Case Explained: ALIGNMENT HEALTHCARE INC v. UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES

Court: United States Court of Appeals for the District of Columbia Circuit

Filed: 2026-07-14

The D.C. Circuit affirmed the district court’s grant of summary judgment to the Department of Health and Human Services (CMS), upholding CMS’s decision to deny Alignment Healthcare’s request to disregard survey data used in calculating Medicare Advantage plan star ratings. The court held that CMS did not act arbitrarily or capriciously under the Administrative Procedure Act because Alignment failed to provide evidence that its vendor disregarded its specific requests for Spanish-language surveys or that the Protocols required vendors to send Spanish questionnaires in all instances where language preference data could not be matched. The court applied a deferential standard of review, noting that CMS’s decisions involved complex technical judgments regarding sampling methodology and data analysis within the agency’s expertise. The opinion established that even assuming the Protocols made Alignment’s request for Spanish-only mailings binding, the vendor’s “conservative approach” to data matching—refraining from matching records when names or addresses conflicted between files—was reasonable. Furthermore, the court found that the Protocols did not prohibit vendors from sending English surveys when mismatches occurred, provided they made Spanish surveys available through other means, such as bilingual pre-notification letters and web survey options. The court also rejected Alignment’s arguments regarding inconsistent treatment of similarly situated parties and a violation of the private nondelegation doctrine, concluding that CMS retained ultimate authority over data inclusion in star ratings while vendors performed fact-gathering functions. As a practical consequence, the district court’s judgment stands, meaning the survey results for Alignment Healthcare’s two contracts remain included in its star rating calculations without suppression or adjustment. The ruling confirms that CMS is not required to invalidate survey scores based on alleged vendor administration errors absent clear evidence of non-compliance with Protocols, and it clarifies that private entities administering surveys under CMS oversight do not exercise independent decision-making authority that would trigger nondelegation concerns.

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