful challenge to the Star Ratings program framework, especially when it comes to CMS’s ability to introduce and manage measures outside of formal rulemaking. For example, CMS recalculated QBPs for Clover Insurance, but it’s still unknown which measures were included or excluded in that recalculation and why. As of now, it’s not known how MY25/SY27 Star Ratings will be affected, and more information will be necessary to assess how to proceed. It could change further, as well, depending on how the case progresses through appeals and how CMS chooses to respond. 

In the meantime, plans shouldn’t necessarily change course, but they should take a closer look at areas of vulnerability while staying focused on executing within the current Stars framework.

Best practices for plans in light of the QBP update

For now, health plans should treat the QBP update as a signal for more comprehensive planning, not necessarily as a reason to make reactive changes. This time would be used most effectively to assess exposure, align internal teams, and stay prepared for potential CMS follow-up. For informational purposes only, health plans may consider the following practices in response to the QBP update:

1. Stay the course. Rather than make premature or reactive changes, health plans should maintain current plans. At present, the ruling applies to just one plan and one Star Ratings year, so it is wise to wait and see whether and how the decision will evolve. Plans should instead focus on internal alignment: make sure Stars, actuarial, and compliance teams are operating from the same understanding, while delaying any big shifts until there’s better regulatory clarity.
2. Evaluate your exposure. This is a good time to model how removing certain measures could impact your Star Ratings, revenue, and bid strategy. While action isn’t yet required, doing so will help plans better understand where they could be most affected.
3. Double down on core measures. Many of the measures challenged in this case were already slated for removal in MY27/SY29 under CMS’s Final Rule guidance to refocus the program on clinical care, outcomes, and patient experience. Keep prioritizing the clinically grounded measures (HEDIS, CAHPS, HOS) that are most likely to remain central to the program. Circling back to prior advice from the Final Rule: though the program may shift, plans may be better positioned if they embed excellence into everyday practices.
4. Stay attuned to what’s coming next. The timeline and ultimate outcome are still unclear, so it’s important to track developments closely. Stay plugged into industry signals and upcoming CMS changes, and be ready to adapt when there’s enough clarity to act with confidence.

Going forward, Star strategies will continue to focus on improving outcomes, closing care gaps, and enhancing member experience, but plans may need to place greater emphasis on navigating regulatory and methodological uncertainty. If the Clover ruling stands, more changes could be in store for how Star Ratings are structured, making it increasingly important for plans to anticipate CMS direction alongside current performance. Plans best positioned to adapt and to succeed will be those that integrate quality improvement with strong analytics, forecasting, and policy insight.