Humana Sues to Reverse High-Stakes Cut to Medicare Ratings (1)

Humana Inc. sued US health agencies seeking to reverse a cut to crucial Medicare quality ratings, linked to billions of dollars in revenue, that sent the company’s stock tumbling this month.

The lawsuit argues that the US Medicare program was “arbitrary and capricious” in how it calculated the metrics for Humana’s health plans. The scores, known as star ratings, are linked to billions in bonus payments in future years.

The case was filed Friday in federal court in the Northern District of Texas before Judge Reed O’Connor, who has frequently ruled in favor of plaintiffs challenging government regulations.

Humana’s ...