regulatory
confidence high
sentiment negative
materiality 0.72
Alignment's California HMO H3815 falls to 3.5 stars for 2027, hitting ~75% of membership
Alignment Healthcare, Inc.
- CMS released 2027 Star Ratings on Oct 8, 2026; Alignment expects its California HMO contract H3815 to fall to a 3.5-Star Rating from 4.0 for rating year 2026.
- H3815 serves roughly 75% of the company's health plan membership; six other eligible plans are expected to keep 4.0 stars or better, including three at 4.5 stars.
- Decline driven mainly by higher industry cut points and lower triple-weighted HOS and Part D measures; CMS retroactively eliminated bonus calculations for the Excellent Health Outcomes for All Index.
- 2027 Stars results are not expected to affect revenue in fiscal 2026 or 2027; quality bonus payments for fiscal 2028 will be impacted, partly offset by provider risk-sharing arrangements.
- Alignment intends to pursue administrative appeals and commence litigation challenging certain CMS Star Ratings measures and methodologies; ~50% of members joined within the last two years.