Elevance Health Faces CMS Star Rating Dispute in New Georgia Lawsuit Amid Risk Adjustment Compliance Progress

Elevance Health (NYSE: ELV) is heading into a legal battle with the Centers for Medicare & Medicaid Services (CMS), challenging the methodology used to calculate Medicare Advantage star ratings after submitting compliance attestations. This dispute emerged through a lawsuit filed in Georgia last week, marking a significant development in the company’s regulatory engagements.

Lawsuit Challenges CMS Rating Methodology

In a lawsuit filed in the U.S. District Court for the Southern District of Georgia, Elevance Health alleges that CMS’s refusal to recalculate 2026 star ratings for five Medicare Advantage contracts violates the Administrative Procedure Act. Elevance contends that CMS must apply the same methodology used in a prior ruling involving Clover Insurance and reassess the 20 disputed measures accordingly. The case was updated publicly last week.

CMS Compliance Filing Preempts Sanctions

Earlier this summer, on May 28, Elevance submitted a formal attestation to CMS, confirming that it had completed initial submissions in all required systems, including the Risk Adjustment Processing System (RAPS), the Encounter Data Processing System (EDPS), and the Risk Adjustment Overpayment Reporting (RAOR) module. The filing also included documentation of overpayment remittance and auditable estimates for each case. As a result, CMS decided not to impose intermediate sanctions at that time.

Background of Compliance Concerns

This legal move follows earlier regulatory warning shots from CMS. In February, CMS notified Elevance of an intended suspension of enrollment into their Medicare Advantage–Prescription Drug plans due to concerns over contract administration and persistent noncompliance in risk adjustment data submissions.

Implications for Elevated Stakeholder Scrutiny

The dispute carries material significance for investors and policy watchers alike. Medicare Advantage star ratings directly impact plan reimbursement rates and consumer perceptions. If Elevance prevails and CMS recalculates ratings under the methodology formerly applied to Clover, the outcome could enhance the company’s competitive positioning. Conversely, victory for CMS would reinforce its discretion over data methodology and regulatory enforcement.

Stock Movement and Institutional Activity

Separately, recent weeks have seen notable institutional buying in Elevance shares. According to MarketBeat filings, firms such as Mitsubishi UFJ Asset Management (with investments approaching $206 million), Northwestern Mutual Wealth Management, and Pzena Investment Management have acquired significant holdings in Elevance between August 18 and 23.

The current share price, as of August 26, 2026, stands at $402.54—a 0.89% change from the prior close. Investors may be weighing both the legal developments and growing institutional interest when assessing the outlook for the stock.

What’s Next

Moving forward, the key developments to monitor include judicial rulings in the Georgia litigation and any additional CMS responses or adjustments to star rating methodology. These outcomes could significantly influence Elevance Health’s Medicare Advantage operations, financial outlook, and market perception.