Humana Inc., has filed a lawsuit against CMS in response to a recent cut in crucial Medicare quality ratings. The lawsuit is an attempt to reverse the decision which has already hurt its stock value and threatens a loss of billions of dollars in incoming revenue. The company claims that Medicare acted in an 'arbitrary and capricious' manner in calculating its metrics on the health plans offered by Humana. Star ratings play a crucial role in determining bonus payments worth billions of dollars. The latest downgrade spells bad news for the 2026 earnings targets that Humana has set, and one analyst called it a 'worst-case scenario' for the Louisville, Kentucky-based insurer.
