Alignment Healthcare Inc.
10/08/2026 | Press release | Distributed by Public on 10/08/2026 15:13
Regulation FD Disclosure (Form 8-K)
Item 7.01 Regulation FD Disclosure.
2027 Health Plan Stars Ratings
On October 8, 2026, the Centers for Medicare & Medicaid Services ("CMS") released its 2027 Star Ratings for Medicare Advantage ("Medicare Part C") and Medicare Part D prescription drug plans. Based on the newly released Star Ratings, Alignment Healthcare, Inc. (the "Company") expects that its California HMO health plan contract (H3815) will have a 3.5-Star Rating for rating year 2027. H3815, which had a 4.0-Star Rating for rating year 2026, serves approximately 75% of the Company's health plan membership. Alignment expects to retain a 4.0-Star or higher rating in each of its six other eligible plans, including three plans that achieved a 4.5-Star Rating.
Based on the Company's review of the data provided by CMS, the decline in Stars performance was driven primarily by higher industry cut points and a decline in certain triple-weighted measures across Health Outcomes Survey (HOS) and Part D.
Separately, CMS's decision to retroactively eliminate bonus calculations related to the Excellent Health Outcomes for All Index (also formerly known as the Health Equity Index) after the performance period concluded reduced the impact of investments that the Company made to align with CMS's objectives under its prior implementation.
The Company has and will continue to implement enterprise-wide initiatives, including to enhance member and provider engagement, expand care gap closure programs and provide additional quality oversight. The Company believes these actions will strengthen our business and position H3815 to return to at least a 4.0-Star rating in future rating years.
The Company intends to pursue available administrative appeals challenging certain CMS calculations and expects to commence litigation challenging certain Star Ratings measures and methodologies that it believes are inconsistent with applicable law and CMS's statutory authority.
The rating year 2027 Stars results are not expected to impact the Company's revenue for fiscal years 2026 or 2027. The change in Star Ratings performance for rating year 2027 will impact the Company's quality bonus payments for fiscal year 2028. The Company expects that its risk sharing arrangements with providers will offset a portion of this impact. Furthermore, the Company is aggressively pursuing all options to mitigate the potential 2028 financial impacts. Lastly, with approximately 50% of Alignment's membership having joined the Company within the last two years, the Company expects the embedded earnings growth within its existing membership to support its margin trajectory over the coming years.
Alignment Healthcare Inc. published this content on October 08, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on October 08, 2026 at 21:13 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]